Affordable Housing

42 thoughts on “Affordable Housing”

1. Well, like I mentioned in another post, laneway housing (where you can build a 1-2bedroom home off of your single family home alley). Low rise apartment buildings along major roadways that were previously single family homes. Making sure that any apartments have a mix of 2-3 bedrooms so you have a mix of singles, couples and families. Subsidized housing.

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2. I don’t see why it’s a non-starter. Changing zoning to allow more density might or might not cause the value of housing to go down. While density might make an area less desirable for ritzy, single-family suburban development, it increases the value of the underlying land, often by quite a bit. People wanting to put up condos and apartments are willing to pay much more for a lot than somebody putting up a house.

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   1. And even if property values decrease, what is the decision that makes the most sense long term for the types of communities that we want to have? What’s fair? What’s our vision?

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   2. The problem is that while upzoning your land increases its value, upzoning everyone else’s land decreases its value.

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3. I’ve seen these proposals get shot down over and over. Suburban homeowners refuse to allow them. I’ve seen them even shoot down middle class fancy apartments. Towns have gotten around NJ’s mandate for low-income housing by putting in tons of old age housing that won’t let anyone under 65 move in.

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   1. They get shot down here sometimes, but not always. A new one bedroom apartments now rents for about $1,000/month (in the city or the nice suburbs). That puts a lot of money behind it.

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4. Developers want to build this kind of housing. They are drooling to build this kind of housing. But voters won’t let it happen. School officials campaign against it, because they say that the old schools can’t accomodate more kids. Especially kids with special needs.

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   1. That’s another difference here. The city school district is clamoring to keep enrollment from dropping. I’ve never seen it come up for a popular vote. I think that if the city or other municipality gets too restrictive, the developers will go to the state government.

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   2. I think there are two reasons it’s gone through here. First, it’s the hippie dippy west coast. We are more open to such legislation that benefits the group rather than the individual.

      And second, the middle class can’t afford to live in Vancouver. Professionals can barely afford to live here. Families who are on paper rich because of property appreciation see their adult kids move away to affordable cities.

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   3. You do have to keep a tight rein on the developers. The lane way housing restrictions are super tight – from size to layout to materials. Maybe two or three different options.

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5. “…so they can get cheap, large homes with granite counter tops.”
   Or, a decent home in a safe neighborhood.

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   1. Around here that means taxpayers are supposed to subsidize a freeway to carry them past my house while not funding the public transit that gets me to the office and, when I’m too lazy to walk, the bar. Because freedom. Which reminds me, blocking all construction or expansion of new, limited access highways would go a long way to creating a constituency for density.

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      1. You live in the sunbelt? Did we not just have a discussion about people wanting a safe neighborhood and being blocked from them by your favorite policies? But let’s just dismiss all that and assume they are consumerist jerks who only want shiny, shiny counters, not a safe space for their kids.

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      2. Hey, we liberals living in nice cities don’t want Atlanta/Houston/Dallas style development and urban sprawl. Frankly, we think housing prices are discounted in those cities because no one wants to live there unless they have to.

         But, we do think there’s different regulation that could allow cities to reach more of their goals, and, further, that the goals of including people and economically diverse neighborhoods can make economic, environmental, and quality of life sense.

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      3. I live in the rust belt.

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      4. Then MH why is it ok to disparage people taking pay cuts to move to the sunbelt as only wanting a cheap house with granite?

         So BJ where are these economically diverse neighborhoods you claim to want? They don’t seem to exist, hence people are moving.

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      5. Because they keep coming back for visits and complaining that people are ruining the rust belt they remember from childhood by putting in new buildings.

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      6. I just drove through one today. It reminded me of what I’m missing in my own neighborhood. Mind you I live in neighborhood established in the post-war era when restrictive covenents on deeds were still permitted (though they were quickly over turned). Our neighborhood still bears those stains. The neighborhood I drove to/through, to deliver my son to a playdate with a family where all the children have hair the color of wheat, is diverse (in race and economics) and has vibrant pockets. There’s a commercial district on the busy thoroughfare, apartments ringing that street, smaller houses on smallish lots on the next streets, and bigger houses on the streets on the ridge overlooking the lake. So, there’s an ahupua’a of economic diversity sloping from a main street to the lake.

         Schools are still an issue — many wealthier people in the neighborhood still chose schools elsewhere, private or otherwise, though a few have experimented with nearby schools, which have been improving in the more recent decade.

