All posts by Ted Wimpey

Real estate ad pitfalls

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Monday’s civil rights hearing covered a lot of ground on housing discrimination, but it never got around to advertising. Maybe that’s because illegal ads aren’t as pervasive as they used to be. Signs like this hard seldom seen nowadays:

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The newspaper staffers who oversee classified ads are generally savvy – they’ve been brow-beaten by fair housing activists enough over the years to have a pretty good idea what passes muster and what doesn’t. Then again, how much real estate advertising are newspapers getting these days, anyway? Not as much as they used to, sadly.

The most popular advertising venue that lacks editorial oversight, of course, is Craigslist. And that’s what the Fair Housing Project devotes most of its monitoring time to, in its capacity of advertising watchdog.

Craigslist, to its credit, puts a little blurb in each of the entries, “please flag discriminatory housing ads” with a link to a summary of what’s prohibited under the federal Fair Housing Act. Vermont’s Craigslist does not provide any info about Vermont-specific discrimination, however. “Receipt of public assistance” is a protected class in Vermont, which means ads can’t say “No Section 8.”

Very few do, though, even on unfiltered Craigslist. Over the last five months, browsing Vermont rental ads on Craigslist several times a week, we’ve found 30 ads with one or two violations (or probable violations – we’re not an enforcing agency, after all).

About two-thirds of the violations have pertained to familial status – a federally protected category. That means presence of kids. That is, the ads appear to discriminate against families with children.

Much of the discriminatory language might be characterized as subtle. Just about everybody, even the proverbial small-time landlord, knows better than to say “no children.” Instead, they say things like, “best for singles or couples” or “single occupant” or “college students only.”

Roughly one-third of the violations pertain to receipt of public assistance. Here again, the language is less than direct. “Professionals only” … other units “occupied by executives, business owners” … “located in a quiet, professional neighborhood.”

The great majority of real estate ads on Craigslist are fine, at least in fair housing terms. Most advertisers, intentionally or not, abide by this useful guideline for what to put in the ad: Describe the property, not who you want to live there.

Nuggets from Vermont’s civil rights hearing

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Monday’s half-day hearing on “housing issues” held in the Statehouse by the Vermont Advisory Committee to the U.S. Commission on Civil Rights broke little new ground on the fair housing front. A few points worth highlighting:

  • Housing discrimination by race and national origin is still very much with us, as evidenced by Vermont Legal Aid’s 2014 testing. (White American renters received preferential treatment in 46 percent of the national origin tests and 36 percent of the race-based tests, for example.) The new Vermont NAACP chapter reported having received about 50 housing discrimination complaints since September; how many of those complaints were referred to investigators at the Human Rights Commission or Vermont Legal Aid was unclear, however. Parts of Burlington and Winooski, in part because of an influx of refugees, are becoming residentially segregated.
  • Race-based discrimination, often disguised with “a smile and a handshake,” tends to be more subtle than disability-based discrimination. The latter category regularly draws the most complaints to the commission and Vermont Legal Aid. Affordable housing accessible to people with disabilities is in chronically short supply.
  • Vermont’s low vacancy rate can exacerbate discrimination, as landlords have more latitude to be “choosey.”
  • Small-time landlords, who own one or just a few rentals, are more likely than their large-scale, professional counterparts to be ignorant of fair housing law; and the great majority of the state’s roughly 7,000 landlords are not members of the landlords’ association. One remedy is more education and outreach, to landlords and tenants.
  • One proposal that might ensure better fair-housing-law compliance, not to mention code enforcement: a state rental registry, coupled with mandatory fair-housing training for landlords.

 

Today’s Statehouse presentation

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Here’s the statement Ted Wimpey provided today to the Vermont Advisory Committee to the U.S. Commission on Civil Rights at a hearing in Montpelier on “Housing Issues”:

 

For nearly two decades, the Fair Housing Project of the Champlain Valley Office of Economic Opportunity has worked on a variety projects aimed at eliminating or mitigating various aspects of illegal housing discrimination in Vermont. We have been involved, with Vermont Legal Aid as partners, in business practices fair housing audit testing, we have organized programs to educate housing consumers about their fair housing rights; conducted fair-housing trainings for landlords, realtors, municipal and state officials and the general public; received vetted and referred complaints regarding perceived fair housing violations; monitored real estate ads for fair housing violations; and published and distributed fair housing guidebooks in English and more than a dozen other languages.

