affordability - Yule Heibel on Diigo

11 Nov 08

The Housing Affordability Problem Has Not Gone Away

Excellent blog post by Donald Elliott on why and how (un)affordability is systemic, and what (little) steps municipalities can take to mitigate the problem.
QUOTE
What can local government do? It cannot solve the macro-economic problem, but it can remove barriers that drive housing prices even higher than they need to be. Minimum lot size and minimum house size requirements are two of the main culprits. Artificially low multi-family densities are another, and narrow definitions of allowable housing types are a third.
UNQUOTE

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Over the past two years, news from the housing industry has not been good.
So with prices falling, the housing affordability crisis must now be behind us – right? Wrong. In A Better Way to Zone I describe the housing affordability crisis as a structural problem of the U.S. economy and that is still true. Business cycles come and go, and this recession will in time bottom out and the housing economy will rebound. The long term effects may be a slight lowering of average housing prices – but not much, and not over the long haul. The key problem remains – the U.S. economy is simply not creating jobs that pay (on average) what it costs to build new housing (on average) and that gap continues to widen.
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- In fact, that difficult fact is what fed the desire to create sub-prime mortgages – since we could not increase average wages and we could not lower the costs of building a house, the home finance industry found a way to bridge that gap by letting less money buy more house (temporarily). The recession may narrow that the gap by deflating home sale prices and bringing them a little closer to the buying power of some households, but it doesn’t change the basic mismatch between wages and housing construction costs. And the problem will get worse, because global economic pressures will continue to push wages down and the burgeoning demand (especially from the exploding middle classes in China, India, and elsewhere) will keep driving the price of housing inputs up.
- cities are asking for broader and more powerful tools to address housing affordability.
- What can local government do? It cannot solve the macro-economic problem, but it can remove barriers that drive housing prices even higher than they need to be. Minimum lot size and minimum house size requirements are two of the main culprits. Artificially low multi-family densities are another, and narrow definitions of allowable housing types are a third.
- The simple fact is that economic pressures are going to force many American households into smaller single-family units and sometimes into multi-family housing even if they would prefer to buy something larger.
- Responsible cities will find ways and places where that can happen and will revise their zoning to allow it to happen in ways that strengthen the community. Local governments can also remove barriers to modern modular homes, co-housing, live-work products, cottage housing, and a variety of innovative smaller home options emerging to serve our aging population. Other innovative products are described in more detail in A Better Way to Zone. These are not just “quick fixes” — they can result in long-term changes in the American housing stock that responds to changing economic realities.
- The long-term housing affordability crisis is not going away, and responsible local government will use this “breather” from development pressure to rethink their approach to the issue and to re-evaluate the housing barriers embedded in their zoning and subdivision controls.

06 Oct 08

re:place Magazine

- about the importance of affordability in helping sustain diversity...

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01 Aug 08

The Bellows » NIMBYism

Ryan Avent argues a perspective against NIMBYism here, which never occurred to me before: that "the biggest problem with public involvement and development is that some of the biggest beneficiaries of new development have no seat at the table–those who’ll be living at to-be-constructed residences. Even if you bring all neighborhood stakeholders in, educate them, and get their opinion (eliminating squeaky wheel bias), you’re still not getting the views of all interested parties." He continues as follows:

"However the planning process addresses public participation, policy should begin with a pro-density bias to reflect that fact that other things equal, developments will always be less dense than is socially optimal. That’s because the people who would like to be residents of an area but aren’t benefit from development but have no political say in the matter."

Got that? In ciites, you should plan for optimal density (because that's ecologically efficient, too), but the NIMBYs will argue against density, and they will make those who want to move into the neighbourhood pay the additional cost of keeping density *below* optimal levels. As Avent puts it, "we need to determine whether the burden is on current homeowners to pay for the right to exclude additional residents, or if the burden is on non-residents to pay for the right to live there. Current policy is de facto the latter."

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the biggest problem with public involvement and development is that some of the biggest beneficiaries of new development have no seat at the table–those who’ll be living at to-be-constructed residences.
policy should begin with a pro-density bias to reflect that fact that other things equal, developments will always be less dense than is socially optimal.
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- Another way of looking at this is by asking who has the right to restrict entry to a neighborhood, and how far does that right extend. When thinking about theoretical negotiations over the terms of development, we need to determine whether the burden is on current homeowners to pay for the right to exclude additional residents, or if the burden is on non-residents to pay for the right to live there. Current policy is de facto the latter.
- But the current system is hugely inefficient, because we’re not even trying to figure out who the actual losers are, what a reasonable estimation of their losses is, what the social gains are, and so on. As such, you have projects which might potentially generate huge social benefits and considerable private benefits–to neighborhood residents, as well–derailed because a handful of very loud people shout loudly. And this costs those loud people only the time to organize and shout.
  - Oh god, how true! We see this time & time again with community associations "representing" the neighbourhoods here in Victoria. - on 2008-08-01
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19 Jul 08

The Bellows » How Good is Houston?

