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Thread: What to do about affordable housing?

  1. #26
    Quote Originally posted by Lee Nellis
    This is controversial and constantly debated. The causes of housing inflation are not the same in every community, and thus the solutions - if any - also vary. IMO, it all goes back to land values, but there are numerous contributing factors. The only way a community can address it is by local analysis., strong leadership at the highest levels, and a willingness to invest. The word "simple" has no place in the discussion.

    I think jaws is oversimplfying. If housing cost is based solely on supply and demand, one would assume that when supply is greater than demand that prices would bottom out. This is not true. Philadelphia has the most abandoned houses of any city in the country (greater than 100,000+ I believe), yet it's very hard to find a house for less than 50k. There are a whole host of other factors at play.

  2. #27
    50k is extremely cheap for a house, but regardless housing prices are not what determines availability of affordable housing, rents are. Housing prices fluctuate with interest rates and credit flows, rents are determined only by occupancy.

  3. #28
    May 2003
    I was looking for something unrelated and came across this article by John Norquist. It is an interesting perspective on affordable housing and federal involvement in this problem.

  4. #29
    Sep 2005
    Teton County, Wyoming
    Quote Originally posted by Dashboard
    The community for which I work is really trying to tackle the homelessness issue. From a planning perspective, the overarching problem is affordable housing. I'm curious as to the different mechanisms, partnerships, programs, etc. that other planners or agencies are implementing to get some tangible improvement in housing affordability. I am very interested in hearing of what has worked...is it being improved via ordinances? Partnerships with non-profits? Your thoughts and comments are appreciated...
    We have tremendous problems with affordable housing in Teton County. Renting is the only option for many, and for a cheap place, rents start at about $1500/ mo. for a 1 or 2 BR place. We have regs that require every new house that gets built to contribute $$ to an affordable housing fund based on the number of bedrooms in their new home. This is trying to tackle the problem of affordable homeownership, which is different than affordable rentals. The money collected is then used to purchase some ridiculously expensive property in the County. Then fairly inexpensive, but pretty nice modulars or condos are constructed. These homes are deed-restricted to remain affordable in perpetuity. Is it working? Yes and no. A co-worker of mine and her husband purchased an "affordable" home last month for $311,000.00!!! Of couse the market value of the home is over $750,000.00. It is difficult to build equity with the deed-restriction because they can only get a return of about 2% a year, that would allow people to release themselves from the grasp of subsidized housing. My husband and I opted to buy an older and smaller condo for $255K less than 2 years ago, and now have over $35K in equity built up. So, it is sort of a double-edge sword when you get into affordable housing. How do you ever get out? But it is certainly a better option than renting forever.

  5. #30
    Cyburbian JNL's avatar
    Jul 2002
    Wellington, NZ
    Our council owns and rents out a few hundred units at 75% of market rental. By most of our standards, they are small and very basic, but they are always full and there are waiting lists. They tend to be clustered together in blocks of units. They are scattered throughout the city - some right in the centre and some further out in the 'burbs. They come with a lot of problems for the council but it is felt that they fill an important gap in the housing market, and if they were sold then the increase in rental to market value would push many tenants out with nowhere to go.

    Our council put some money into an 'experiment' recently, where they tried reaching some of the long-term homeless in our city and help them get into council housing units. We are only talking about a handful of people, maybe 10 max? While this seemed to have some initial success, there have been problems with the behaviour of these new tenants, scaring the others. One of the new tenants set fire to his unit We are also having problems with gang members congregating at some of the units and selling drugs from there.

  6. #31
    Quote Originally posted by JNL
    They come with a lot of problems for the council but it is felt that they fill an important gap in the housing market, and if they were sold then the increase in rental to market value would push many tenants out with nowhere to go.
    This illustrates well an important point I want to make. These units are not creating any affordable housing. They simply forbid people of average wealth from renting there. Instead of the poor being forced out with nowhere to go, the slightly-better-than-poor are forced out with nowhere to go. And for those poor stuck on the waiting list, tough luck. Where are they living while they wait to be allowed an affordable home?

    You never achieve anything good by trying to cheat the market. At best you're hiding away the problem while pretending that something is being done about it, and at worse creating an extremely unfair situation where some people get privileges while others don't due to completely arbitrary reasons.

  7. #32
    What should be done about providing affordable housing to the Guatamelan and Salvadoran (Salvatruchan) families living in the Koreatown neighborhood of Los Angeles?

    Any thoughts?

