The affordable housing paradox and the missing middle

[Dan]

I totally agree with Linda: housing is less affordable today because contemporary new construction for even the poorest of the poor is gold-plated by pre-1970s standards. Even the most bare-bones public housing or lower income garden apartment complex in your run-of-the-mill sunbelt city has things like AC, dishwashers, multiple bathrooms and bedrooms (fewer kids have to share rooms), multiple electric outlets per room (contrarily, the decrepit 1840s house I grew up in had mostly one outlet per room), etc. Even the average mobile home is more lavish than the shotgun shack of yore.

Which leads me into a paradox faced with housing in my region: subsidized affordable housing built for qualified low/mod income buyers is much nicer than market rate housing that is affordable by median income buyers.

An example:

• New affordable townhouse (modest income, first time homebuyer), about 2-3 miles from downtown: 3 bedrooms, 1.5 baths, 1,465 square feet, $117,900
• Similar price, market rate: 27 year old condo with no updates, about 2-3 miles from downtown: 2 bedrooms, 1 bath, 960 square feet, $121,000, and a deed restriction that prevents rental.
• Similar floor area, market rate: 110 year old house with bad 1960s updates throughout, about 2 miles from downtown: 3 bedrooms, 1 bath, 1444 square feet, $159,000.

Missing middle housing is a major issue here. If you're low income, you can get a nice house. If you're well off, you can get a nice house. If you're middle class, it's something small, something that needs a lot of work, or drive to qualify, with the resulting rural sprawl.

[stroskey]

My feeling is opposite of what a lot of I assume our profession thinks, but housing programs are designed wrong in that they allow people without much credit capacity or financial security to get into a house but those with a more stable lot in life have much more trouble affording the same houses. Need-based and asset-based programs are off the mark and if we as a government support building projects we shouldn't automatically disqualify people because they have too much credit or too many assets.

[nrschmid]

Interesting thread. The US federal government has never played a heavy hand in publicly-funded housing at various income levels. For example, the term "public housing" or even "affordable housing" is usually interpreted as housing for low-income families. However, in the United Kingdom, council estates/council housing was originally designed for even middle-class families. Then again, many parts of England alone, especially London, were heavily bombed during WW2. Publicly-funded housing was built for many different income types as there was a drastic housing shortage after WW2. The US had a shortage of single-family housing after WW2, but I never understood why there was such a need for many middle-income families to desire a single-family house? Was it because we had far more land to play with?

[Blide]

While I agree with your sentiment, I just don't think there's enough affordable housing out there for this to considered a real problem yet. There's just so few units available that it seems more like winning the lottery if you manage to snag one. Although I somewhat question the need for affordable housing when there's plenty of reasonably priced places in the area. It's not like we're talking public housing here which is largely need-based rentals and serve a necessary purpose in the community.

[DetroitPlanner]

http://www.realtor.com/realestateand...1_M37984-57338


'nuff said.... its a wonder what losing 400,000 well paying manufacturing jobs does to the cost of homes!

[mendelman]

Actually, I like to amend the "there's no affordable housing" statements to "there's no affordable housing where people want to live".

Metros - Detroit, Chicago, Philadelphia, etc, etc....There are plenty of vacant, empty houses/units, but they are in the places many homebuyers doesn't want to live. But perhaps my amended statement is simply implied in the original.

[Dan]

The US had a shortage of single-family housing after WW2, but I never understood why there was such a need for many middle-income families to desire a single-family house? Was it because we had far more land to play with?

Somewhat off-topic: speculative subdivision throughout the boom years of the 1920s created a massive surplus of vacant building lots on the outer edges and throughout the nascent suburbs of many American cities. What we think of as suburbia in the United States -- lower density, vehicle dependent and middle class -- was not an invention of the 1950s, but something that emerged after World War I.



The Great Depression and World War II only interrupted suburbanization, and their effects -- deterioration of inner city housing, housing shortages and crowding, the Great Northern Migration, and high savings rates -- only served to accelerate suburbanization when the nation's economy returned to something resembling normalcy in the late 1940s.

[Dan]

Actually, I like to amend the "there's no affordable housing" statements to "there's no affordable housing where people want to live".

The issue here isn't that there's no affordable housing where people want to live. There is quality affordable housing ... if you're low/mod income, or upper middle class and wealthier If you're middle class,and you want to live "where people want to live", what housing you might be able to afford is worse than the subsidized housing built for and limited to lower income households.

[wahday]

Actually, I like to amend the "there's no affordable housing" statements to "there's no affordable housing where people want to live".

Metros - Detroit, Chicago, Philadelphia, etc, etc....There are plenty of vacant, empty houses/units, but they are in the places many homebuyers doesn't want to live. But perhaps my amended statement is simply implied in the original.

I would only partially agree with this sentiment. Take a look at this great site (Affordable Housing Design Advisor) that lists profiles on high quality affordable housing projects nationwide. They include total construction costs and funding sources for exceptional affordable housing examples across the country and even have a special section for "green" projects.