Ryan Avent of "The Bellows" critiques Ed Glaeser's piece for the New York Sun, which, according to The Bellows, is riddled with errors and is undermined by Glaeser's own research. Glaeser's neo-con thesis in the NY Sun article is that Houston is middle-class-friendlier and somehow more affordable due to its libertarian anti-regulationist stance, and that NYC is unaffordable because it's regulated to the nines. It's a very familiar argument in some circles, and it's interesting to see Ryan take it apart quite deftly.

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20 Feb 08

Hitting close to home on affordability - Crosscut Seattle -

Great article by Crosscut's Knute Berger on affordability/ housing costs in Seattle, with much to be gleaned for us (BC, Southern Vancouver Island, Lower Mainland), too. "You can blame many factors for the high cost of housing in Seattle, from growth management to infrastructure expansion. But we often overlook another reason: personal taste."

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Part of the demand side of the equation is, of course, growth: more people. But what is it that those people want? They want bigger houses, bigger condos, and bigger apartments. It's tough to meet density goals when the number of people per home is shrinking and the size of the homes is increasing. It means more and more people are eating up more space — and space costs more. This is a national phenomenon.
Builders respond to market demand. What is it people want?
In 1970, the average new single-family home was 1,500 square feet; in 2005, the figure swelled to 2,434 square feet — an increase of over 900 square feet.
In 1970, 36 percent of new homes were under 1,200 square feet; by 2005, only 4 percent were. In 1970, only 10 percent of homes were over 2,400 sq. feet; in 2005, 42 percent were.
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- American homes are bigger, taller, and with more amenities than the houses of old. The result: a large increase in the number of new two-story-plus homes (17 percent in 1970 vs. 55 percent in 2005), the number of bedrooms (four bedroom homes grew from 24 percent in 1970 to 39 percent in 2005), the number with 2-1/2 baths on the market has doubled, and the number of homes with two-car garages has increased from 39 percent to 64 percent — with an additional 20 percent of new homes sporting three-car garages. Size has mattered, too, in new multi-family housing, where the number of units over 1,200 square feet has doubled since 1990, from 20 percent to 43 percent.
  America could be scaling expectations to bring about a lower-cost reality. We have not. But don't blame it all on the sprawling suburbs. You can see this upsizing in Seattle neighborhoods where bungalows are being remodeled and renovated by new buyers. Often, you'll see buyers take a small, 1,000-square-foot home, expand it, add granite countertops and a professional chef kitchen, add a deck, a bunch of bathrooms and walk-in closets, and flip it for high-end resale. A perfectly habitable small home that cost cost $500,000 has now been upgraded with completely optional lifestyle amenities, and the price more than doubled.
- Another issue is the economic profile of the people who live here now. Part of the run-up in home prices has to be well-paying job generators like Microsoft and other tech enterprises that have produced so much instant wealth.

04 Feb 08

Affordable housing gap tops $1 billion (Toronto Star)

"Canada is the only major country that doesn't have a national housing strategy, the report notes." The article deals specifically with Toronto and Ontario, but most of what it argues holds for every desirable (and expensive) city (including Victoria) in Canada. This article, by Laurie Monsebraaten, is followed up by a second one from the same day; see http://www.thestar.com/News/GTA/article/299928 "The long wait for affordable places to live" by Tanya Talaga.

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Tomorrow's report card comes two weeks after Canada's largest municipalities reported that incomes are not keeping pace with the rising cost of housing and called on Ottawa to craft a national plan.
Under the 2001 federal-provincial housing deal, Ottawa agreed to spend $680 million over five years if the provinces matched the federal funds. Ottawa added $320 million in 2003 and brought the total federal-provincial funding promised to $2 billion.
But federal-provincial spending data collected by the Wellesley Institute shows that spending on housing in 2007 was roughly the same as in 2001. (This doesn't include a one-time $1.4 billion federal payment to the provinces in 2007, the result of a deal struck between the previous Paul Martin government and the NDP to ensure passage of the 2005 budget.)
"This means that, across the country, instead of a net new $2 billion in housing funding, as promised in 2001, any new housing funding has either replaced previous dollars or not even been made," the report says.
Wednesday's meeting is the first time in more than two years the housing ministers have met. Federal Human Resources Minister Monte Solberg has not yet confirmed his attendance and if he doesn't show up, it will be the first time in almost a decade that Ottawa hasn't been represented at such a gathering, Shapcott says.
During the last provincial housing ministers' meeting held outside Halifax in 2005, Ottawa and the provinces agreed to work quickly on a national federal-provincial housing strategy with goals, timetables and long-term funding.
Little has happened in the interim. As a result, all current federal housing programs are set to expire by March next year.
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- This week's meeting comes in the wake of last fall's fact-finding visit by the UN's Special Rapporteur on Adequate Housing, who called on the federal government to work with the provinces to implement and fund a comprehensive national housing strategy to meet the housing needs of Canadians.
  Canada is the only major country that doesn't have a national housing strategy, the report notes.

