Category Archives: affordable housing

Strange bedfellows, or not

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Not long ago we heard a tidy summary of two converging demographic trends bearing down on the affordable-housing problem:

There is the surging population of older people, Baby Boomers and beyond, who are looking to downsize.aging2

Then there is the younger-adult population — Millennials, Gen-Xers — who are looking to up-size but can’t afford to, as they postpone buying homes.

Might there be a way to meet these divergent generational needs in some way that somehow preserves neighborhoods with a stamp of affordability?

That’s a key challenge that one of the presenters in our “Thriving Communities” seminar, John E. Davis, posed at the end of his discourse. (You can see the seminar in webinar-slide form if you click here, or in video mode if you click here.) He admitted he didn’t have any easy answers.

Neither do we, but we have a few notions that might prolong the discussion. These ideas are predicated on the fact that older people, overwhelmingly, want to age in place (that is, in their own homes); that in many cases, those homes are too big for them to manage; that increasingly, older people are open to the idea of home-sharing (as we noted in the post about a recent AARP survey in Burlington). Why not look for ways to convert big, empty houses into spaces that can accommodate both an aging widower and a young family?burlingtonhouse

One way would be to encourage — and drop regulatory barriers from — the addition of accessory dwelling units. (For an article on how zoning can facilitate aging-in-place, click here. For an essay on aging-friendly land-use policies, click here.) The new unit could be an annex that the older person would occupy, freeing up the main house for other residents.

Or the new unit could be a self-contained space within the house itself. We’ve seen articles touting the idea of grown children adding an “in-law suite” to their own homes to house an aging parent. Why not turn that around, so that that aging person’s home is remodeled to include an independent suite that the aging person parent can then occupy, opening up the rest of the house for another owner, perhaps a young family?

family

How might affordability enter this picture? Perhaps as a condition of publicly subsidized financing that could be offered to promote construction of accessory units or the conversion of big old houses into duplexes. Various tax incentives could be offered for older home-owners to take these steps.aging1

And who knows, maybe the hide-bound mortgage world could be expanded to include new forms of co-ownership or shared equity for some no-longer-strange bedfellows: Older empty-nesters aging at home compatibly under the same roof as younger full-nesters.

 

 

Note by Ted Wimpey:

Another good option for “aging in place” is “home sharing.” Check out HomeShare Vermont for a good example.
http://www.homesharevermont.org/about-us/

“HomeShare Vermont helps people stay in their homes by connecting them with potential housemates who are looking for a place to live. While our primary goal is to help elders stay at home, we have found that people of all ages and abilities can benefit from homesharing. There are no age, ability or income restrictions to use our services. “

 

Better than nothing

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Off-year election round-up:

  • In San Francisco, where housing issues dominated the ballot — or at least the election coverage – Proposition F naturally got the most attention.  sanfrancisco2That was an initiative to restrict Airbnb, which proponents argued is effectively reducing the city’s housing stock via the proliferation of pricey short-term rentals. Prop F inspired a kind of media circus, with Airbnb investing $8 million in a campaign to defeat it, with pro-Prop F forces occupying Airbnb headquarters the day before the election. Voters said no, in any event, 55 percent against. If you want to learn more about Prop F in excruciating detail, click here.

Voters said yes, though, to Proposition A, $310 million in housing bonds for developing and maintaining affordable housing – the first such bonding question to gain approval in San Francisco in nearly two decades, so apparently the affordability crisis there is registering the electorate. They said no, however to Proposition I, a moratorium on market-rate developments in the historically Latino Mission District.

Of course, there’s a school of thought that the housing crisis in San Francisco and everywhere else is mostly a supply and demand problem, and that if development were allowed to flourish without political or regulatory constraints, prices would go down, or at least, not go up so fast. One problem with that argument in a place like San Francisco is that the population isn’t fixed: There are simply too many moneyed people (techies, among them) poised to move in to town to pay the soaring prices that the market can bear when the housing supply grows.

