Chicago to add money to budget to provide tiny houses to address homelessness

The proposed Chicago budget includes money for tiny houses to fight homelessness:

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Now, under Mayor Lori Lightfoot’s 2023 budget that passed last month, the city will direct $3 million in federal COVID-19 stimulus funds toward a tiny homes project that she said will be the “first of its kind.”

Though a small fraction of the nine-figure sum the city will spend on affordable housing investments, “we must push ourselves to be creative,” Lightfoot said when she unveiled her budget. “Tiny homes are an interesting innovation that we should embrace as a city.”

Cron said that was a long-sought victory for his organization, which has watched the concept take off elsewhere in the U.S., including several in Midwestern states. He blamed the earlier resistance on “red tape” and “politics” hindering city officials from moving forward…

Upon construction, the 500-square-foot tiny homes will compose a “micro-neighborhood” on two to five city-owned lots, with an average of two to four homes per lot, Department of Housing spokesperson Eugenia Orr said in a statement to the Tribune. The housing will be long term, with heating, plumbing and other required features under the Chicago building code. The structures will not be mobile, unlike the RV homes that make up existing communities in some pockets of the Chicago area. Specific locations for the city pilot program have not been determined.

Though the project is pitched to combat homelessness, the city intends to cater to specific subpopulations such as veterans, new mothers, LGBTQ youth and high school or college students, Orr said. She also listed “nontraditional” students, young professionals and members of a “limited-equity co-op,” a homeownership program where residents buy a share of the complex and resell it in the future.

I would be interested to know how much the pilot program follows practices from other cities and makes changes for the particular program, context, and goals in Chicago.

Additionally, if this shows promise, how might it be scaled up? I imagine finding sites is difficult and these micro-neighborhoods benefit from services. Can a larger version of this put a significant dent in homelessness in Chicago or is this always a viable option among a number that are needed?

Even more broadly, does this hold promise for addressing affordable housing in Chicago? Can tiny houses provide enough units to help people have good permanent housing (and ownership, as suggested above)?

Perhaps programs like these will help unlock the potential of tiny houses. Instead of being luxury items for those who can afford it, they can provide housing for those who really need it but cannot access larger and more expensive housing.

Naperville supports affordable housing for households making $100,000-$125,000

Naperville is close to final approval for a new development on its southwest side that would include some affordable housing:

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The Naperville City Council this week gave the go-ahead for a developer to pursue an annexation agreement that would absorb the Naperville Polo Club into the city and open the door for the land to be transformed into a residential subdivision.

Mayor Steve Chirico and council members expressed support for the plan that would bring 252 single-family homes and 149 townhouses to 110 acres off 119th Street just east of Route 59. But they requested project tweaks mostly focusing on traffic flow and congestion…

Pulte plans to build four different home styles at differing price points, including a percentage of affordable housing dedicated to households earning $100,000 to $125,000 a year.

This is a follow-up to a recent post where I wondered about this being labeled as affordable housing. I would like to hear more from elected officials and city employees about how they see this serving the affordable housing needs of Naperville and the surrounding rea. Who exactly do they hope moves into such affordable housing? Why not offer cheaper housing? What does Pulte think of constructing affordable housing? There is a lot more that could be explored here but I suspect the involved parties will be happy to claim they helped provide “affordable housing” in a wealthy suburb.

Who is affordable housing in Naperville for? September 2022 edition

Two recent proposals aim to bring affordable housing to Naperville. The first project had 401 housing units and the affordable housing units within the development would be for this group:

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While the council has not adopted any measure requiring affordable housing, Pulte designed Naperville Polo Club in response to the city’s stated priorities, Whitaker said. They are committing to sell 20% of the town homes at an affordable level based on area median income, or AMI.

“Pulte will target buyers at 80-100% Naperville AMI consistent with household income targets set forth in SB Friedman’s Affordable Housing Program,” Whitaker said in the letter. “This target demographic for for-sale housing represents household incomes of approximately $100,000 to $125,000 and translates to a home purchase price below $440,000.”

With the median household income of DuPage County at over $94,000 and Will County at over $90,000 – Naperville spans both counties – this affordable housing is only accessible to people above the lower 50% of household incomes in the counties.

The second project involves affordable units set aside for two groups who need them:

It’s not often the Naperville City Council receives a standing ovation.

But it happened Tuesday after a 9-0 vote authorizing pursuit of an affordable housing project on city land southeast of the corner of 103rd Street and Route 59 on Tower Court. As part of the potential agreement for development, a minimum of 60 units would be built for seniors and for adults with intellectual or developmental disabilities.