21 Jan 08

How to make housing affordable (The Toronto Star)

"By relying on donations from suppliers, a Brampton developer has managed to build high-quality abodes for low-income families.
(...)
When the 16-storey "Chapelview" project, on John St. in downtown Brampton, is finished next year, it will provide 200 apartments for seniors and low-income singles as well as people with disabilities, and if all goes according to plan, it will earn LEED (Leadership in Energy and Environmental Design) certification.

If he's successful, D'Angelo believes the Chapelview project, which includes a six-storey garage for municipal and tenant parking, will be the first high-rise social-housing project in North America to receive the LEED platinum rating, the highest benchmark for green building and design."

And then you wonder why this can't be done in more cities across Canada...?

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When the 16-storey "Chapelview" project, on John St. in downtown Brampton, is finished next year, it will provide 200 apartments for seniors and low-income singles as well as people with disabilities, and if all goes according to plan, it will earn LEED (Leadership in Energy and Environmental Design) certification.
If he's successful, D'Angelo believes the Chapelview project, which includes a six-storey garage for municipal and tenant parking, will be the first high-rise social-housing project in North America to receive the LEED platinum rating, the highest benchmark for green building and design.
"He's really shooting for the moon here," says Stephen Kemp of Enermodal Engineering, a sustainable-building consulting firm. "For affordable housing, it's amazing."
Just as he has done on previous housing projects, Woodbridge resident D'Angelo, 53, will ensure the cupboards are stocked with donated food when the tenants move in, and each will be given a quart of paint and a brush for future touch-ups.
D'Angelo's overall mission is to create non-profit housing of quality and comfort, with better-than-basic finishings and appliances. To achieve that end, he persuades corporate sponsors and construction trades to donate upgrades or cash. So far D'Angelo's been promised $800,000 in upgrades and donations for Chapelview and is shooting for his goal of $3.2 million.
- - amazing! Simple, but brilliant and amazing. - on 2008-01-21
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Future tenants will also have better air quality, since each apartment will be fitted with its own ventilation system, and doorways will be weatherstripped so smoke and other odours don't penetrate the hallways. Carpeting and wood flooring that out-gas minimally will be used throughout, and the appliances will be energy-efficient, as will the plumbing.
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- Meanwhile, the building's design and materials were chosen with sustainability in mind. The steel used in construction is recycled, and the concrete and drywall have recycled content. The accessible green roof and landscaping will be drought resistant, says Kemp, so they won't need to be fertilized and irrigated.
  D'Angelo is also aiming for universal accessibility in the design, which will allow people with disabilities to live in any apartment.
- Chapelview is expected to cost about $37 million, with $11 million from the feds and the province, $8.5 from the city of Brampton and about $18 million from Peel Region.
  - - interesting -- how does one leverage that kind of funding ...here, in CANADA, land of perpetual senior-level-of-government meanness? - on 2008-01-21
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- Peel Living, the region's non-profit housing company, estimates total building costs will be $2 million less than expected market costs for a comparable structure – because of D'Angelo's fundraising efforts and the efficiencies that come from his past experience.
  This isn't the first time that D'Angelo, a partner in Martinway Contracting Ltd., has broken new ground in affordable housing. He won an award from Canada Mortgage and Housing Corp. in 2004 for Millbrook Place, a 163-unit building in Mississauga that houses seniors in one- and two-bedroom apartments in one section of the building and singles, including the formerly homeless and people with mental illness, in furnished bachelors in another section.
- "That kicked off our getting back into the social-housing game," says Keith Ward, general manager of Peel Living and commissioner of human services. "We kept waiting for the government to announce more funding. It didn't happen. Now we hope there are more builders motivated by that sense of altruism."
- "Most contractors would use mid-range paint, but he wanted to use top-of-the-line," says Doug Funston of Benjamin Moore. "That's his strategy – he delivers a platinum-level product for a bronze level price."
  - - brilliant - on 2008-01-21
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- The value to the corporate donors is a higher public profile, better public relations, new connections in the community, and letters and plaques of appreciation for being good corporate citizens. "It's wonderful to get those accolades," says Funston.
- "Years ago you heard 'social housing, why put money in when people are just going to destroy it?' – I've heard that from contractors on various sites," says Brett Barnes, a corporate representative for CMHC. "John has been able to turn that around. The more they contribute to bricks and mortar, the more they also contribute to improving the lives of lower-income households."

12 Nov 07

Crosscut Seattle - Charles Royer: Do something about middle class housing prices

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Yule Heibel's Library tagged affordability → View Popular

The Housing Affordability Problem Has Not Gone Away

re:place Magazine

The Bellows » NIMBYism

The Bellows » How Good is Houston?

Hitting close to home on affordability - Crosscut Seattle -

Affordable housing gap tops $1 billion (Toronto Star)

How to make housing affordable (The Toronto Star)

Crosscut Seattle - Charles Royer: Do something about middle class housing prices

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