Category Archives: Uncategorized

Parsing the disparate-impact ruling

Uncategorized, , , , ,

 

Fair Housing Law cognoscenti will be happy to learn of new journal article by Robert G. Schwemm, acknowledged to be a principal academic authority in these matters. In a Columbia Law Review sidebar, Schwemm takes on the recent U.S. Supreme Court ruling on disparate impact and sorts through the ramifications, “What’s new and what’s not.”

supremecourt2

Even for non-cognoscenti this article can be useful, given that it’s a fairly breezy (for a law journal) way of catching up with fair housing developments.

The court’s opinion – which essentially upheld the longstanding theory that discrimination is legally actionable by virtue of its effect, not merely intent, was celebrated by fair housing advocates all over the country. The impact on Vermont remains to be seen, however, because disparate-impact arguments typically rely on statistics, and Vermont communities are so small that statistics are not always meaningful.

Still, Schwemm ‘s article makes several points worth Vermonters’ notice, among them:

–the established practices, since the mid ‘70s, of using disparate impact to challenge “exclusionary zoning and other land-use restrictions by local governments that blocked or limited housing proposals of particular value to racial minorities or persons with disabilities.”

–the additional protected classes that Vermont (and many other states) added in their own fair housing laws are specifically preserved under the federal Fair Housing Act. Those additional categories in Vermont include receipt of public assistance (e.g. Section 8), sexual orientation and gender identity. The implication is that, because of the Supreme Court decision, disparate-impact claims could be made successfully for people in these, state-specific categories as well. Assuming, that is, that the plaintiff could get the necessary numbers in order.

 

An affordable-housing outlier

Uncategorized, , , , ,

A common refrain in the national “conversation” about the affordable housing crisis, or shortage, is that development of new multi-family rentals is, well, costly … even unaffordable, in some cases.

One standard cost we’ve seen bandied about is $200,000 per unit. That’s the figure set out in the Windham & Windsor Housing Trust’s treatise on this topic, “Why does it cost so much to construct affordable housing?”

The other day we stumbled across an article about a developer in Portland, Ore., who operates on a different model — tight scheduling, efficiency, no frills, and remarkably, all-private financing — without public subsidies. The result: a unit cost of around $70,000. Here’s a glimpse:

portland4

We can’t vouch for the economics of this, but the website of the developer — Home First Development — links to an article, “Building affordable units for less,” that offers a thumbnail accounting of the approach taken with a 27-unit apartment complex built for $1.89 million. This development is in east Portland, a few miles from downtown, so we presume the land was less costly than for a comparable site close in.

Another, more recent development, also in east Portland, comprises 78 one- and two-bedroom units that rent for $395 to $775 a month, according to the news story that sparked our interest. The cost of building that project? $5 million.

In each case, the developer began by estimating how much low-income tenants (e.g., $24,000 a year) could afford to pay for housing, then worked through the financing with that constraint.

Might such a model be replicable? You be the judge.

 

Mapping the rental-affordability shortage

Uncategorized, , , ,

The Urban Institute has a tidy synopsis of the rental-affordability crisis that we keep referring to, complete with an interactive national map with data at the county level. Key points in the narrative: the rental population is increasing, the availability of affordable units for poor people is declining, and the responsibility of the federal government to do something about remains paramount. (We might add that the penchant of national leaders is in decline.)

Nationwide, in 2013, there were just 28 affordable living units per 100 renter households of extremely low income, down from 37 in 2000. Here’s the national map:

crisis3

The darker counties have more units per low-income population. (Jones and Wayne counties in Mississippi are at or near the top, at 71. Click here for the interactive map.)

Vermont does a little better than the national average. Here’s the Northeast map, with Lamoille County highlighted:

crisis5

The figures for Vermont counties:

Caledonia, Lamoille, Orleans, Washington: 29 affordable units per 100 extremely low-income households.

Grand Isle: 32.

Chittenden, Franklin: 35.

Addison, Bennington, Rutland: 47.

Orange, Windham, Windsor: 49.

Those numbers may look impressive compared to some other states, but don’t forget that a majority of the extremely low income population is still out in the cold.

 

And you thought things were bad here!