When the vote finished, more than a dozen audience members clad in red shirts with “I (heart) affordable housing” written on them stood and cheered the decision — more than a year in the making — that paves the way for young adults with special needs to live independently.

In both cases, housing is needed.

But, what is “affordable housing” about? Is it about keeping Napreville residents in Naperville like seniors and young college graduates? Is it about providing housing that provides no threat to larger homes and higher property values? Is it about providing units to those who live and work in wealthier suburbs but cannot easily afford to live there? Is it about providing units within a region where tens of thousands need affordable housing? Is it about providing housing for those who could not otherwise live in a wealthier suburb?

The places in the United States with a housing surplus

A new analysis shows which metropolitan areas in the United States have a housing shortage or surplus:

A quick look at this map shows the biggest metro areas tend not to have a surplus while smaller regions have a higher likelihood of having a surplus. There is additional analysis showing at least a few metro areas that had a housing surplus in 2012 that did not in 2019.

While it is intriguing to see that some places have housing while others need it, the answer is not to have people in large numbers move from the housing shortage areas to those with a housing surplus. Both the rise of certain cities in recent years and the COVID-19 pandemic offered some hints of what this leads to: the effects of cities losing residents (if just temporarily) and rising housing prices in markets experiencing a lot more interested housing seekers. At the same time, as noted in the article, a national policy is difficult to imagine and/or enact.

Hopefully, by the time a similar time period passes and a new map is released, there are more metro areas with available housing.

Higher housing prices mean suburbs are less affordable, Houston edition

New data suggests residents in the Houston region have fewer cheaper housing options in the suburbs:

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The Kinder Institute and Harvard University’s Joint Center for Housing Studies released Tuesday morning their annual reports on the state of housing in the Houston area and the nation. Together, they painted a picture of a deepening divide between the prospects of current homeowners, whose equity has been buoyed by record-breaking home price appreciation, and renters, who have seen the monthly costs of buying a home rise far more quickly than wages.

The median-priced home in the suburbs of Clear Lake and Jersey Village, for example, were priced between $162,000 and $175,000 in 2011, according to the Houston Association of Realtors. They now go for $300,000 to $317,000.

“You have to go farther and farther out until you find a home that’s affordable,” explained Stephen Sherman, a researcher at the Kinder Institute. “The whole saying is drive until you qualify. We’re finding that people will have to drive even more” — a development which will have rippling implications on traffic and the way floodwaters drain…

“Suburban Houston — and new homes in suburban Houston — used to be extremely affordable,” said Lawrence Dean, the Houston regional director for Zonda, which does market research related to new home construction. Since then, the costs of land, materials and labor have all shot up. These days, it’s near impossible to build a home for less than $200,000, he explained.

This gets at three long-standing questions about suburban life:

  1. How far will people be willing to drive from the big city or other population centers in order to get a cheaper, bigger home? In some metro areas, this extends past 40 miles and multiple ring highways. If more people can work from home, more suburbanites might be willing to be further out.
  2. Even as suburbanites protect and celebrate rising housing prices, this also limits what others can purchase. Suburbanites have a long history of moving in and pulling up the gates behind them. But, even as suburban homeowners watch their personal wealth grow, others will not necessarily get the same opportunities.
  3. Is the primary plan for affordable housing in American metro regions to just keep the sprawl going? At some point, this may not be possible due to conditions – see the price jumps in construction cited above – or changing ideologies about where to live.

It would be interesting to compare this to other metropolitan areas across regions and price points.

NIMBY vs. acronym opponents

I have heard of YIMBYs but this profile of a vigorous NIMBY resident of California suggested multiple options:

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To distinguish themselves from NIMBYs, the current generation of housing activists has adopted new “back yard” variants (YIMBY, “Yes in my backyard”; PHIMBY, “Public housing in my backyard”; YIGBY, “Yes in God’s backyard”) to declare how they are for things (everything, subsidized housing, building on church parking lots) that a NIMBY presumably is not. Politicians have piled on: In California, homeowners who are used to being catered to with a host of regulatory and tax policies recently woke up to discover that their governor, Gavin Newsom, told The San Francisco Chronicle, “NIMBYism is destroying the state.”

YIMBY has the advantage of being a clear and obvious alternative to No opinions on development and housing. PHIMBY looks better spelled out but could confuse hearers about whether it is FIMBY. YIGBY sounds like a religious or spiritual version of YIGBY.