         The placement of view properties plays a role in this diversity. Hills, ridges, and multiple bodies of water mean that the natural landscape determines property value to some extent, independently of the planned development, so I don’t know how what occasionally (but not always) works here can be translated to other locations.

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   2. Sigh. My point was simply that you can get a really nice house for $100,000 in the Atlanta area, but it’s hard to find an unrenovated one bedroom granny house for under $300,000 in the NE metro area. The people who have relocated to these sunbelt suburbs are working class to median earners who want to improve their quality of life and all that goes with it.

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      1. Yes.

         I’ve told the story before of how I househunted in the DC area in 2006-2007. I was looking for metro-accessible homes in DC, MD and VA and saw so many modest-sized nearly $500k houses in cruddy neighborhoods (a lot of them were cutely remodeled, but still). My holy grail at the time was an under or around $400k house within reasonable range of the metro. I forget when I finally despaired of the project, but the time I went to see a $399k house and discovered it faced the concrete wall of the metro right across the street or the time I went to see a small $429k (I think) house and it turned out to have a water tower looming over it in the next lot were definitely turning points. The second house was in a great neighborhood within walking distance of the downtown Rockville metro station and probably about five minutes walk from a fantastic public elementary school (Title 1, for some reason). Also, our first two years in the area, my husband had a commute from end-of-the line MD into DC, and it was 15 minute walk to the metro, 30 minutes on the metro, then either walk 35 minutes or wait for shuttle bus and then ride–it worked out to about 1 hour 15-30 minutes. That commute was such a pain.

         These days, my husband can walk to work (kinda hot this time of year, though!), it’s about a 5 minute drive to the kids’ school, and our house (which is ridiculously large, but we bought primarily it for location) is about half as expensive as the houses I used to look at in the DC metro area. 90% of our normal destinations are within a 20 minute drive.

         I believe that in our area, middle class houses start around $100k (there’s a lot of city housing stock that’s substantially cheaper but not middle class) and upper middle class hits around $200k.

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   3. Yes.

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6. Make it happen at the statewide level. States can enact massive property tax increases on communities that have a dearth of affordable housing for working families, and then use that “luxury property tax surcharge” or whatever you want to call it, as a source of grant money to subsidize construction of affordable housing.

   See, at the policy wonk level, “affordable housing” means “government-owned housing projects for people who meet the federal definition of poverty.” That’s not the bulk of people who are having a hard time finding housing they can afford. The working poor aren’t officially “poor” under federal guidelines—they just poor under the practical guidelines of juggling bills in a desperate attempt to make ends meet. Granite countertops are their least concern. Working class and lower middle class folks are feeling the crunch too—they might be able to find affordable house payments or rent, but then spend astronomical amounts on gasoline because they live so far from work, and spend more on utilities than their upper middle class counterparts because their older housing stock is incredibly expensive in terms of energy efficiency, and they’re too tapped out (and their jobs too insecure) to make the (again, quite expensive) energy efficient renovations.

   Frame it as a people problem and you’ll get nowhere. The UMC has all the compassion of Voldemort. Frame it instead as an environmental issue.

   At the national level, the feds used the weight of highway funding to force states to raise the drinking age. Something similar could be done to force a reasonable proportion of affordable owner-occupied housing for working poor, working class, and lower middle class people under the age of 65. Frame it as a transportation issue, an environmental issue, a national security issue, whatever—just don’t mention that it will benefit lower earners, or you’re sunk.

   or……just carry on as-is, and the problem will eventually solve itself via a non-peaceful manner.

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   1. That’s how it was sold here on the west coast – as an environmental issue. Higher density = more bike/transit users = better for the environment.

      And you are correct in stating that people equate affordability with lower than working class. Here it’s doctors and lawyers with kids living in tiny apartments and basement suites. Working class folk have few chances to live in the city.

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      1. As the economy continues its free-fall in Illinois, how this works out is the commuting range gets longer. As in, people my age aren’t up to starting over from scratch and increasing their housing costs this late in life by moving, so when jobs are lost, they just spend a hour or two on the highway—and not in gridlock, either. Distance driving. Carlinville, Illinois (google it) is now recognized as a commuting suburb to St. Louis—because who the hell are people in Carlinville going to sell their house to? It’s easier to get the job in St. Louis, and spend the next 10 years or so behind the wheel for 2 1/2 hours a day. Same when the prison closed in Dwight (again, google is your friend)—people in their late forties aren’t going to pick up stakes and move to Chicago when they’re trying to get their kids raised and out of the house; they just bite the bullet and drive a lot. Eventually, those communities will age out of the workforce and disappear, but in the meanwhile housing costs are driving up the rate of global warming. We socialize costs and individualize solutions. When you’re priced out of the “green” solution (living close to work), you just write it off—let those who can afford it worry about it. Choices are for people with money.