Go to the "gallery" tab and then scroll down to see a list of places shown. They include many high-cost and desirable cities including Austin, Seattle, San Francisco, NYC, Santa Monica, New Haven, etc. A great resource for people in the affordable housing arena and some really amazing examples of very well done projects.

But your point is well taken in that publicly-funded workforce or affordable housing projects are often used as catalyst projects to try and rejuvenate rundown parts of a city. On the one hand, this approach can feel like "well, let's just see how it goes - first we'll house poor people there and if it takes off, more development will come in." On the other hand, this kind of housing can provide quality housing for people already living in hard hit areas (and who may be renting from a slumlord in a substandard home), effectively improving the quality of life for folks who already struggle with living in neglected parts of urban areas. If done well, this seems like a better alternative to gentrification which often displaces the lower income sector and moves them to another location rather than improving their lot.

[Linda_D]

Somewhat off-topic: speculative subdivision throughout the boom years of the 1920s created a massive surplus of vacant building lots on the outer edges and throughout the nascent suburbs of many American cities. What we think of as suburbia in the United States -- lower density, vehicle dependent and middle class -- was not an invention of the 1950s, but something that emerged after World War I.



The Great Depression and World War II only interrupted suburbanization, and their effects -- deterioration of inner city housing, housing shortages and crowding, the Great Northern Migration, and high savings rates -- only served to accelerate suburbanization when the nation's economy returned to something resembling normalcy in the late 1940s.

You can also argue that suburbanization goes back even further. In fact, Delores Hayden does that in Building Suburbia. In the mid-19th century, cities expanded their limits so far that it took decades to fill up the space. Buffalo, NY is a case in point. In 1854, the city expanded to take in the village of Black Rock along the Niagara River as well as land to the north, east, and south that make up the present city, but was nothing but cow pastures and farm fields at the time. Much of it remained that way until after 1900. (See 1894 Buffalo City Atlas.

The area north of the Pan American Exhibition grounds was finally developed in the early 20th century, from the 1910s to 1930. It was Buffalo's "suburbia" then. My immigrant grandparents escaped the crowded conditions in Polonia (the Polish part of Buffalo's East Side) to move to newer, nicer housing in the Grant-Amherst area.

That wasn't a pattern unique to Buffalo, either. The neighborhood I live in here in Jamestown is near the city line and is a mixture of 1920s and post-WW II homes. Further south, most of the homes are vintage 1960. In the southeast corner of Jamestown, there's suburban style developments from the 1960s and 1970s. There are numerous suburban-like neighborhoods within the city limits of Albany, Troy, and Schnectady, too. In fact, when I lived in the Albany area in the 1990s, there was still significant land available for development in both Troy and Rensselaer, and builders were putting up houses on that land.

Too many people assume that because the widespread development of towns outside the city limits didn't occur until after WW II that suburbanization started then. The fact is that was about when many cities, especially in the Northeast and Midwest finally filled up the land within their city limits (and they were prohibited by law from annexing neighboring areas). What too many people today don't realize is that people's needs and wants changed over time. Moving from a crowded tenement or from a tiny little shotgun shack housing two or three families to a newer home with a basement and spacious apartments on each floor and a yard big enough for a garage and a little garden was the 1920s version of the 1950s single family cape on its quarter acre lot or the 1970s rancher with its bath and a half, attached garage, and half acre estate. The beautiful Victorians and Tudors that dot city neighborhoods today were their eras' versions of the 2000's exurban McMansions.

We're Americans, the descendents of people who mostly came here to get land of their own, even if they actually never did accomplish it. Owning the land we live on (even if it's only an apartment) will probably remain important to most Americans for the foreseeable future, even if it's only a dream. It's just something that's ingrained in us in a way that doesn't happen in most places in the world. Maybe it's in the water.

[Cardinal]

I will be generous and refer to the "debates" I had with some housing advocates in Boulder, Colorado. I argued that there was an affordable housing problem, a statement that infuriated them. They had numerous programs to require affordable housing in new developments and to fund affordability programs. Yes, you could buy a new 400 square foot condo for $160,000, with another $20,000 for a parking space. Yes, if you were low income you could get subsidized rent for a small apartment. But what if you wanted a house? What if you were not single, and maybe even had a family? At the time the least affordable home on the market was a run-down former student rental on a six-lane road, selling for $300,000. More typical was the 1500 square foot home built from the 1950's to 1970's, selling for between $500,000 and $750,000. You might earn $100,000 a year, but still not be able to afford even a small decent house in a decent location. So as Dan observed, there was housing for the poor and housing for the rich, but not for the middle. This could be observed in the city's declining school enrollment and aging population, among other problems.

[stroskey]

What we think of as suburbia in the United States -- lower density, vehicle dependent and middle class -- was not an invention of the 1950s, but something that emerged after World War I.

These are completely different built environments though. 1920's had single family houses but also multistory apts on the same block or at the corners, oftentimes alleys so the cars were hidden from the public realm, and mixed uses at many intersections. Post WWII growth patterns had everything split up and even commercial uses well defined away form each other and on separate lots.

1880's neighborhood in Saint Paul, MN
vs.
1920's suburbs in Saint Paul MN
vs.
1960s suburbs in Saint Paul, MN
vs.
2000s suburbs in Saint Paul, MN
Each of these is 40 years apart and clearly the model didn't change much from the 60's to now.

