Thursday, April 13, 2017

Reflections on Affordable Housing

I’ve begun serving on an affordable housing committee charged with crafting a plan that could result in a county wide vote raising funds to address the issue.  It’s a tricky assignment because the years are littered with ambitious plans having no access to implementation.  It’s not a problem unique to our area; it’s one confronting many places throughout the nation in  small cities like ours, metropolitan areas, and economically vibrant communities everywhere.  

Exactly what the problem is, and how to understand it, remains an unanswered question. There are many sides to it, but when connected they don’t necessarily add up to a whole.  That’s because housing, in all its forms and constituent parts, is one element in the complex web of an urban landscape flavored with cultural biases and expectations.  However, within the web are some strands that demand immediate attention.  Many people with good jobs have a hard time finding affordable housing.  It isn’t being built.  It’s not available in the existing housing market.  

Wage growth has been stagnant for several decades for nearly everyone but those at the top.  Upward economic mobility for all is no longer a cultural reality, even as it remains a cultural dream.  Growing income inequality has created conditions where developers can make a healthy profit building top end housing, no profit building for the low end, and the murky middle depends on the overall cost of living, how distant a commute can be borne, and the character of the available market.  The high cost of land in cities all but ensures that any housing built on it will be expensive to buy or rent no matter what.  Gentrification drives up returns for owners in older neighborhoods.  Like it or not, it’s what happens when the upwardly mobile seek adequate, convenient housing within their current means.  In other words, the private sector, operating on it’s own, has little incentive to build for the low and moderate income market.  There’s not much profit in it.  At the same time, the public sector’s access to financing for development of low and moderate income housing at the low end of the market continues to diminish.  Cutting domestic spending, holding down taxes, avoiding debt, and philosophical objections to public investment in housing all contribute to an environment in which public agencies are having difficulty holding onto what they have, much less adding to housing inventory.  

The broad need for housing options in-between the bottom and top end is ill defined.  Levittown developments still exist in environments of urban sprawl, but their degree of affordability is questionable.  Tacky townhouse, condo and co-op developments pop up where market conditions promise a good return.  But market conditions promising a good return are not always the same as market conditions in need of affordable housing.  From the occupants’ point of view, affordability remains a problem.   

Moreover, there seems to be little agreement about what affordable housing is, or should be.  Whatever it is, the conservative political ethos dominating the current environment in my community believes it should be the product of the private market place, with quasi-governmental assistance limited to mortgage insurance and the like.  On the income side, is it housing that a family earning 50% of area median income should be able to afford?  Should it be 60%, 100%, or maybe 25%?  If affordable, what is adequate?  Is it new, existing, up to code, or simply a bit shy of slum status.  What size is adequate?  Do large families “deserve” larger quarters?  Is a room in a boarding house adequate for a single person?  Should everyone, no matter their income, have access to adequate and affordable housing?  Answers will always involve government decision making of some kind, and that will probably reveal a role for government that goes well beyond mortgage insurance.  

When I’ve raised the question of affordable housing in social gatherings, the response almost always assumes ownership of a house on a lot with a yard, not too big, basic but adequate for a family.  It’s the post WWII American dream that created the suburban landscape of today.  It’s faltering dream in many large metropolitan areas, but it’s alive, if not well, in smaller urban areas such as the one in which I live.  Aspiring to own the house of the American dream, many are enticed into mortgages they struggle to pay for houses of marginal quality, but they give the appearance of what the good life is supposed to look like.  

What are the alternatives?  What about renting as a better option than owning?  Studies and articles have tested the waters for renting over owning, with some success, at least in bigger cities.  In my community, 37% of the adult population are renters.  Excluding the elderly in assisted living type developments, renters are mostly at the low end of the socioeconomic scale, with the subtle bias that they are not the most desirable of residents.  Living one’s life in a rented apartment is a sign of one’s inadequacy at many levels.  

With that said, what are some of the conditions particular to my community?  A recent survey produced by the National Low Income Housing Coalition shows that an hourly wage of about $20 is needed to rent an adequate two bedroom house or apartment.  The estimated mean wage for the area was about $11at the time the survey was made.  For many, making $20 requires two wage earners working two part time jobs, neither offering benefits.  Is cheaper housing available?  Yes.  Slum conditions exist and slumlords have no problem renting up.   That American dream house?  It requires two wage earners working two full time jobs with a combined income approaching $100,000.  So, yes, we have an affordable housing problem, even out here in the intermountain West, but it’s a complicated problem, and it will not be solved without government engagement in the market place.

Will the committee come up with a workable plan the community will support with higher taxes?  We shall see.


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