         Nobody gives a shit about the people in those communities. Perhaps they’ll give a shit about the impact it’s having when the fallout affects them. Economies don’t trickle down. Problems do trickle up.

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   2. Frame it as a people problem and you’ll get nowhere. The UMC has all the compassion of Voldemort. Frame it instead as an environmental issue.

      Bingo. I’d never heard it expressed this way before, but now that you say it, I think that that framing is exactly what’s (partially) succeeding here in Austin.

      We live about 8 miles north of the state capitol/city center, in an 1960’s era SFH development which (thanks to sprawl) is within a few yards of the population center of the city. Half a mile north of us is a few square miles of warehouses, WW2-era research labs, 1960s-era factories, and dead malls from the 1980s. The city plans to settle 70,000 people there over the next few years, and is making a lot of progress with a rail station and a brownfield VMU development. I’m pretty confident that the “infill” plan will succeed, and am observing similar infill work downtown, where old warehouses have been replaced by luxury high-rises in the last 5-10 years. (The tallest five buildings in town are all residential, all built in the last half-dozen years.)

      But was the infill sold on the basis of expanding housing capacity? On relieving gentrification pressure on historically African-American or Latino neighborhoods? On affordability? No. It’s all “smart growth” designed to decrease sprawl. The driving anti-sprawl slogans revolve either around preserving aquifers (particularly the one that feeds the springs for an iconic swimming hole) or around “not becoming Dallas”.

      The thing is, it may be working. Building thousands of luxury condos within walking distance of Whole Foods world headquarters has relieved some of the pressure on workng-class neighborhoods in East Austin. (Prices there are still going up, but with 110 people moving to Austin per day, it may be unavoidable.) If token environmentalism and regional snobbery can be harnessed to create more affordable housing for everyone, I’m okay with that.

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7. I don’t think Paul Krugman was arguing in favor of de-regulation, but in favor of different regulation, regulation that increases the development of higher density housing in areas outside central NY City.

   We’re also seeing the development of “market-rate” housing in our west coast city. In the two blocks of my street, we’ve seen subdivision of 2 lots, lots that were bigger than average for the street, into 5 lots, smaller than average for the street. I’m not going to argue that these houses are “market-rate” — they’re in a prime area with significant views (views are a big deal here). But, further down the road, closer to more major streets, we’ve also seen some apartment developments in the last decade. There was opposition to those developments, but in the end, the opposition lost out, over the power of the developers, the land owners, people who might live there (the properties are market rate, meaning, median income affordable, and median income people are not totally without political power), and people who might like large yards, but also oppose residential segregation.

   I’d class myself as the last group. I am not immune to personal interest. I have a nice house with big views on a street with single family houses, less than moderate traffic, the ability to park on my street with no difficulty, and fairly low crime. I want all those things, and I would fight to keep them. But, I also want the neighborhood (if not my street) accessible to more people than those who can afford my street. I want my view to keep out the car shop in the drive way, but not the person who I worry might operate a car shop. So I support up-zoning on my street and in my neighborhood. I do not think it’s impossible to find a balance, and people do.

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8. The scenario I’m describing in our city, the coalition that supports higher density housing, is less likely to be pegged together in a “little democracy.” The closest example in our area that I can think of is an island community, with larger lots and zoning that controls development. But, this community didn’t pass its last school levy; it’s population is aging, but, ultimately a community (especially one on an island) survives by its commitment to its schools, unless it’s on the way to being a retirement community.

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9. Honestly, I have seen these proposals get shot down so many times that I have all the speeches memorized by heart. I once tried to push my last town toward creating a more urban downtown. I even sent the town council links to the articles on that topic. I was quickly dismissed. I had other political fish to fry, so I let that issue drop.

   Another reasons locals won’t increase affordable housing is the ranking of the schools. They are deathly afraid that by opening up their town, they’ll bring in kids who have low test scores, which will screw up the school rankings and then screw up the property value. There are a few that are racist, but most are too smart to say anything like that. It’s mostly about fears of lowering property value, changing the schools, increase in traffic congestion, and change to a historic image of the town.

