Tag Archives: Burlington

Surprise! Some rents going down

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Burlington’s chronic housing-affordability problem is bad enough — more than a third of the city’s 9,500 renting households are paying more than half their income for rent and utilities, which puts them in the “severely burdened” category — but guess what? It’s getting arguably worse. burlingtonapt

HUD just came out with its 2016 fair market rents for the Burlington/South Burlington metro area, and they’re lower than they were for 2015. This despite the fact that actual rents in this area have been going up every year. (The 2016 numbers are up and down across the state, as Vermont Housing Finance Agency’s news blog helpfully details.)

If you really want to know why Burlington’s numbers went down, you can go to the HUD page to see the methodology. The unfortunate upshot, though, is that anyone with a Section 8 housing voucher is going to have less to choose from in 2016 than they do this year. That’s because apartments that cost more than the “fair market rent” are off-limits for subsidy. (If it makes you feel any better, remember that majority of Burlington’s “burdened” households don’t have vouchers anyway. Nationally HUD rental assistance extends to only about one-fourth of the people who are income-eligible.)

OK, let’s consider a two-bedroom apartment. The 2016 “fair market rent” is $1,172 (as compared to 2015’s $1,302). What are the offerings on Craigslist?

Here are the first 10 listed rents for two-bedroom apartments in Burlington and environs (South Burlington, Colchester) that we found at noon Monday. (Craigslist is constantly updated, so if you do the search the results will vary):

$2,500, $1,600, $2,500, $2,100, $1,425, $2,400, $2,025, $2,000, $2,000, $1,650.

How “fair” is that market? Now, perhaps Craiglist rents tend to be above average (are there studies that document this?), but there’s not much consolation in that, especially if you have a housing-choice voucher.

New life for old idea?

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When the housing-unaffordability problem comes up at a public meeting in Burlington, chances are someone will stand up and call for rent control.  rental1Never mind that the city rejected the idea three decades ago and no one has made a serious effort to revive it locally. It’s an idea that never goes away, though, and is getting some fresh currency these days — where else, in California, the housing-unaffordability epicenter.

Rent control’s heyday was in the ‘70s and ‘80s, apparently. Massachusetts did away with it in 1994 via a statewide vote, but it can still be found in many municipalities in New York, New Jersey and Maryland, as well as California, where tenants’ advocates are pushing to get more communities to sign on and have come up with an organizing toolkit. “Rent control moment gains momentum as housing prices soar,” read a recent news headline, but a closer look suggests that much of the impetus is in California. Most states, after all, have laws that prohibit rent control, although in Washington, there’s an effort to lift the ban for Seattle.

Any groundswell in favor of rent control would have to grow out of large numbers of renters, and renters are certainly on the increase nationally. A new Harvard report announces that “that 43 million families and individuals live in rental housing, an increase of nearly 9 million households since 2005 — the largest gain in any 10-year period on record.”

Renters are a distinct minority in Vermont, where the home-ownership rate is above average. In fact, renters outnumber homeowners in just two cities — Burlington and Winooski — so if rent control were plausible anywhere in Vermont, those would be the likely places. City voters would have to approve a charter change, which would require legislative approval. How unlikely is that?

Burlington voters overwhelmingly rejected rent control in a special election in 1981, during Bernie Sanders’ first mayoral term. (Actually, they rejected the creation of a “fair housing commission,” which everyone agreed was a proxy for rent control.) They were influenced by a publicity campaign against the measure mounted by commercial interests.  burlingtonhouseSanders’ critics on the left complained he didn’t try very hard to see the idea through, and in fact he went on to promote affordable housing via a range of other policies.

Barring a major ground shift, rent control will remain one of those recurrent policy ideas with no traction in these parts. Like single-payer health care.

Unease Down East

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Burlington and Portland, Maine, have a few things in common. They’re the biggest cities in their states, they both pride themselves in their trendy livability (as measured by magazine rankings, food-trucks per capita, those sorts of things), they both experienced negligible development of rental housing for many years, they both worry about gentrifying neighborhoods, and they both have a housing affordability problem.

Portland’s problem might seem a bit more acute, thanks in part to a six-part series in the Portland Press Herald that elaborates on what the mayor-elect calls a “housing crisis.” portland1The themes echo other crises around the country – soaring rents (up 40 percent over the last five years), stagnant or declining incomes, middle-income renters priced out and fleeing to the burbs.