A catchy and clear acronym could help make the anti-NIMBY case but it will not be enough on its own to combat the common NIMBYism present in the United States.Even with the concerns expressed about NIMBYs, they likely have the decided advantage in numbers and sentiments across American communities. Many residents want to protect their properties, views, neighborhoods, and investments from a variety of perceived threaters. It will be on actors who have the opposite point of view than NIMBYs to push sentiment and regulation in other directions. This is not an easy task, and this is true even in a state like California that needs a lot of affordable housing.

NIMBY concerns about affordable housing even when it is not adjacent to single-family homes

A proposed project in northwest Chicago that would include some affordable housing units has raised concerns from residents…who do not live adjacent to the property:

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But the plans have not been embraced by all in the 41st Ward and its neighborhoods filled with postwar bungalows and ranch-style homes. Though the complex would be located in a far stretch of the city next to offices and hotels bordering Park Ridge, residents say they fear it will congest traffic and overcrowd schools.

John Frano, who lives about a mile away in Oriole Park, said the apartment complex will create too much bustle in a section of the city known for being more serene and spacious…

Retired Chicago police Sgt. Salvatore Reina, a longtime owner of a two-flat in Oriole Park, said he opposes the Glenstar tax break partly because it feels unfair to smaller landlords like him. He added that he worries about having to bid against the potentially lower rents in the future complex…

“These neighborhoods are not made for massive multiunit buildings,” Reina said. “When you bring more people in, other issues are going to arise with that too. Who knows what they are? Some could just be quality-of-life issues.”

While there is more at play here – the role of aldermanic prerogative and how exclusion shapes residential patterns – these are common NIMBY concerns: traffic, the effect on schools, large buildings, and how might move into the new units. At the same time, if you cannot build affordable housing units here, where can they be constructed? Even the location of affordable housing units in a building similar in size to adjacent buildings and not adjacent to single-family homes leads to such responses.

The reason I emphasize the proximity of residents is that I found when studying proposals for land or buildings from religious groups (here and here) proximity of residents to the property appeared linked to the concerns raised. Those who have purchased a home or housing unit often do not like the idea that someone wants to significantly alter the building or property next to you.

This is not the case here. Affordable housing is so undesirable in the United States for established homeowners and residents that it is difficult to construct. There are other barriers at play as well but consistent and loud opposition from residents in the community is common. They view affordable housing as a threat rather than as housing that could help local residents or workers, let alone help the larger city or region.

Looking to global examples to address housing crunches in expensive cities

Housing is a very difficult issue to address at the national level. Can the United States look to examples abroad?

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Some suggest that Japan is the model to follow. There, rental prices have largely remained flat over the last 25 years, according to data from the country’s statistics bureau. The reason is that the government controls zoning nationally and is more open to development in the number of houses it allows to be built. Just over a third of Japanese citizens rent the homes they live in, protected by a 1991 law called the Act on Land and Building Leases, which makes it difficult for landlords to end leases or prevent a tenant from extending their rental contract…

So where else should we be looking, if not to Japan, for the model to fix the broken housing market in large parts of the west? One option is Singapore, where public housing is built in specially designed communities and sold to individuals with a 99-year lease below market value. Selling on that property is highly restricted to reduce profiteering, but it can happen after five years of ownership. Nearly four in five Singaporeans live in public-sector housing, according to official statistics. “Prices can never get beyond regular working families,” says Ronald. “They have this virtuous circle, and it makes it interesting to think about the role of regulating housing.”…

Until late January 2022, housing developments in Germany were subsidized by the government below market rates for the first five years after being built. “It means tens of thousands of units every year come onto the market, keeping rental prices lower and preventing scrambles to buy a property,” he says.

A similar model exists in Austria and Switzerland, where the split is roughly 55 to 45 percent (in favor of renting in Switzerland, and owning in Austria), compared to an average European home ownership rate of 70 percent. When you get to the Austrian capital, Vienna, the home ownership rate is just 7 percent.

All of these sound like they would require some fundamental changes to housing policy in the United States. This might include:

  1. A stronger national policy. This could be through programs available everywhere or guidelines that all states and municipalities have to follow.
  2. A stronger emphasis on renting.
  3. More government involvement in the construction of housing and/or longer-term government oversight of housing units.

None of these options would be particularly popular in the United States or easy to implement. Here are quick explanations why for each option above:

  1. A national policy would come at the expense of the power of more local governmental actors. With real estate being so much about location, could a national policy truly address all of the different situations? Americans expect to be able to control or at least provide input into the use of land around them.
  2. Homeownership is ingrained in American life as part of the attainment of the American Dream. This is ensconsed in zoning policy, supported by politicians and policies for decades, and Americans can be suspicious of renters compared to homeowners. Renting is more common in some areas compared to others but it is not seen as the ideal among Americans.
  3. Public housing has never been fully supported in the United States. The government’s active role in housing is often viewed as negative unless it is supporting homeownership.