   It won’t happen at the state level either, because local people vote for state representatives. Most home owners will refuse to jeapardize their interests by voting for low income housing reform in their backyard. Even the super liberal ones will like the idea in another town, just not in theirs. NIMBY.

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   1. Ahhh…the “school test scores”. The solution to that is desegregate schools on income as well as race.

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      1. Lansing has some nice, charming neighborhoods (and some that are not so nice) with older, more affordable homes, but Lansing also has terrible school test scores. The suburbs have some of the highest ranking schools in the state. If you’ve got kids and can afford it, you buy in the suburbs. If you live in Lansing, and can afford the time and effort to drive your kids to the suburbs everyday, you hope to get in to the suburb schools through the ‘school of choice’ program. The result is very stark income segregation.

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      2. Doesn’t that just mean that middle class families will run faster and run farther?

         Even in communist countries, there were always schools that were nicer than other schools. (My husband went to a very nice one in Warsaw in the late 70s/early 80s–it had lots of embassy kids.)

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      3. Doesn’t that just mean that middle class families will run faster and run farther?

         Some will, but most will run out of money. Desegregating by economics as well as race would be huge—and would lower housing prices (which are artificially inflated not by the quality of the countertops, but by the segregation of the schools). Only the very top rung of the middle class would be able to afford running. Average middle class professionals would have to suck it up and make do.

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10. How does Krugman propose we go about “making housing in dense, high-wage metropolitan areas more affordable”? The housing story varies by region, but it was the New York Times demographic—white, middle-to-upper-middle class, well educated and credentialed professionals—who went on a real-estate feeding frenzy in cities like Washington, D.C., causing prices to soar. Here, crappy houses in slummy neighborhoods that sold for $120,000 a decade ago are now worth $600,000 or more. In D.C., it’s too late to start talking about “affordable housing.” The affluent home-buyers who turned real estate into an obsession bear a good share of the blame for that.

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11. Cost of living in different parts of the country. Real value of $100 in each state: http://taxfoundation.org/blog/real-value-100-each-state

    Real value of $100 in metropolitan areas: http://taxfoundation.org/blog/real-value-100-metropolitan-areas

    It’s not solely cost of housing. It’s taxes. Taxes, and the value received by the middle class for their taxes.

    Look at this chart on in-state tuition across the country: http://www.quickanded.com/2014/08/college-cost-in-state-tuitions-low-but-what-will-grads-be-paid.html

    The states which are the most expensive for the middle class are predictable. It’s not the size of the lawn; it’s the quality of life. You may earn more in New York City, but if $100 is equivalent to $80 for you, while your cousin in San Antonio’s $100 is equivalent to $106, it seems foolish to stay. I really don’t think that building more housing will reverse that.

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    1. I am anonymous. Typing failure.

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    2. Taxes are a big deal.

       A friend of mine moved to Austin from the SF Bay area in 2005. He’d done research on housing costs and the cost of living, so he accepted a job offer for around 10% less than he was making in California, believing that he’d still be ahead. When he got his first paycheck, he was shocked. Because Texas has no state income tax, his take-home pay was as much as it had been back in California. Since he was correct about his calculations of the cost of living difference, he was grinning from ear to ear.

       Of course, while the effect of differences in taxation is pretty unarguable, it’s not the only variable. Rick Perry made a lot of Texas’s policies with regard to taxation in the last presidential campaign. And he was right: the Texas model of low taxes, medium services can work very well. However, there were a couple of prerequisites he neglected to mention:
       Step 1: Through a fluke of history, make sure your state government owns all public lands in your state.
       Step 2: Strike oil under virtually all of those lands and fund the government through mineral leases and severance taxes.

       And that is how you have citizens paying Mississippi tax rates without Mississippi-quality schools, and services. It’s a model that works, but might not apply to any state that isn’t Texas. (Alaska’s model works too, and is just as inapplicable.)

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       1. The TX property taxes are actually pretty high. We pay around 2% a year. As I recall, when I was looking at new houses in Rockville, MD about 12 years ago, the property taxes were 1%. Hence, the taxes on the houses I was looking at in MD were actually very similar to our current house, despite it having half the value.

          The sales tax in TX is very similar to what you see in a lot of other states.