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While continuing to perform many of these functions, the Fair Housing Project has been focusing increasingly on addressing systemic barriers to fair housing choice which can take forms such as excessively restrictive or exclusionary planning, zoning or development policies. With funding from the US Department of HUD, we have in collaboration with a number of organizational partners, mounted a statewide campaign to promote inclusive and affordable development patterns – a campaign called “Thriving Communities: Building a Vibrant, Inclusive Vermont.” This campaign dovetails with a reinvigorated commitment by HUD to better “affirmatively further fair housing” (AFFH), such “affirmatively furthering…” is a mandate of the Federal Fair Housing Act of 1968 that for action purposes has been ill-defined and erratically observed. Just this summer HUD issued a much-anticipated AFFH rule that brings more clarity at least to the process of evaluating whether entities are effectively attempting to conduct programs and policies aimed at AFFH. We will not now dwell on details of the HUD AFFH rule, which has received a fair amount of popular attention and which essentially sets forth a new planning process for federal funding grantees. Suffice it to say here that the thrust of this initiative is to break down historic concentrations of poverty, and racial and ethnic segregation while proactively encouraging integrated development patterns that includes affordable housing in mixed income, higher-opportunity communities.

Residential racial segregation in U.S., while somewhat diminished – at least in some cities- since passage of the Federal Fair Housing Act 47 years ago, remains pervasive, and income segregation has become even more pronounced. Vermont is about 95 percent white, however, and while pockets of minority concentration exist (77 were identified in the state’s last Analysis of Impediments to Fair Housing Choice (AI) – 2012”). Vermont had no census tracts in 2010 where blacks exceeded 7 percent of the population. (Other minorities registered well below 5 percent in most tracts.)

So, while residential segregation by race does bear watching in Vermont – particularly with a significantly increasing number of refugees, immigrants of color, and African Americans typically from more urban areas of the country – it does not exist on the same scale as in many major metropolitan areas. Based on Dissimilarity Index Rankings, the 2012 analysis concluded that Vermont is “moderately segregated for Asians and Blacks and has low degrees of segregation for other minority groups.” It’s also worth noting that minorities in Vermont have lower median incomes and lower rates of home ownership, and that, based on testing results from Vermont Legal Aid’s studies, minorities face higher incidences of housing discrimination than the state’s formal complaint statistics might suggest.

In our Thriving Communities campaign, we’re advocating for broad-based residential inclusiveness – not just for ethnic minorities, but for all protected classes, which in Vermont include people receiving public assistance and which prohibits planning, zoning and permitting processes and decisions that are based on the income level of prospective residents.

In terms of policy and state law, Vermont has taken some positive steps against socioeconomic segregation. (Because of a disparate impact on a number of protected classes under federal and state fair housing law, socioeconomic exclusion effectively equals fair housing law violation especially as regards AFFH obligations.) “Receipt of public assistance” is a protected class under the state’s fair housing law. And Vermont’s law as of 2012 also makes it illegal to discriminate on the basis of income in permitting housing or in making land-use decisions. Also under Vermont’s laws defining parameters for municipal planning and zoning, municipal plans must include “a recommended program for addressing low and moderate income persons’ housing needs.” Moreover, bylaws may not exclude housing that meets the needs of low or moderate income people, and multi-family housing or mobile home parks in particular.

But while the state potentially wields at least a small legal stick, for prohibiting income-exclusiveness, many local jurisdictions have a long way to go in providing carrots for more affordable-housing development and, in collaboration with fair and affordable housing advocates and developers, the state and its fair and affordable housing partners needs to keep educating, encouraging and, if necessary cajoling municipalities into more inclusive housing development policies.

Inclusionary zoning, for example, is becoming an increasingly used tool across the country to add to the affordable housing stock in mixed-income neighborhoods – but it is not yet at all common in Vermont. Inclusionary zoning requires or encourages a certain percentage of affordable units in new housing developments. As far as we know, only Burlington and a small hand full of other towns to lesser degrees, have adopted inclusionary zoning bylaws. We’d like to encourage other Vermont municipalities to give this approach serious consideration.

Other signs of municipal commitment to affordable housing development – density bonuses, or waivers/reductions of impact or permitting fees – are also rare exceptions in Vermont. Several years ago, in reviews of land-use regulations in Chittenden and Lamoille counties, the Fair Housing Project found that many towns still had predominantly large minimum lot sizes and that multifamily housing in many cases was a conditional, rather than a permitted use.

What we’d like to see is more Vermont municipalities’ taking steps to encourage multifamily housing developments near town centers, on sites with ready access to good services, schools and transit. In far too many Vermont towns, as is the case across much of the country, lower-wage workers cannot afford to live near their places of employment. Indeed, a recent review of Vermont’s larger employment centers shows that some are woefully short of subsidized housing.

Granted, the limited availability of public funding and tax credits is a constraint on affordable-housing development.   Municipalities nevertheless would do well to prepare the ground for development opportunities as they arise. Vermont’s population deserves no less. More than half Vermont’s renters pay more than 30 percent of their income on housing, and more than one-quarter pays more than 50 percent. Employers feel this burden in another way, when housing costs impede recruitment of workers.

