Subsidising public housing in a new way

[Per Wilhelmsson]

I'm a planning student living in Stockholm, Sweden, a 2-million city with a serious housing shortage. Stockholm has a long tradition of low-rent, high-standard housing, but this ended somewehere in the eighties and all that gets built nowadays are single-family homes on the outskirts, increasing the strain on the already congested motorways, and in the center, super-expensive luxury apartments of a type I guess you Americans would call "condos", ie an apartment that you buy instead of rent. There is a queue for public housing, but there is something like 80 000 people in it, and instead of building loads of new apartments, the city has placed a fee on the queue in order to decrease it.

Now my question is this: A friend of mine who currently lives in NYC said to me that each time a block of condos is built there, even in Manhattan, the builder has to submit 20% of the apartments to the public housing queue and charge a low rent for them. Is this true? To me it sounds like an interesting model. Maybe the authorities could reward the builder by increasing the FAR. It also seems like an interesting way to tackle the growing segregation problem.

 

[David Danenfelzer]

There are lots of strategies that work for the U.S., but I don't know enough about Sweden to give you any direct advice. I can give you a couple examples of what has worked here.

First, I don't know of the NYC program, but there are cities that require builders to either set aside units or pay a housing fee to increase affordable housing. Another program that has just begun here in Austin, TX is a fee rebate to develoeprs who include affordable units in new developments. Permit fees are very high here and saving $10,000 to $20,000 for a medium sized development is a good incentive to provied new affordable units.

Another example that I would like to see more of is for tax delinquant properties to be closed and then resold to affordable housing programs. We are working this type of program, but I think that other cities in the U.S. may have something similar including Houston, TX.

Well, good luck in your research, I for one woul like to know more in the future.