Tag Archives: affordable housing

The renter minority

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Yesterday’s post took note of the housing burden borne by Burlington’s renters (they pay 44 percent of their income, on average, on rent/utilities). Demographically, that’s a significant burden, because renters in this city are the majority.

In a state where the home ownership rate is over 70 percent, about 9 points above the national average, not many other municipalities can make that claim. Only one other can, in fact: Winooski.

According to the Vermont Housing Data website, 62.2 percent of Winooski’s residents who live in occupied units are renters. In Burlington, the figure is 57 percent.

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These are the only communities in the state where the renter population outnumbers homeowners. The renter-occupant figure for Vermont as a whole is 25.9 percent.

Conscientious readers may recall that Winooski scored No. 1 on the workforce housing index we introduced last month. In case you missed it, that index showed the number of subsidized housing units for every 100 in Vermont’s major employment centers. (We defined major employment centers as municipalities with 2,000 jobs or more in 2014.) Burlington came in at No. 5.

As it happens, several other employment centers that do a relatively good job of providing affordable housing also have big renter populations.

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Barre City’s renter population is 48.5 percent; Rutland City’s, 42.7 percent; Brattleboro’s, 43.2 percent; St. Albans City’s, 46.9 percent; and St. Johnsbury’s, 40 percent.

Of the big suburbs surrounding Burlington/Winooski, South Burlington has the highest renter proportion (30.8 percent). The others are all below the state average: Colchester, 25.8 percent; Essex, 20.6 percent; Shelburne, 17.3 percent; and Williston, 14.9 percent. (All of these communities are “major employment centers,” by the way.)

When people talk about the need for affordable housing in Vermont, they’re talking mostly about multi-family housing for renters (although, yes, efforts to promote accessory rental units, as well as single-family homes/condos for purchase, are important). So, here are a few things to keep in mind about renters in Vermont generally, as compared to homeowners:

  • The median household income for a Vermont renter household ($30,943) is less than half that for the homeowner household ( $64,771).
  • The housing cost burden falls more heavily on renters. Among renters:

— 52.5 percent pay more than 30 percent of their household income on housing, as compared to 32 percent of owners;

–26.4 percent pay more than half their household income on housing, as compared 12 percent of homeowners.

 

 

There but for the grace of God go we

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A report is out from The Century Foundation that exposes interesting national demographic trends that appear, on their face, to have little to do with Vermont. We’re not so sure, though.

“The Architecture of Segregation,” by Paul Jargowsky, argues that the number of high-poverty neighborhoods nationally has increased significantly since 2000 and that poverty has become more concentrated – in part because of policy choices that could be changed to produce a different result. As is typical with national-scale reports like this, the focus is on major metropolitan areas, such as Detroit or St. Louis, so the Vermont reader is left wondering what any of this has to do with us – even if we do want to understand sociological trends around the country that help explain events in places like Ferguson or Baltimore. (Note of regional interest: the metro area with both the highest black concentration of poverty and the highest Hispanic concentration of poverty is a little more than a stone’s throw away: Syracuse, N.Y.)

Well, Vermont may not have poverty concentrations in the scale of the metro areas, but it’s still worth considering whether similar trends feeding disparate residential patterns have been at work here. For example, many suburbs have grown at the expense of cities they surround. Jargowosky’s word for that grown is “cannibalistic.”

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“In virtually all metropolitan areas, suburban rings grew much faster than was needed to accommodate metropolitan population growth,” he writes. That has a ring of familiarity around here. Burlington’s population has been fairly stagnant; the big housing growth is indeed in the suburbs. But to what extent does the new housing reflect the income distribution in the population? What share of the new rental complexes rising from the fields in Williston, for example, are “affordable”?

Jargowskyomes to two conclusions that could have some application here, or at least are worth thinking about:

“Our highly dispersed and profoundly unequal distribution of housing is not inevitable; indeed, it is not the norm around the world. The two main changes that need to occur are simple to state, but hard to bring about. First, the federal and state governments must begin to control suburban development so that it is not cannibalistic: new housing construction must be roughly in line with metropolitan population growth.”

Exactly how state government here (in the absence of county government) would attempt to assert such “control” is an open question.

“Second, every city and town in a metropolitan area should be required to ensure that the new housing built reflects the income distribution of the metropolitan area as a whole. To some, this suggestion may seem like a massive intervention in the housing market.  In fact, exclusionary zoning is already a massive intervention in the housing market that impedes a more equitable distribution of affordable housing.”