An inclusive community, home to people of a wide range of incomes, backgrounds and skills, embraces fair housing opportunity. We believe this ideal is in keeping with Vermont’s communal character as embodied in its town meeting tradition. Thank you again to the Vermont Advisory Committee for the opportunity to address you on our hopes, fears and concerns regarding fair housing in Vermont.

Ferguson and beyond

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The Times had a story over the weekend on housing segregation in St. Louis region, including Ferguson. Focus was on African American holders of Section 8 vouchers who found themselves limited in where they could move. St. Louis County, it seems, does not have protection for them.

We note here that programs that have sent minority voucher holders to low-poverty areas, in suburban Chicago and Baltimore, for example, have brought benefits in education and employment. We also note that in Vermont, receipt of public assistance is a protected class, so refusing to rent to a Section 8 voucher holder is illegal.

 

 

 

A modest proposal: EB-5 affordable housing

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As public funding for affordable housing dwindles, perhaps it’s worth looking for major financial support elsewhere, as in … East Asia!

Desperate times may call for desperate measures, but has it really come to this, trolling for investors in China willing to underwrite an underfunded public need in the United States?

We’ll leave it to others to judge how desperate Miami is for affordable housing. A headline in yesterday’s Wall Street Journal read:

“Miami Taps EB-5 Visa Program to Help Fund Affordable Housing.”

Hmm, we immediately thought, why not in Vermont? (If you need to brush up on Vermont’s own EB-5 program, which aims to draw economic-development backing from deep-pocketed foreign investors in exchange for green cards, click here, or check out Seven Days’ intriguing update on Bill Stenger’s  various projects in the Kingdom.)

The Journal story noted that Miami has lost affordable housing to upscale development since 2000 and paraphrased a local official as saying that

“it has been difficult for developers of moderate-income housing to compete with luxury developers for land and for financing. At the same time, federal funding for affordable housing has been reduced. In addition to conventional sources of funding a project, using EB-5 funds, which carry considerably lower interest rates than conventional bank loans, might help level the playing field.”

Well! It so happens that Vermont’s EB-5 regional center is headquartered in the Agency of Commerce and Economic Development, which happens also to be home to the Department of Community and Economic Development. DHCD’s advocacy of “strong communities” extends to affordable housing. Why don’t these two bureaucratic wings consider combining forces, or at least, put in a call to Miami?

As things stand, affordable housing isn’t in Vermont’s EB-5 mix. You can see all the projects if you click here.  Mount Snow is on board for construction of a pond and a ski lodge, and is inviting interest in “future projects” that could include hundreds of luxury units … with no mention of affordability, at least in the promotional blurb on the website.

Well, there’s plenty of room for affordable housing at Vermont’s ski areas, as we’ve pointed out in a previous post.  Surely there must be plenty of socially responsible investors in China hankering for U.S. residency who are willing to put up the capital, right?

Maybe the photo with the Journal article, of the Miami EB-5 program’s first project, will whet a few appetites:

miamitower

Oops, that first project isn’t affordable.

A notable anniversary

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Fifty years ago today, President Johnson signed the Voting Rights Act.

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This was the second major piece of civil rights legislation of his presidency. The third, of course, is known as the Fair Housing Act of 1968.

Click here for a video of LBJ’s stirring remarks on the day of the signing, delivered apparently in the Capitol rotunda.  Faces in the crowd include Dr. Martin Luther King Jr.

Brief respite from drought/wildfire news

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An interesting story in the UC-Berkeley student newspaper touches on several themes of interest. Yes, it’s alien territory – high-rent California, urban beyond our rustic imagination (Alameda County alone, home to Berkeley and Oakland, has 2 ½ times the population of the entire state of Vermont).

Still, there’s resonant material here:

  • A university food-service worker who can’t afford to live in the town where she works, Berkeley, and who thus must endure a long commute. She pays a mere $1,400 for a 2BR apartment in Richmond (hey, at $700 a bedroom, that’s about the going rate in Burlington!). Berkeley’s 2BR apartments average about $2,100.   Here’s a shot of a Berkeley “castle.” Not so exotic, really — we can picture a building like this in St. Johnsbury or Rutland.

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Chances are, a UC food-service worker makes a good deal more than a UVM food service worker. After all, the University of California recently raised its minimum wage to $15, more than Sodexo pays its line workers in Burlington, and the main beneficiaries were reported to be student employees, apparently because the regulars were already getting at least that much.

So, yes, the numbers are all inflated compared to our world, but the cast of characters is similar: workers who can’t find affordable housing near where they’re employed or where their kids go to school.