I'll take the 1920's model any day. If we want to build affordable housing (not the low-income kind) putting it in an area where people can walk if they want to and it is practical makes so much more sense than building 3 story apts on the fringes of town, which is what we see where I live.

[Blide]

I will be generous and refer to the "debates" I had with some housing advocates in Boulder, Colorado. I argued that there was an affordable housing problem, a statement that infuriated them. They had numerous programs to require affordable housing in new developments and to fund affordability programs.

Boulder is kind of in its own little world. I'm not even sure how someone could say Boulder has sufficient affordable housing when people literally have to commute in from Superior, Louisville, and Longmont to work there. It's hardly surprising they have issues either since they instituted that urban growth boundary that severely limited new development.

[Cardinal]

Boulder is kind of in its own little world. I'm not even sure how someone could say Boulder has sufficient affordable housing when people literally have to commute in from Superior, Louisville, and Longmont to work there. It's hardly surprising they have issues either since they instituted that urban growth boundary that severely limited new development.

Not long after returning to Wisconsin I was asked to take part in a panel on growth controls, put on for elected officials in the Milwaukee area. I gave an honest account of Boulder - the good, the bad, and the extremely wacky. I have never had an audience laugh so much during a presentation.

[mendelman]

The issue here isn't that there's no affordable housing where people want to live. There is quality affordable housing ... if you're low/mod income, or upper middle class and wealthier If you're middle class,and you want to live "where people want to live", what housing you might be able to afford is worse than the subsidized housing built for and limited to lower income households.

And you know full well why this is. The new construction is subsidized and has specific requirements for design/layout in order to get those subsidies (LIHTC, etc)

I would only partially agree with this sentiment. Take a look at this great site (Affordable Housing Design Advisor) that lists profiles on high quality affordable housing projects nationwide. They include total construction costs and funding sources for exceptional affordable housing examples across the country and even have a special section for "green" projects.

Go to the "gallery" tab and then scroll down to see a list of places shown. They include many high-cost and desirable cities including Austin, Seattle, San Francisco, NYC, Santa Monica, New Haven, etc. A great resource for people in the affordable housing arena and some really amazing examples of very well done projects.

But your point is well taken in that publicly-funded workforce or affordable housing projects are often used as catalyst projects to try and rejuvenate rundown parts of a city. On the one hand, this approach can feel like "well, let's just see how it goes - first we'll house poor people there and if it takes off, more development will come in." On the other hand, this kind of housing can provide quality housing for people already living in hard hit areas (and who may be renting from a slumlord in a substandard home), effectively improving the quality of life for folks who already struggle with living in neglected parts of urban areas. If done well, this seems like a better alternative to gentrification which often displaces the lower income sector and moves them to another location rather than improving their lot.

I'm not really talking about "Affordable Housing". I'm talking about "affordable housing", in the manner that Dan is talking about. But really, Dan is in a unique locality, economically and demographically, much like Cardinal's description of Boulder and my experience in Ann Arbor, MI and what I expect in Berkley, CA.

[kjel]

Which leads me into a paradox faced with housing in my region: subsidized affordable housing built for qualified low/mod income buyers is much nicer than market rate housing that is affordable by median income buyers.

An example:

• New affordable townhouse (modest income, first time homebuyer), about 2-3 miles from downtown: 3 bedrooms, 1.5 baths, 1,465 square feet, $117,900
• Similar price, market rate: 27 year old condo with no updates, about 2-3 miles from downtown: 2 bedrooms, 1 bath, 960 square feet, $121,000, and a deed restriction that prevents rental.
• Similar floor area, market rate: 110 year old house with bad 1960s updates throughout, about 2 miles from downtown: 3 bedrooms, 1 bath, 1444 square feet, $159,000.

Missing middle housing is a major issue here. If you're low income, you can get a nice house. If you're well off, you can get a nice house. If you're middle class, it's something small, something that needs a lot of work, or drive to qualify, with the resulting rural sprawl.

I think there is a large misconception about what exactly "middle" income is. "Middle" income here is upward of $65K for a family of four.

I build "affordable" deed restricted housing in Newark, NJ. Our target AMI is 50-80% which equates to $45K to $65K for a family of four. I build and sell two-family homes (one owner occupied unit with an attached rental unit) with a sales price of $190K to $220K. The market rate for similarly styled and constructed homes is around the same, older and in less pristine condition sell for less and without deed restrictions. The good thing is that my homes are brand new and very well constructed. We typically sell to people who have lived in the community for a long time or have residency requirements from their employer (city, school district, police/fire). Nobody is moving here and with a homeownership rate that has been stagnant at 20% for 30 years very few people are buying either. Anybody that afford that price point is moving out to the inner ring suburbs which are a bit of a step up.

My family's income is squarely within that range and I really would not mind purchasing one of the homes....except for where they are located. With a small child that will be in the school system in a few years I cannot justify paying a property tax bill of $6K just to pay tuition at a private school due to a horrible public school system. So we continue to rent.