Uncategorized, , , , , , , , , , ,

Now and then it’s nice to get an international perspective even on the most domestic of concerns, like housing. Poking around for comparisons, we stumbled across the “11th Annual Demographia International Housing Affordability Survey: 2015.” This is an interesting document, but rather limited:

  • The domain is restricted to six Anglophone countries,  plus Japan, Singapore and Hong Kong.
  • The “affordability” measure reflects home prices, not rental rates. That measure, the “median multiple,” is the median house price divided by gross annual household income. A median multiple of 3.0 or below is deemed “affordable”; 3.0 to 5.0, “moderately affordable”; and above that, least affordable.”

Anyway, the United States comes off pretty well among this selective international contingent, with an average multiple of 3.4. Canada (3.9), Japan (4.4), Singapore and the U.K. (5.0) are all higher, as are New Zealand (5.2), Australia (5.5) and Hong Kong (17.0). Ireland comes in at most affordable, at 3.0

(Hong Kong’s figure is astounding, but we suspect it’s not uniquely high, world-wide, and we look forward to future surveys that include the likes of Qatar and Luanda, Angola.)

hongkong2

Here’s the survey’s summary of 378 “major markets”:

 Housing Affordability Ratings by Nation: All Markets
 

Nation

 Affordable (3.0 &

Under)

 Moderately Unaffordable (3.1-4.0) Seriously Unaffordable (4.1-5.0) Severely Unaffordable (5.1 & Over)  

Total

  

Median Market

 

 

Australia 2 1 15 33 51 5.5
Canada 5 16 9 5 35 3.9
China (Hong Kong) 0 0 0 1 1 17.0
Ireland 3 1 1 0 5 3.0
Japan 0 1 1 0 2 4.4
New Zealand 0 0 3 5 8 5.2
Singapore 0 0 1 0 1 5.0
United Kingdom 0 3 14 16 33 5.0
United States 88 97 32 25 242 3.4
TOTAL 98 119 76 85 378 3.8

As usual, major market” data exclude Vermont. Vermont’s “median multiple,” by our rough calculation using numbers from Vermont Housing Data, hovers around 4.0 (3.7, based on adjusted family income, and 4.2 based on household income).

By this measure, we’re considerably less affordable than cities in the western hinterlands:

 Affordable Major Metropolitan Markets
Rank Nation Metropolitan Market Median Multiple
1 U.S. Detroit, MI 2.1
2 U.S. Rochester, NY 2.4
3 U.S. Buffalo, NY 2.6
3 U.S. Cleveland, OH 2.6
5 U.S. Cincinnati, OH-KY-IN 2.7
5 U.S. Grand Rapids, MI 2.7
5 U.S. Pittsburgh, PA 2.7
5 U.S. Saint Louis, MO-IL 2.7
9 U.S. Atlanta, GA 2.9
9 U.S. Indianapolis, IN 2.9
9 U.S. Kansas City, MO-KS 2.9
9 U.S. Louisville, KY-IN 2.9
13 U.S. Columbus, OH 3.0
13 U.S. Oklahoma City, OK 3.0

We do have plenty of license for Schadenfreude, however, when we look at these places:

 

 10 Least Affordable Major Metropolitan Markets
Rank: Affordability
Least Rank (Out of Median
Affordable 86) Nation Metropolitan Market Multiple
1 86 China Hong Kong 17.0
2 85 Canada Vancouver, BC 10.6
3 84 Australia Sydney, NSW 9.8
4 82 U.S. San Francisco, CA 9.2
4 82 U.S. San Jose, CA 9.2
6 81 Australia Melbourne, VIC 8.7
7 80 U.K. London (GLA) 8.5
8 79 U.S. San Diego, CA 8.3
9 78 N.Z. Auckland 8.2
10 77 U.S. Los Angeles, CA 8.0

 

According to the survey, the median multiple in most of these countries remained in the manageable 3.0-plus range for many years until rural-to-urban migration ran up against land-use restrictions (“urban containment polices”) that drove up prices and made housing unaffordable for middle-income people as well as the poor. The survey’s authors argue that urban containment policies — “smart growth” would be one example — unduly limit housing development on the urban “fringe.”

Hmmm. Are they saying that sprawl is the price of affordability?

 

Segregation back on the table

Uncategorized, , , , , , ,

Here are a couple of readings that expand on some of our previous posts on the inexorable AFFH theme:

littlerock9

“Segregation 101” takes off from an August Times story on Section 8 (that is, racial) discrimination in metropolitan St. Louis. One obstacle to locating more Section 8 voucher holders in middle-class suburbs, the story notes, is a relative lack of rental apartments in such suburbs — in part because of zoning practices that favor single-family homes.