  8. #33
    Super Moderator luckless pedestrian's avatar
    Aug 2005
    in a meeting

    okay, gloves off

    taking off zoning restrictions will not create affordable housing - i am so sick of hearing people whine about how permitting costs drive up the price of lots and government requriements encourage housing to be unattainable

    all relaxing zoning will do is allow for more expensive homes to be built on smaller lots - for my massachusetts colleagues in here, see Newton, Belmont, and, yeah Somerville, remember when it was cheap to buy there, yeah, me too, wish i had in the 80's - but no more can you get anything in somerville, even though the population density is one of the highest in the country, right behind brooklyn - so it may not be as simple as supply, that's the homebuilder's lobby talking...

    the role of government is limited really to either zoning aloowances or developing it ourselves - we have proven to not be too good at development from our past experience but partnerships are a good idea, partnering with private sector

    but okay, relaxing zoning is a good idea, BUT, repeat after me, only IF you require the affordability by deed and you monitor it (re-sales, re-fi's, everything)

    or you just make it mandatory - we are thinking about making it mandatory for a certain percentage of lots/units to be affordable for the 120-180% of the median income range (a new population of people that can't get housing), another percentage to be affordable for 80 to 120% of the median income (or, better, a density bonus and not mandatory), and a real good density bonus for 50-80% of median income

    but the original thread is homelessness and not necessarily affordable housing - not sure what to do there - we have a seasonal worker housing problem here - they are stacked like wood in private houses - it's a big problem -

  9. #34

    Oct 2001
    Solano County, California
    I agree partly with luckless pedestrian. Zoning alone is not responsible entirely for the lack of affordable housing.

    There are several complicated reasons.

    First, with over 300 million people concentrated near a relatively few growing metropolitan centers, the cheap land within a short distance of urban employment centers is not as readily available. This bids up land prices in the metroplitan areas with "affordable housing" issues. Is there an affordable housing problem in Utica, New York, Wilkes-Barre, PA, or many small Great Plains towns? Of course not. Conversely, look at the growing San Francisco area-a narrow penninsula which is largely built out, geographically challenging for development, or perserved as public park land, how can the land be anything but expensive.

    Second, the inevitable NIMBYism. At the same time, can you blame them? More people means more cars, more traffic, more pollution. Our lifestyle imposes significant costs on existing communities, which react through often short-sighted but understandable reasons.

    Third, the market supports more expensive housing. Why build "affordable" housing with shoestring profits when you can build upscale

    Fourth, the increasing bifurcation of the American economy. With the decline of manufacturing, unrestricted immigration by unskilled (or even skilled) population, the effective stagnation in real wages since the 1970s, some argue that the increased divide of the class system means there are simply more people that cannot compete in the market system for housing.

    Fifth: who will pay for the public services and infrastructure for "affordable" housing? Somebody has to pay for the ever more expensive freeways, the schools that must meet ever higher state and federal standards. Increasingly, general property taxes don't pay for these growth-enabling services, impact fees on new house construction does.

    Sixth, government-sponsored affordable housing is expensive and a drop in the bucket. Prevailing wage laws, high middle-class quality standards, NIMBYism, all mean our "affordable" units cost $100,000 per.

    I might argue that if the United States wants to have the third world economy that we are moving toward, we should simply declare swathes of land, prefferably near the elite suburbs that benefit the most from cheap labor, free fire zones and allow the kind of Latin American favellas that you see around every South American city.

  10. #35
    I'm seeing another misconception about the nature of affordable housing, which is that it is a separate class of building from regular housing. That isn't true. What is the difference between a luxury condominium and an affordable apartment? Location, nothing more. The number of necessary rooms doesn't change, the construction costs don't change. Of course builders want to attract the wealthiest segment of the market, but that doesn't mean they aren't creating affordable housing in the process. People who move into the new housing are moving out of more depreciated housing. That more depreciated housing becomes affordable housing.

    If you want to force builders to lower their prices below the market rate, you are making them create housing that is already depreciated, inferior housing. And since the profitability of this housing is lower than what they normally would earn, they have to restrict the amount of market-rate housing they build so as to sell it for a higher price. The market-rate housing has to be priced higher to subsidize the depreciated housing. Since fewer wealthy people move out of older housing, less affordable housing is added to the market.

    With this market restriction you are creating less affordable housing, not more.

  11. #36
    Sep 2005
    New England
    Well of course I am looking for simple answers to the problem of affordable housing. In my neighborhood many people seem to believe that young professionals are causing rent to soar by moving here. I have to wonder, of course, whether rents rise first and young professionals are moving here because they are the ones who can afford it while poorer people are priced out. And it might be the case that the young professionals are moving here after they too are priced out of their preferred locations.

    Where should I begin in order to get informed about these things? That's my wide open question.

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