  • In Maine, voters overwhelmingly approved Question 2, a $15 million bond to underwrite 225 affordable units for older people and to fund repairs for 100 homes of low-income aging. oldguy “That’s a drop in the bucket,” said the Portland Press Herald in an editorial, given the “demographic storm” coming to Maine. (Maine officialdom is anguishing about the  greying population, same as in Vermont.) Still, it’s better than nothing.

 

 

 

 

  • In Summit County, Colo. (home to Breckenridge), voters agreed to maintain a tax that supports workforce and affordable housing. It’s a sales tax of 0.125 percent. Doesn’t sound like much, but again, it’s better than nothing.  Perhaps the Vermont townships that host ski areas can come up with something more generous for their workers.

Where growth yields to high rents

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Here’s another way to look at the housing-affordability problem: as a damper on economic growth. city1

Two economists published a study this summer that essentially made that point. They analyzed growth rates of 220 metropolitan areas and how those rates contributed to national growth from 1964 to 2009. They found, surprisingly, that some of the most productive cities, where pay rates also happen to be high, actually contributed less to overall growth than one might have expected. That’s because employment didn’t grow proportionately in those cities — they cite New York, San Francisco and San Jose in particular — in large part because of housing constraints.

“The main effect of the fast productivity growth in New York, San Francisco, and San Jose was an increase in local housing prices and local wages, not in employment,” write Chang-Tai Hsieh, of the University of Chicago, and Enrico Moretti, of U.C.-Berkeley. “In the presence of strong labor demand, tight housing supply constraints effectively limited employment growth in these cities.”

In other words, workers were prevented from migrating to these productive, high-wage areas because they couldn’t find affordable places to live. By contrast, three-fourths of U.S. growth in those years was attributable to Southern cities and a group of 19 other cities, where housing was more plentiful and wages were lower.

city3

Their article has an overweaning title, “Why do cities matter? Local growth and aggregate growth,” but it’s worth noting their conclusion that the housing constraints in the productive, high-wage cities derived from restrictive or exclusionary land-use regulations. They write:

“Constraints to housing supply reflect both land availability and deliberate land use regulations. We estimate that holding constant land availability, but lowering regulatory constraints in New York, San Francisco, and San Jose cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. Our results thus suggest that local land use regulations that restrict housing supply in dynamic labor markets have important externalities on the rest of the country. Incumbent homeowners in high wage cities have a private incentive to restrict housing supply. By doing so, these voters de facto limit the number of US workers who have access to the most productive of American cities.”

And here’s what they say about Silicon Valley, the region between San Jose and San Francisco, which has “some of the most productive labor in the globe. But … by global urban standards, the area is remarkably low density due to land use restrictions. In a region with some of the most expensive real estate in the world, surface parking lots, 1-story buildings and underutilized pieces of land are still remarkably common due to land use restrictions. While the region’s natural amenities—its hills, beaches and parks—are part of the attractiveness of the area, there is enough underutilized land within its urban core that housing units could be greatly expanded without any reduction in natural amenities. Our findings indicate that in general equilibrium, this would raise income and welfare of all US workers.”

Sounds like the technological mecca is plagued by exclusionary zoning.

The economists propose two remedies, neither of which is plausible in the current political climate. One is for the federal government to place limits on locally set land-use regulations. The other is to finance mass transit (such as high-speed trains) that would enable workers to commute to these productive areas without having to live there.

Now then, might any of this translate to Vermont? Consider:

Burlington is an analogue to San Francisco. Of the state’s 19 labor market areas, Burlington/South Burlington’s average annual pay is the highest, by far — $48,529, or about $10,000 more than half the other areas in the state.) Burlington also has an affordable housing shortage that could be termed above average: 61 percent of Burlington’s renters are house burdened (paying more than 30 percent of their income on housing), compared to a state average of 52 percent; and 36 percent are severely house burdened (they pay more than 50 percent), compared to a state average of 26 percent.