“Segregation Conversation Goes National” offers another rebuttal to the controversial Edsall op-ed and advocates a dual approach to the housing affordability crisis: investing in poor neighborhoods and, on one hand, and settling more poor people in “opportunity-rich” middle-class neighborhoods, on the other. (That seems to be the strategy that Justice Kennedy implicitly endorsed in his disparate impact decision, as we noted previously.)

There’s also a reference to a regional program in Chicago that helps disperse urban Section 8-holders to outlying suburbs. (For an account in The Atlantic, click here.) Elements of that might translate well to Vermont, where the Section 8 program outside of Burlington and several other cities, is already administered by a “regional” agency (Vermont State Housing Authority) that covers the rest of the state.

Meanwhile, the Times lands another editorial today another segregation motif — racial discrimination by real estate agents around the country.

 

So much for the Promised Land to our east

Uncategorized, , , , ,

Does this lament sound familiar?

“Our members in the business community are telling us this lack of affordable and available housing is beginning to impact their ability to hire and retain employees…”

That comment could easily have come from a business leader in Vermont, but instead it’s someone from the statewide chamber of commerce … in New Hampshire!

newhampshire

New Hampshire! That’s where Vermonters go for motorcycle rallies. That’s where Vermonters go to buy stuff, because there’s no sales tax. And that’s where Vermonters might even think about moving to, because there’s no income tax, either … except that New Hampshire is just about as housing-unaffordable as Vermont, maybe more so.

Most renters who work in the Lebanon-Hanover area, according to this story in the Manchester Union Leader, have to commute 25-30 miles. Who, knows, maybe some of them are commuting from our Vermont tax haven!

Well now, if housing unaffordability is a crisis even in almost-tax-free New Hampshire, you might think that issue will come to the fore in the run-up to the presidential primary. Don’t bet on it, though. So far, housing is off the table for contending luminaries in both major parties.

Enough small talk about the two little neighbor states. Let’s go to the numbers, provided by the National Low Income Housing Coalition in its 2014 “Out of Reach” reports:

Vermont:

Fair Market Rent for a two-bedroom apartment: $1,007

Housing wage (i.e., the hourly pay rate needed for that apartment to cost 30 percent of income): $19.36

Estimated average wage for renter: $11.24

New Hampshire:

Fair Market Rent for a two-bedroom apartment: $1,049

Estimated average wage for renter: $13.35

Housing wage: $20.18

 

A wellspring of ideas in droughtland

Uncategorized, , , , ,

 

California sometimes seems like another world, and Vermonters can be forgiven for thinking it has nothing to do with us. But wait: crazy as the housing picture in California is, there are several reasons why we should keep an eye on what’s happening there.

Like it or not, California is a policy trend-setter, and its cutting-edge ideas have a way of filtering through the rest of the country.

calif1

Moreover, we’d argue that the housing problems California is facing are quantitatively different from what we have here, but not necessarily qualitatively — that is, affordable and fair housing challenges are pervasive in both states. (Here’s an example of the quantitative: 2-bedroom apartments in San Jose rent for an average of $2,917, which is affordable to someone with an income of $116,000. And you thought Burlington was bad!) Qualitatively, lower-income workers are priced out of the rental market in both states– and remember, Vermont is a low-wage state, which compounds housing unaffordability.

calif2

Anyway, here are three California housing ideas worth your notice:

  • A real estate fee to be used for funding affordable housing development. Assembly Bill 1335 would impose a fee of $75 to $225 on real estate transactions (with some exemptions) to build a fund for affordable housing development. The legislation reportedly has a good range of supporters.
  • Sue the Suburbs: A novel piece of litigation is in the works after a developer scrapped plans for moderately priced housing in favor of a smaller number of $1 million-plus homes. Click here for a contextual story and here for the website.
  • Gentrification vaccine: In egregiously expensive San Francisco, the storied Tenderloin District has apparently retained a healthy share of affordable housing in the face of market forces. That’s because nonprofits and housing activists have worked for years to ensure that a substantial share of the district’s housing is subsidized or permanently affordable. For an article that gives their collective efforts a catchy moniker, click here.

 

Here’s looking at you, HUD

Uncategorized, , , , ,

 

Today is HUD’s 50th birthday – that is, it was 50 years ago today that President Johnson signed the legislation adding a Department of Housing and Urban Development to the Cabinet. Here’s a photo of LBJ presenting a ceremonial pen to Robert C. Weaver, who later became HUD’s first leader.

lbjweaver2

Of course, we’ll all mark this anniversary in our own ways. If you want to join HUD’s own celebration of “50 years of creating opportunity,” complete with video testimonials and public housing success stories, click here, for a mere chronology, here.