The average two-bedroom apartment in Portland, according to the newspaper, is $1,560. That’s too bad, because an apartment like that is out of reach for anyone with a housing voucher. HUD puts the fair-market rent for a two-bedroom in Portland at $1,074 – which happens to be well below Burlington’s $1,309. What’s more, landlords in Portland can capitalize on the hot rental market by charging non-refundable application fees, which their counterparts in Vermont cannot.

How Portland is going to relieve its “crisis” is an open question. The mayor-elect has appointed a committee. The city is examining municipally owned land with an eye toward potential sites for affordable housing. New developments are supposed to make some units affordable for middle-income renters, but that inclusionary policy apparently doesn’t extend to the working poor. Here, as elsewhere, the remedies seem to pale before  the problem.

The co-op alternative

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 Before Burlingtonians succumb to the blandishments of “purpose-built” student-housing developers, they might do well to consider an alternative with a long tradition of affordability: student co-op housing.

Student housing co-ops are scattered around the country. Perhaps the best known is the Berkeley Student Cooperative, which dates from 1933 and offers housing to about 1,300 students in 20 properties.  Berkeleystudentcoop1According to the co-op’s website, monthly rent is about $745 in a room and board house (compared to $1,354 in a university dorm triple) and $433 to $881 a month for single room in an apartment. (By comparison, the market rate for a one-bedroom apartment is typically over $2,000.) No wonder there are 1,000 students on the waiting list.

And yes, some of those Berkeley co-op houses have game rooms and hot tubs.

A thumbnail case for student co-ops can be found here, on the website of the North American Students of Cooperation (NASCO). Housing co-ops operate on variations of a shared-equity model. Here’s NASCO’s description of a common form:

“In a ‘Market Equity’ coop, a member joins the coop, buys a share, and lives in a unit.  This is similar to something like a condo complex, but instead of owning one condo, you own a share in the whole complex.  When you decide to leave the coop, you can sell your share at whatever the market will pay for it.”

Housing co-ops also come with shared governance, work expectations, and so on. They’re not limited to students, of course. Champlain Housing Trust has five co-ops with 81 apartment units in Burlington, with another one on the way on Bright Street.

You’ll never be faced with this choice, but it never hurts to ask: Which would you rather see on the northeast corner of North Winooski Avenue and Main Street: purpose-built student housing, with a climbing wall, or a student housing co-op without one?

 

Daunting affordability gaps

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Here’s a seat-of-the-pants calculation that shows one dimension of Burlington’s (and Vermont’s) affordability problem for renters:

According to Vermont Housing Data, Burlington has 9,596 rental units. Of the households living in them, 61 percent are paying more than 30 percent of their income for housing — the standard threshold of unaffordability. By that standard, 5,853 rental units in Burlington are unaffordable to the people who live in them.

Lake Champlain Burlington, Vermont.

(The same source reports Vermont’s rental units at 69,581. More than half the households in those units – 52.5 percent – are paying more than 30 percent. That puts the state’s unaffordable rental units at 36,530.)

Those are just the figures for the standard housing burden. In Burlington, 35.7 percent of renters are severely burdened, paying more than 50 percent of their income on housing. That works out to 3,426 rental units that, for them, are severely unaffordable (and 18,369 such units statewide).

These are unsettling numbers, and of course there’s no easy remedy or policy panacea (although doubling public funding for affordable housing and raising the minimum wage to $15 would probably help).

Inclusionary zoning – which requires a specified percentage of units in new developments to be affordable – is among the policies that can be brought to bear. For a thorough, thoughtful treatment of the subject by Rick Jacobus, a Burlington alum, click here. He points out, among other things, that “inclusionary housing is one of the few proven strategies for locating affordable housing in asset-rich neighborhoods where residents are likely to benefit from access to quality schools, public services and better jobs.” In other words, it’s fully in keeping with the renewed national emphasis on affirmatively furthering fair housing.

He also writes that “inclusionary housing has yet to reach its full potential.” That’s an understatement in Vermont — one of 13 states that has statutes authorizing inclusionary policies that virtually no municipality except Burlington has taken advantage of – and in Burlington itself, where an inclusionary ordinance has been on the books for 25 years. Over that period, the policy has resulted in only about 260 affordable units (many of them condos).

That relatively low number reflects, in part, a lag in Burlington housing development in comparison to the rest of the county. What accounts for that, and is there any way the city’s inclusionary policy could be tweaked to make it more effective? Answers to these and other questions may be a year away. The Housing Action Plan calls for hiring a consultant to review the city’s inclusionary policy and make recommendations by next fall.