So, following their argument, might it be that Vermont would be growing at a higher rate if more workers could afford to live in or near Burlington, one of the state’s highly productive cities? Is Burlington channeling much of its productivity growth into higher housing prices and higher wages?

Lake Champlain Burlington, Vermont.

Perhaps, perhaps not. In Burlington’s favor is a higher rate of employment growth than (3 percent, from 2014 to 2015) than most anywhere else in the state.

On the other hand, employment here might well grow even faster if more workers from the provinces could afford to live here.

Housing notes from all over

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shippingcontainers1

  • Before you dismiss the idea that shipping containers can be used for housing, consider this student-housing complex in Amsterdam, as described by The Guardian. Can you imagine something like this on the northwest corner of Burlington’s Main Street/S. Winooski intersection, which has been suggested as a possible site for privately developed UVM student housing?

 

  • The City Council in Portland, Ore., where a “housing emergency” has been declared and where rents have risen more than 20 percent over five years, boosted the city’s affordable housing fund by $64 million. The money comes from a property-tax set-aside, and the council is looking for more revenue sources.  Portlandcoliseum And one of the councilors has lofted an idea that some other cities beset by under-used mega-athletic complexes might want to seize upon: sell the Portland Coliseum for to a developer who will put affordable housing in its place.

 

 

 

  • As we’ve noted before, the nationwide initiative to affirmatively further fair housing calls for affordable housing development (at least a good share of it) in low-poverty, “high-opportunity” areas. A country club would seem to fit that description, at least generically. So we were interested to learn that the Planning Board in Mahwah, N.J., recently approved the redevelopment of a country club there for affordable housing.

mahwahclub

Before you get too excited, though, you should know about the downside: Much of the land is contaminated from years of pesticide spraying, and the cost of remediation (which includes removal of hundreds of trees) contributed to a reduction in development’s affordable capacity: down from 350 multi-family units to less than 100 single family homes.

  • Uber will deliver $1 million to Oakland’s affordable housing fund for the privilege of turning a former Sears building into an office space. oaklanduberThe deal was prompted partly by fears that Uber’s corporate arrival, with an anticipated 3,000 employees, would lead to gentrification and even higher housing prices.

 

  • Attention, City Market, Hunger Mountain, et al: A food co-op in affordability-challenged Asheville, N.C., is contemplating adding affordable housing to its expansion plans, which also (and less intriguingly) include enlarging its existing store, parking lot and office space. ashevillecoop

 

 

 

 

  • Speaking of parking, the Berkeley City Council has voted to target underused parking-lot space for affordable housing development. Berkeleyparkinglot2 Council members were reminded at the meeting that the average cost of a 1 bed-room apartment is $1,400 a month, and that’s under rent control! The average cost of an apartment not under rent control? $3,256 a month.

Not bad, could be better: AARP’s take on BTV’s ‘livability’

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A willingness to consider home-sharing is among the key findings of a new AARP survey of 500 Burlington residents age 45 and older.

Burlington2When asked if they would be open to a home-sharing arrangement with a person who could provide services in order for them to continue living in the home, 56 percent of the respondents said yes. That was up from 36 percent in an AARP survey nine years ago.

The new response suggests a pent-up demand for more accessory dwelling units on properties where older Burlingtonians want to age in place — which most respondents clearly wish to do. Seventy-nine percent “strongly agreed” when asked about their desire to remain in their current home, and 80 percent rated Burlington as a good or excellent place for older people to live.

The home-sharing finding suggests that current services, mentioned in a previous post, are undersubscribed. It also points to a need for a supportive regulatory climate for accessory dwelling units, which are, after all, an important piece in the chronic puzzle of how to come up with more affordable housing.

burlington1

Another housing finding of note: Asked their opinion about building moderate- to low-income housing units in vacant lots in Burlington, 67 percent responded favorably, with 32 percent opposed. These numbers might have been slightly higher/lower is the question had used the contemporary term of choice, “affordable housing,” which has a nicer ring but which is, we have to admit, something of a euphemism.

