Tuesday, December 3, 2013

Housing Affordability at the Breaking Point

(Source: Unknown)

Despite the ravages of the 2008 housing bubble burst, and the ensuing recession, affordable housing is a tremendous problem in many parts of the US. The problem is most acute in the big, prosperous metropolitan areas with vibrant urban cores and physical constraints on outward growth, particularly New York, Boston, Washington, and my region, the San Francisco Bay Area. However, it is also an issue in pockets of many other cities in the US, particularly areas that are amenity-rich, job-rich, walkable, and well-served by transit.


It is an understatement to say that this is a huge problem. People making low wages often have to skimp on food, heating, or clothing to cover the rent. Many people are not only subjected to discomfort, but danger as they cram into illegal apartments which are bootlegged into garages and sheds without complying with safety codes. Two incomes have become nearly mandatory, precluding family arrangements where one parent can stay home with children when that is desired or necessary. Nearly everyone in high-price metros who wasn't fortunate enough to buy a home by the 1990s is affected; many people who make a respectable wage are forced to live in cramped quarters, needlessly adding stress and inconvenience to their lives. 


This baby goes for $3,500 per month in the West Village.
(Source: www.walkingwonder.blogspot.com)

Insanely high prices in centrally-located neighborhoods near jobs and services hurt the economy by pulling inordinate amounts of money out of household budgets that could go into consumer spending, by keeping recession-weary workers away from parts of the country that are recovering the best, and by keeping talent away from job openings. It pushes many people to live far from their jobs where housing is a little cheaper, adding to traffic and pollution and taking time away from spouses, children, and sleep. This also breaks up neighborhood social ties, as young people and low earners leave their friends and family behind and venture into the hinterlands to find accommodations that won't bankrupt them. 


Aaargh! I could be practicing the lute right now!
(Source: www.3.bp.blogspot.com)

Many good people are focused on the issue, trying to find solutions. Some of them, unfortunately, focus exclusively on the need for subsidized units that have below market-rate (or "BMR" in planning jargon) rents. These units are often provided via by market-rate developers (often 10% to 15%  of the units) as a condition of approval for higher-end apartment buildings which are built under "inclusionary zoning" rules. These programs have been criticized by many people as unfairly burdening landlords and with giving market-rate neighbors the duty of subsidizing those in need. 

These criticisms are interesting and may have some validity, but my problem with the hyper-focus on BMR units at the exclusion of all other solutions is this: BMR units are a woefully inadequate strategy for the magnitude of the problem. For every family that is helped by these programs, hundreds more are left out. There isn't enough gold in Fort Knox to supply subsidized BMR units for everyone who is struggling to afford a place to live. In places like San Francisco and Silicon Valley, lawyers and highly paid tech workers have a tough time finding a place that they can afford. Those at the low end of the income spectrum may always need some assistance, but when highly paid white collar professionals need help, something is seriously out of control.

This has been getting out of hand for a while, and at this point it feels to some observers that it is lost cause. It is absolutely possible to rectify the situation, though, and we must begin right now. It is a moral and economic imperative. I propose that there are six key things that we can do at the local level (without dealing with dysfunctional Federal and State agencies) that would get us on track to be where we need to be. I'll explore them each in a series of posts over the coming weeks. 


     Introduction: Housing Affordability at the Breaking Point

     Part 1: Home Is Where The Supply Is

     Part 2: Fighting Gentrification (With Luxury Housing)

     Part 3: Housing Shortage or Urbanism Shortage?

     Part 4: Do We Need Affordable Housing or Affordable Living?

     Part 5: Removing Snobbery From Codes

     Part 6: How the Get the Right Types of Homes Built in the Right Places



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