We’d be remiss if we didn’t acknowledge that HUD has come in for plenty of criticism over the last five decades for “straying from its mission” to promote residential integration. For a recent example that appeared as an op-ed in the Baltimore Sun after the recent turmoil in that city, click here. For a critical history of the department published by ProPublica in 2012, click here.

A couple of historical notes: Weaver, who held three Harvard degrees and had served as a New Deal presidential advisor, was the first African American Cabinet secretary. Romney, who served as secretary during Nixon’s first term, was such an ardent champion of affirmatively furthering fair housing that he ran afoul of the White House and was forced out.

Three years ago a reporter could write:

“ProPublica could find only two occasions since Romney’s tenure in which the department withheld money from communities for violating the Fair Housing Act. In several instances, records show, HUD has sent grants to communities even after they’ve been found by courts to have promoted segregated housing or been sued by the U.S. Department of Justice.”

HUD has since stepped up its efforts, and the new AFFH rule is widely seen as a harbinger of more vigorous enforcement of the Fair Housing Act.

Here’s a video clip of LBJ’s remarks 50 years ago, including this nugget: “Our cities and our new urban age must not be symbols of a sordid society.”

 

 

Once more, with feeling

Uncategorized, , , , , , , ,

 

It’s not every day that we can praise the New York Times editorial board for following in Thriving Communities’ wake. Saturday’s editorial, which borrows its headline, “The Architecture of Segregation,” from a study we posted about last month. The editorial, while noting this two summer’s “positive” developments – the Supreme Court’s disparate impact decision and HUD’s AFFH rule – rightly takes federal officials to task for failing, over many years, to enforce the Fair Housing Act. And the editorial invokes Walter Mondale’s comments at the HUD conference last week about how the act’s intent is “not fulfilled” by exclusionary land-use planning.

Sunflower on fence

While government deserves a good share of the blame for the present state of residential racial segregation, there are those in the community of fair housing advocates who contend that the real estate industry has been at fault, too. How else to account for the fact that upper-middle-income black families don’t have comparable access to the neighborhoods where their upper-middle-income white family peers live.

Indeed, one factor that may have contributed to segregated patterns is the choice of many whites to opt out of integrated communities, as Stacy Seicshnaydre pointed out in a law journal article last year, “The Fair Housing Choice Myth.” And one way to address that, Seicshnaydre argued, is to defund exclusion — as application of the AFFH rule promises to do, at least in theory.

Meanwhile, HUD conferees were reminded last week, redlining is still with us, and new cases are in the pipeline.

 

Sleeper issue, Part II

Uncategorized, , , , , , , , , , ,

Last week we looked at what the official websites of Democratic presidential candidates had to say about affordable housing, or fair housing, or ANY kind of housing, and we came up empty. Affordable housing may be a national crisis, and residential segregation may be a national scourge and a key contributor to the unrest in Ferguson, Baltimore and elsewhere, but these issues missing from the Democrats’ campaign discourse these days.

The same is true for the Republicans, but perhaps it’s just as well. A primary candidate in a crowded field benefits by mobilizing zealots and true believers, so the fact that housing is not a flashpoint for various segments of the Republican “base” might not be a bad thing.

GOP

HUD’s affirmatively furthering fair housing  (AFFH) rule has been getting a rise out of conservative commentators, but the presidential candidates apparently don’t think flogging it will get them very far. They’re sticking with more familiar standbys, such as Obamacare and gun regulation.

In any case, just for the sake of balance, we looked at websites of the 17 Republican candidates. Many had “issues” tabs. (Donald Trump, interestingly, has a “positions” tab, and when you click on it there’s only one: Immigration Reform.)

Any mention on these sites of the housing problem in any form?

Jeb Bush: No

Ben Carson: No

Chris Christie: No

Ted Cruz: No

Carly Fiorina: No

Jim Gilmore: No

Lindsey Graham: No

Mike Huckabee: No

Bobby Jindal: No

John Kasich: No

George Pataki: No

Rand Paul: No

Rick Perry: No

Marco Rubio: No

Rick Santorum: No

Donald Trump: No

Scott Walker: No

HUD gets a pass from all of them, even those who inveigh against “regulation” and “big government.”