  • Berkeley has had some form of inclusionary zoning for nearly 20 years, but it hasn’t done the trick. In fact, the affordable housing shortage has increased. This doesn’t mean inclusionary zoning is worthless. It’s an important policy tool, but it’s not salvation and in many cases produces only a small fraction of the affordable units needed. (Burlington’s total is less than 250 units over 25 years, fewer than 100 of which were rentals).

Here’s another, not-so-picturesque perspective of pricey Berkeley:

berkeley2

  • Simply building more housing isn’t going to solve the affordability problem. So says a housing activist quoted in the stories. Yes, he’s talking about the Bay area, which apparently is pretty well-built out within its topographic limitations. Building new housing there typically means tearing down an existing building and replacing it with something taller and more costly.

We hesitate to draw the same conclusion about Burlington, which likewise is pretty well built out, but which still has plenty of room for in-fill and accessory units. Here, a surfeit of additional rental units might indeed alleviate the upward pressure on rents, but not enough, we suspect, for low-wage workers at our state university.

 

The 30 percent itch

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What’s up with 30 percent? Why is 30 percent the standard benchmark for the share of income that an average household can afford to spend on housing? That figure has been around for decades. Where did the number come from, and is it still appropriate?

thirty

An article in Fortune raises these questions and implies that, well, maybe the threshold should be higher in the 21st century. After all, the 30 percent benchmark dates from the Depression and the long-ago debut of public housing.

Well, it’s always worth questioning shibboleths. The hazard in this case is that raising the benchmark would fall hardest on the people who are already the most squeezed and potentially provide an excuse for cutting their public benefits even further.

Back in 1937, 30 percent was set as the share of income that public housing residents were expected to spend for rent. Today, that’s the share that Section 8 recipients are expected to spend. It’s the share of income that a renter spends for an apartment that’s deemed “affordable.” Apartments that cost more are “unaffordable,” and renters living in unaffordable apartments — that is, people who pay more than 30 percent of income on rent and utilities — are considered “cost burdened.” (In Vermont, that’s 52.5 percent of all renters. Those who pay more than 50 percent are “severely cost burdened – that’s 26 percent of Vermont’s renters, and 12 million of the nation’s households.)

Undeniably, household spending patterns change over time. A study by the Bureau of Labor Statistics of 100 years of consumer spending found that, on average, the percentage of income spent on housing has gone up: From 23 percent in 1900 to27 percent in 1950 to 33 percent in 2002-03. (That’s right, Vermont’s cost-burdened percentage of about 50 percent is close to the national average.) Meanwhile, the share spent on food went down — from 42 percent in 1900 to 13 percent in 2002-03.

The Fortune article argues that we should all expect to be spending a larger share of our income on housing today than back in the Depression. On the other hand, a threshold of roughly 30 percent still means something to mortgage lenders, so maybe it’s not as obsolete as it might look. What’s more, a 2006 Census Bureau study that looked at the history of the 30 percent housing benchmark concluded that it was still appropriate, especially for families of lower incomes.

thirtyb

The fact is that a family with an income $200,000 or more can more easily afford to spend a higher percentage on housing and have plenty left for other necessities. For a family like  that, a housing “burden” is considerably more bearable.

 

Whither, or whether, the South End

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We’d be remiss if we didn’t take note of the Plan BTV South End draft, a colorful 100-page compendium that invites comments through Oct. 1. The draft of course addresses the need for new housing, a controversial subject in the good old South End.

The report’s cover is a nice touch – nothing phony or public-relationsy about it. it’s a workaday portrait with its sandy footpath and telephone poles, warehousey landscape.

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That’s all apt, because the South End is nothing if not “funky.” That’s the recurrent adjective assigned to the neighborhood in this document. Just for kicks, we looked up “funky” in the online Urban Dictionary:

  1. Different but cool/nice.
  2. A bad smell.

Plan BTV’s” funky” is presumably of the first definition – akin to the quality Vermonters like to ascribe to their state generally. But no doubt there are irate Burlingtonians who impute the second definition to this draft report and its qualified appeal for housing in the enterprise zone.

Burlington certainly needs plenty more affordable housing, so why shouldn’t a good share of it be located in the mixed-income South End, given that’s a major employment center (6,300 jobs, according to the report)? The big fears seem to be that more housing will drive up land prices beyond the wherewithal of artists and artisans, and that the housing itself will gentrify the neighborhood.

The report calls for new housing outside the enterprise zone, where housing is already permitted, with affordability stipulations.

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New housing inside the zone could take the form of artists being allowed to live in their studios (“work-live units”), with affordability stipulations; or affordable housing units designated specifically for certified artists (an interesting idea, but we’re wondering if there’s precedent for targeting affordable housing to a particular segment of the lower-income population). Either way, artists would have to jump through some not-very-funky hoops to qualify.