Asked for their concerns about what might make it difficult to age in place, “high cost of living” topped the list, but it remains unclear which kinds of costs, specifically, are at issue.

Besides housing, transportation and “community engagement” were spheres covered by the telephone survey, which comprised 20-minute telephone interviews of randomly selected people. The margin of error was 4 percent. To see the full survey, “The Path to Livability: A Citizen Survey of Burlington, Vermont,” click here.

A presentation of the survey results by researcher Joanne Binette was made in AARP’s Burlington office to an audience of about two dozen people, among them housing and transportation specialists.

Burlington4

Older people in Burlington get around in multiple ways. Driving is still the main way (83 percent), but these people also walk (68 percent) and bike (41 percent) or take the bus (27 percent) at least some of the time.

Generally, they find it easy to get around even if they couldn’t drive (66 percent). The main drawback to bus service, they said, was the lack of weekend or evening service. (One set of bus concerns relates to schedules and routes, another to bus stops and access to them.)

Fifty-fiBurlington7ve percent said they would bicycle if conditions for cyclists were better.

But are the streets safe? Apparently they’re more so for bicyclists (51 percent said streets are safe for cyclists) than for people with disabilities (41 percent), older people (36 percent) or children (33 percent) or pedestrians (27 percent).

Respondents had opinions on improving sidewalks and bus service, but appeared to be relatively satisfied with educational and social activities available to them in Burlington.

 

 

Sleeper issue snoozes on

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cnbcdebateWe’ve read through the transcripts of the two GOP-presidential-candidate debates held on CNBC last night, in order that — to steal one of Gail Collins’ recurrent lines — you don’t have to do it.

The two debates, of course, featured the “undercard,” with four candidates, and the “main card,” with 10.

In nearly four hours of discussion, the word “housing” was uttered once. That was when Rand Paul lambasted the Federal Reserve Board for, among other alleged malfeasances, having “caused the housing boom and the crisis…”

The candidates had nothing to say — nor were they asked by their CNBC interlocutors — about the housing unaffordability that afflicts millions of Americans, or about persistent residential segregation by race and income. And they had virtually nothing to say about the bubble-burst that ushered in the Great Recession. Maybe that’s partly because the bubble was fed by the kind of deregulation that small-government proponents are fond of promoting.

True, six of these candidates had been given brief opportunities to hold forth at a daylong “housing summit” in New Hampshire that we noted last week (here’s yet another account of that event, by the way), but it seems unlikely they were each talked out after that experience. Perhaps they, their fellow contenders, and the CNBC panel all agree with Chris Christie’s comment at the summit that housing is an unsexy issue that “kind of depresses people.”

On the other hand, the candidates talked a lot last night about other things they presumably think are depressing, such as ”big government” and taxes. One might have expected that housing could get some attention in a debate that was supposed to focus on economic matters.

Perhaps the candidates believe that their various plans for shrinking government and “growing” the economy will jump-start the private market to spur housing development, raise incomes of working families, and take care of the affordable housing problem. If so, it would be nice if they’d explain in some detail how that will work.

It would be even nicer if reporters would start making them talk about it.

 

Affordability with an expiration date

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expireIf we’re going to address the housing-affordability shortage, two things have to happen. The first is obvious: more affordable units have to be built or developed. The second is less obvious: For the affordable units that already exist, insufficient as they are, affordability has to be preserved.

Preservation is necessary because affordability typically derives from public subsidies, such has low income housing tax credits, that expire – after 15 years, in the case of LIHTC. As the expiration nears, a private owner might well be tempted to convert the units to market rate or to sell to a new owner who will have no affordability restrictions. Such a sale might be particularly tempting in hot real estate markets.