          One unusual feature of the tax code, though, is that there’s a tax on business assets (there’s something similar in WA, I believe). I can’t seem to find a quick explanation, but the equipment that you can normally write off on federal taxes as a business expense is taxed under Texas law, which is pretty perverse. I expect that established businesses do OK, but it’s got to be murder on new businesses to be taxed on their equipment when they don’t have any profits yet, especially if it’s a capital intensive new business. Knowing that, it’s kind of surprising that TX does as well as it does economically, but I guess it’s like the joke about the two hikers and the bear–you just need to run faster than the other hiker.

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12. This recent NYT collection of charts is apropos: http://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html?abt=0002&abg=0

    Skimming it, it seems in most states, more than 50% of people remain in their state of birth.

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13. I love interactive graphs. Hadn’t explored all those graphs at the NY Times site. The interaction between the proportion of people born in a state who stayed, and the proportion of those in currently live in state who were born there is interesting. Wyoming, North and South Dakota seem to be states people leave, but they are also states people come to. My state of origin (not birth, so presumably I’m not included in the graphs) and my state of residence have identical proportions of people who stay.

    And a whopping 82% of Texans stay in the state (though its size probably plays a role).

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    1. Yes–I expect size does play a role.

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14. Forgive my emphasis on college; it’s our hobby for the next few years. Nevertheless, it would be interesting to compare the NYT list with this list of “students attending own state schools:” http://www.thecollegesolution.com/the-states-where-college-students-stay-close-to-home/.

    87% of students in Texas remain in-state for college.

    I think the current fad among state governments for cutting support to state colleges is short sighted. A young adult is likely to remain in or near his college’s state. So not supporting the local college system encourages the brightest children of the rising generation to take their energy, ideas, and future families out of state. That makes absolutely no sense.

    Rather than making sweetheart deals with developers, make it possible for students to remain in state. Don’t artificially cap their numbers to make space for “full-pay” out of state and international students.

    As for real estate, even high cost states have regions which are much more affordable. Encourage the growth of small cities away from the huge metropoli, perhaps by setting up whole-city open, high speed wifi.

    Don’t support pro sports teams with financial help for stadiums; support towns away from the action with safe neighborhoods, good schools, and reliable internet.

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15. I lived in Houston from 1992 to 1998 and find what Ed Glaeser writes about that city’s housing policy to match my experience pretty well. Houston’s a great place to live, but you wouldn’t want to visit there.

    There’s no zoning at all, so anyone can build whatever they want on property they own, making a pretty good test-case for deregulation. However, that’s not the only variable, since the city is surrounded by endless coastal plains with an excellent highway system, so there are no natural geographic limits on development. In addition, nearly the entire metropolitan area is part of the City of Houston, so suburban commuters for the most part pay taxes into the same municipal and school tax pools as inner-city residents, using the same services (modulo the differences between neighborhood schools). Commutes can be bad, but with 6 or more mini-downtowns scattered around the metro area, they are fairly well distributed — with planning or luck, you can avoid spending more than 20 minutes in traffic.

    The low cost of real estate has some strange cultural effects. Outdoor activities like biking or running are less appealing because of the car-centered nature of the city. On the other hand, the restaurant scene is amazing because of low rents — we are astonished how empty our favorite restaurants are when we return, as the same ratio of full/empty tables would spell closure here in Austin. Of course, the culture is also heavily shaped by oil, making the town a particular kind of blue-collar paradise. (You can host a $100/person dinner for your friends without being literate enough to read a menu, and off-shore fishing and recreational agriculture are within the reach of nearly anyone who fancies them.)

    I don’t know what prices are nowadays, but back in the mid 90’s we’d drive around the Heights neighborhood (centrally located, “inside the loop”) and drool over the 3000+ sqft Victorian homes for sale at 40-50K. Visiting around 2000, our friends pointed to a renovated one of these which a flipper had put on the market for $160K with absolute astonishment. (We’d just bought an unrenovated 1963 house in a much less desirable neighborhood of Austin for only slightly less than that, so our jealous response surprised them.)

    So how did Houston achieve the deregulation which I’d argue has been a big part of its affordability? Did the citizens adopt the no-zoning policy because of altruistic concern for working families or desire to experiment with a libertarian Utopia?

    No. Houston had used zoning to enforce de jure segregation, and was never able to adopt a satisfactory new zoning plan post-integration. It took extraordinary, external forces to abolish zoning in Houston. This unfortunately doesn’t suggest much of a way forward for cities ruled by incumbent gerontocracies to deregulate themselves.

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