At last! Housing that serves a purpose

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Thanks partly to the Burlington Housing Action Plan, which calls for housing up to 900 collegians “potentially on one to two carefully-selected downtown locations,” we’re going to be hearing a lot, over the next few years, about something called “purpose-built student housing.”

That’s because the new wave of student housing around the country is being generated by private developers on behalf of colleges and universities, as would be the case in Burlington. And what these developers say they’re putting up is “purpose-built.”  KnoxSuch as “The Knox,” in Knoxville, Tenn., near the University of Tennessee campus.

Now, you might well wonder: “Purpose-built” housing as opposed to what? Pointless housing? (Perhaps examples of the latter spring immediately to mind.)

So, what does “purpose-built” mean? Here’s the Merriam Webster definition:

Designed and built for a particular use

Like, to be lived in? As in, duh, apartment building? There must be more to it.

Students aren’t the only target of “purpose-built” developments. A cursory Google search turns up “purpose-built” developments for older people, disabled people, mixed-income people. A prime example of the latter is East Lake, a revitalized neighborhood in Atlanta that used to be a rundown public housing project.

Take note: “Purpose-built communities” and “intentional communities” are not the same thing. (“Intentional communities” as opposed to what, you might wonder. Accidental communities?)

The purpose-built phenomenon seems to be hot in Canada. Check out Mirvish Village in Toronto, which prides itself on its diversity. The website does not make it easy to discern, however, how much it costs to live there.

OK, so what’s special about “purpose-built” student housing, as distinct from a plain old privately contracted dorm? (Redstone Lofts on UVM’s campus, privately built and managed, would be an example of the latter, sort of. Nobody was describing that as “purpose-built” when it went up a few years ago.)

The amenities, apparently. knox2Roof decks, hot tubs, climbing walls, flat-screen TVs in every suite, swimming pools, those sorts of things.

Very well, let’s imagine six-story “purpose-built” student housing on the northwest corner of South Winooski Avenue and Main Street, the parking lot next to the fire station. (Presumably the climbing wall and hot tubs would be on the inside, not accessible to passers-by.) Here’s what we’d like to know:

Will the inclusionary zoning ordinance apply, and if not, how can the ordinance be amended to ensure that a decent share of these “purpose-built” units are affordable? 

Another population bubble

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Millennials become the most numerous living generation this year, outnumbering the Baby Boomers, and there’s no shortage of treatises analyzing their tastes, their world views, and their impact on the housing market. How seriously to take these generalizations, or any other thumbnail pronouncements about generations, is an open question. (For a Pew Foundation exegesis of “generations research” that finds Millennials less religious, more diverse and less conservative than their predecessors — that is, compared to Generation X, Baby Boomers and the Silents(!), click here.)

Clearly, though, people born after 1980 tend to have higher levels of student loan debt than their forebears, and fewer are buying houses as a result.Millennials1 Young renters’ student debt burdens grew after the Great Recession, even as their median incomes dropped, which left them less able to qualify for a mortgage or to save for a downpayment. A new research brief from the Harvard Joint Center for Housing Studies, “Student Loan Debt and the Housing Decisions of Young Households,” lays out the details.

Nevertheless, there are commentators who see Millennials as poised to fuel a housing boom. “Millennials are making their move in the housing market,” proclaims the Dallas Morning News, quoting real-estate industry source attributing 30 percent of home sales to Millennials.

The common notion that Millennials want to live in cities is subject to dispute. More Millennials are moving from cities to suburbs than the other way around, Census data supposedly show. A survey came out earlier this year that got plenty of attention: It had 66 percent of Millennials preferring a life in suburbs, 24 percent rural areas, and just 10 percent cities.

The survey was sponsored by the National Association of Home Builders, though — an entity that would seem to have a vested interest in promoting the single-family-home-big-yard lifestyle.

But wait. A survey closer to home suggests that many Millennials really do hanker for a single-family home with a big yard. The 2014 “Young Professional Housing Survey Report,” sponsored by the Lake Champlain Regional Chamber of Commerce, asked 400 respondents (63 percent of whom were renters) what type of residence they would most like to live in, and 82 percent said single-family detached house with a yard. And most of those wanted a big yard!millennials2

Now, to the extent that these Burlington-area Millennials prefer suburban living, they do want to live in a place that’s a short commute to work, and a place where they can walk to community services.

Still, the young cohort seems to cling to the old American dream of a low-density-neighborhood lifestyle. Hasn’t anyone told them that big yards are obsolete in the Age of Climate Change?

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.