A wave of coming expirations across the country prompted this ominous Blooomberg headline last week, “A lot of cheap housing is about to get very expensive.” The story drew from an Urban Institute blog post on a review of 1.2 million project-based rental assistance units around the country that found about one-third were at risk of losing their affordability status in the next couple of years. The Urban Institute researchers recommended that local preservationists (such as housing non-profits and land trusts) focus their efforts on units in “high-opportunity” or low-poverty areas, where owners’ temptation to convert to market rates might be particularly strong.

greenhousemorgue1

Vermont, mercifully, has benefited from a concerted preservation effort since the late ‘80s – a combined initiative of state agencies (Vermont Housing Finance Agency and Vermont Housing & Conservation Board) that marshal state and federal dollars to provide and extend subsidies, and non-profit organizations, such as land trusts, that step in to acquire properties before they disappear from affordability ranks.

A survey last year turned up 822 units in privately owned apartments in Vermont with subsidies due to expire before 2020. An additional 1,649 units controlled by non-profits were found to be eligible for new investments, such as capital improvements or subsidy-extensions, before 2020.

Whether Vermont will be able to maintain its historically high rate of preservation for these units will depend, in large part, on the availability of public funds to underwrite the needed subsidies and investments, and the outlook for that, at both state and federal levels, is dubious.

burlingtonapt

And even if Vermont could preserve the affordability in perpetuity of all the current affordable units, there aren’t anywhere near enough of them to meet the demand. Many more affordable units have to be developed, and more public money will be necessary for that, too. That’s money that won’t be available until political leaders make housing a priority.

 

California’s sideshow

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Nowhere, seemingly, is the U.S. housing crisis more acute than in California.

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So you might suppose that here, in unassuming, modestly-overpriced Vermont, we can safely ignore what’s unfolding in California. To the contrary, it does make sense to pay some attention, for these reasons:

 

  • California social trends and public policies have a way of diffusing through the rest of the country. Not only that, middle-class Californians, in exodus because they’ve been priced out of the housing market, are moving in droves to other parts of the country and effectively bidding up housing prices in the places where they relocate.
  •  Sundry housing-affordability initiatives in California might give us some ideas about what to do here. San Francisco has a Nov. 3 election with a ballot full of affordable housing measures. Redwood City, to the south, just approved an affordable-housing impact fee over developers’ objections. People in L.A. are looking into the prospects for land trusts, something Vermonters already know a fair amount about. And as we’ve mentioned before, school districts are facilitating workforce-housing developments merely to attract and retain teachers.
  •  California generates much of what we consume here as mass-media entertainment, so we should be aware of the social context.
  •  Unavoidably, the part of entertainment value in what we’re hearing about the extraordinary California housing market, especially the one in the Bay Area, is in the form of Schadenfreude. Apparently, “there goes the neighborhood” applies when Apple employees start moving in.

Any dreams you have of moving out there should be dispelled by this short film, “Million Dollar Shack,”

a middle-class lament is filled with tales of egregiously over-priced properties, skyrocketing rents, absentee overseas investors, etc.

 

At the root of school segregation

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It wasn’t the failure of “forced busing” that led to current racial disparities in school achievement outcomes. The problem, rather, is that the nation’s schools have become more segregated over the last three decades, as integration dropped from the agenda of education policy-makers.

So wrote a Syracuse University education professor, George Theoharis, in an interesting piece in the Washington Post Sunday. syracuse1

Two startling observations derive from his home town — which happens to be in our neck of the woods.

He notes the enormous disparities in programs, and outcomes, between a middle school with an 85 percent black and Latino student body and another middle school, 10 miles away, that’s 88 percent white. And he points out that in 1989, the city’s schools were about 60 percent white and 20 percent black/Latino, and that now, the district is 28 percent white, 55 percent black/Latino.

Theoharis goes on to discuss how a renewed emphasis on desegregation in educational policy could provide remedies: Redesigning school districts, for example, and putting them together “like pie pieces, so they cut across urban, suburban and even rural spaces”;  or creating magnet schools; or providing incentives to school districts to desegregate.