This brings us back to beating the drum for inclusionary zoning, which is sadly missing throughout the state, including the booming suburbs of Chittenden County.

 

Where can Section 8 families live?

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We’ve mentioned in several posts that low-income families benefit in various ways when they’re able to live in mixed-income, “high opportunity” neighborhoods. (And we contend that these inclusive neighborhoods benefit, too, in various ways – economically, socially and culturally.)

Here are two publications that document the benefits to low-income children. “The Effects of Exposure to Better Neighborhoods on Children,” which came out in May, found that children in poor families move to better neighborhoods before the age of 13, they wind up with higher educational attainment and higher salaries as adults.

Another paper, “Children and Housing Vouchers,” argued that public policy should promote locating families with housing choice vouchers under the Section 8 program — families who live predominantly in lower-income areas, nationally — in better neighborhoods. (Baltimore’s Housing Mobility Program was cited as an example with documented benefits.) This paper noted that HUD’s Section 8 program, in which voucher-holders rent from private landlords, is in a better position to spread voucher-holders among low-poverty areas than HUD’s project-based public housing program.

All of this got us thinking about housing choice vouchers in Vermont. According to Vermont’s 2015 Housing Needs Assessment, there are about 6,310 housing choice vouchers in this state, and about 3,100 households on the waiting list. To these numbers, add these, from the 2012 Analysis of Impediments to Fair Housing Choice: 23 of Vermont’s 184 census tracts had concentrations of low-to-moderate income people, as shown on this map:

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So, here are our questions of the day, awaiting further research:

  • How many of these voucher holders live in the low-income zones, and how many live elsewhere? (Perhaps HUD’s new data analysis tools supplied under the AFFH rule will help answer this.)
  • What are policy-makers or housing officials doing, if anything, to encourage Section 8 voucher holders to move to low-poverty, high-opportunity neighborhoods?

Granted, HUD’s subsidizable “fair market rents” may rule out units in some properties, particularly, one- or two-unit “non-conventional” housing that according to the Needs Assessment tends to be pricier in Vermont. Still, HUD’s Fair Market Rents for Chittenden County, according to the assessment, seem high enough to allow voucher holders a good deal of choice. They range from $1,003 for a one-bedroom apartment to $1,925 for 4 bedrooms.

 

‘Heated’ conflict over affordable housing?

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A provocative op-ed in the Times last week by Thomas Edsall has ruffled a few feathers. He took on the question of whether public housing subsidies should be directed to impoverished neighborhoods or to upscale areas.

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Pushing the former is something called the “poverty housing industry,” which he called “a de facto alliance of multimillion-dollar nonprofit housing companies, city politicians, state and local housing authorities” and others. Pushing the latter are those who advocate integration of poor minorities in more well-to-do neighborhoods. The result, Edsall wrote, is a heated conflict “within the affordable-housing community.”

He argued that some large nonprofit development companies benefit by confining their low-income housing developments to low-income areas. Bolstering the critique of that stance by the integrationists are three things: academic research that shows benefits to low-income children whose families are resettled in low-poverty areas; the Supreme Court decision upholding disparate impact; and HUD’s AFFH rule, which among other things calls for breaking up patterns of historic residential segregation.

A critical response to Edsall’s piece was soon in coming. A blog post on the website of the giant law firm Nixon Peabody took him to task for various alleged distortions and oversimplifications. Among other things, Edsall was said to have overlooked the obstacles to developing affordable housing in affluent areas – the high cost of land, the resistance by residents, and so on.

It’s also worth noting that Edsall, in citing the Supreme Court decision, did not mention the caveat in Justice Anthony Kennedy’s opinion that left the door open to continuing to invest in poor neighborhoods:

“It would be paradoxical to construe the Fair Housing Act to impose onerous costs on actors who encourage revitalizing dilapidated housing in our Nation’s cities merely because some other priority might seem preferable,” Kennedy wrote, adding:

“The FHA does not decree a particular vision of urban development; and it does not put housing authorities and private developers in a double bind of liability, subject to suit whether choose to rejuvenate a city core or to promote new low-income housing in suburban communities.”

What does all this have to do with Vermont? Edsall’s primary targets are big, national nonprofits working in impoverished sections of major U.S. cities. His critique doesn’t seem to apply much in this rural state, although socioeconomic integration does present a challenge here.

Comments, anyone?

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.

 

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.

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:

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  • 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?

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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.

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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.