(Note: Magnet schools were the Burlington School District’s remedy for socioeconomic achievement gaps.)

But Theoharis never delves into the heart of the matter: residential segregation. This has grown worse in many cities since 2000, with an increase in the number of high-poverty neighborhoods, as we noted in an earlier blog post citing “The Architecture of Segregation,” a paper that detailed the demographic trends. In Syracuse since 2000, according to that paper, “the number of high-poverty tracts more than doubled, rising from twelve to thirty… As a result, Syracuse now has the highest level of poverty concentration among blacks and Hispanics of the one hundred largest metropolitan areas,” as shown in this table:

syracusetable

 

 

 

 

 

 

The takeaway is that addressing residential segregation iskey to addressing school segregation. Another analysis of school segregation and racial performance disparities, by the Economic Policy Institute’s Richard Rothstein, put it like this:

“Education analysts frequently wonder why a black–white achievement gap remains, even when individual poverty and family characteristics are similar. Partly it’s because of greater (and multigenerational) segregation of black children into neighborhoods of high poverty, few employment opportunities, and frequent violence….

“It is inconceivable to think that education as a civil rights issue can be addressed without addressing residential segregation … Housing policy is school policy; equality of education relies upon eliminating the exclusionary zoning ordinances of white suburbs and subsidizing dispersed housing in those suburbs for low-income African Americans now trapped in central cities.”

That’s what affirmatively furthering fair housing is all about, right? But you already knew that.

 

Right under our nose

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We’ve heard a lot over the last few years, both in Vermont and nationally, about how “health care is a human right.” But what about housing as a human right?

If we haven’t been hearing much about that, it’s because we haven’t been paying attention.

UN1

Adequate housing as an international human right has been a familiar theme in the United Nations for years. In fact, it’s centerpiece of the message that the U.N.’s housing rapporteur delivers regularly to the General Assembly. The current rapporteur, appointed last year, is Leilani Farha, executive director of Canada Without Poverty, a lawyer. Her full title is “Special Rapporteur on adequate housing as a component of the right to an adequate standard of living.”

That title derives from the Universal Declaration of Human Rights, adopted in 1948, which, while not declaring housing a right per se, does say this:

Article 25.

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services …

and this, foreshadowing the spirit of fair housing law:

Article 13.

  • (1) Everyone has the right to freedom of movement and residence within the borders of each state.

Over the years through assorted covenants and agreements, we learn by browsing U.N. documents, housing has achieved recognition as a human right.

Here we pause to note that much of the Universal Declaration of Human Rights (which is worth reading, if refresh your memory of how many rights remain unfulfilled) has been willfully ignored by many U.N. members. And of course the U.N. has negligible power to enforce compliance. (We seem to recall that the U.N. brought its “water is a human right” message to Detroit last year. How did that turn out?)

We turn now to the website of the U.N.’s High Commissioner for Human Rights:

“Increasingly viewed as a commodity, housing is most importantly a human right. Under international law, to be adequately housed means having secure tenure – not having to worry about being evicted or having your home or lands taken away. It means living somewhere that is in keeping with your culture, and having access to appropriate services, schools, and employment.

“The right to housing is interdependent with a number of other human rights: rights to health, to education, to employment, but also to non-discrimination and equality, to freedom of association or freedom from violence, and ultimately to the right to life.

Too often violations of the right to housing occur with impunity. In part, this is because at the domestic level housing is rarely treated as a human right…”

The rapporteur’s 2014 report notes that “under international human rights law, it is the State that is held responsible for the compliance with international human rights to which it is bound.” That means national governments, but also, in the case of housing, “state/provincial and municipal governments.”

She acknowledges that ”the evolving nature and diversification of the State and the multiplicity of actors who may be involved in fulfilling its obligations under international human rights law make implementation all the more complicated.”

She can say that again, in housing’s case.