This does not mean that the housing landscape in the United States cannot change. The need for more housing and more affordable housing is acute. But, changes will likely take decades and sustained efforts.

Still a limited tiny house movement

What happened to tiny houses in recent years? Here is some discussion of the issues tiny houses face:

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“We’re still here,” says Kent Griswold, 63, who lives in Bend, Ore., and is the founder of the Tiny House Blog, which is believed to be one of the first blogs about tiny houses. “The movement hasn’t stopped growing, it’s just not in the public eye as much anymore.”…

Laubach says due to the pandemic, which has made people re-evaluate what is important, retirees, mature widows and single women are driving much of the demand today…

Griswold agrees, but says instead of just the novelty of people looking for tiny homes on wheels, which really drove the movement during the 2007-09 recession, people are looking at other ways to live small…

“Tiny homes on wheels or park models are thought of as RVs, but many jurisdictions are starting to think of them as Accessory Dwelling Units (ADUs). Still, the code problems can get frustrating for people,” says Laubach.

Arguably, the tiny house movement was not big to start with and the homes often appealed to particular people with resources.

COVID-19 and the housing affordability issues in many metropolitan regions would seem to be the conditions under which tiny houses would thrive. People want to get away from typical locations and they need cheaper spaces.

At the same time, more uncertain economic conditions might mean that people are less likely than ever to be lenient about zoning and codes. This limits where tiny houses are possible. This is, of course, a much broader issue: many communities want to protect single-family homes at all costs.

Does this mean something has to give in the future? Can people have really high property values, complain about the lack of affordable housing or housing options, and continue to restrict other housing options like tiny houses?

The tiny house movement might be small and it might work steadily but its ongoing presence is at least a reminder that other housing options are possible.

Why people do not flock to the American cities that keep showing up in the most affordable places to live

I recently saw another list of the most and least affordable metropolitan areas in the United States with a key metric of how many families in the region could purchase a home at the median price. Here are the five most affordable places:

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Home prices and incomes vary widely, and there are oases of affordability, mainly in the Rust Belt and Midwest. The top five most affordable places among metro areas with population of 500,000 or more:

Lansing, Michigan: As a result of modest home prices, 90.6 percent of all new and existing homes sold in the fall months were affordable to families earning the area’s median income of $79,100. The median home price was $155,000 in the fourth quarter of 2021, the builders’ index says.

Scranton-Wilkes Barre-Hazleton, Pennsylvania: Wages here are below national levels, but so are home prices — the median sale price was $150,000 in the fourth quarter. As a result of rock-bottom prices, 88.5 percent of all new and existing homes sold in October, November and December of 2021 were affordable to families earning the area’s median income of $70,600.

Pittsburgh: This metro area has a median family income of $84,800 and a median home price of just $166,000. As a result, 88.4 percent of homes were affordable for typical earners.

Indianapolis. This metro area has a median family income of $81,600 and a median home price of $215,000. As a result, 87.6 percent of homes were affordable for typical earners.

Akron, Ohio: With a median family income of $83,300 and a median home price of $165,000, fully 86.5 percent of homes were in reach of median-income families in the state capital.

Two features quickly stand out: the homes in these regions really are cheap (particularly when compared to local earnings) and they are all in the Midwest/Rust Belt.

Still, I have seen some version of this list many times now and I am not sure what to make of them. Why aren’t people moving to these locations?

The most obvious answers to me: it is not necessarily easy to move and these cities are perceived to have a lack of opportunities (economic, cultural, housing, etc.). American geographic mobility as a whole is down but do people actually move just for cheaper housing? What this list does is highlights that median income families can access median level housing in these five places. Get a decent job and owning a house is possible.

There are other possible answers that get more complicated:

  1. People just do not think of the Midwest/Rust Belt when thinking of places to live. Lack of opportunities, the weather, the middle of the country, a Midwestern blah-ness, etc.
  2. It is not just about a lack of opportunity; these are places seen as on the decline. Even if they are cheaper, who wants to live in a place that has already seen its best days when “growth is good” is a key marker of communities?
  3. These communities are lacking incentive campaigns to try to attract new residents.
  4. These communities may not want too many people to move in because it could drive up prices and bring in outsiders. (Yet, growth is good and many declining communities would do a lot to become a destination again.)

In sum: some American metropolitan areas are much cheaper than others, they have common characteristics, and there are a number of compelling reasons why people do not move to the places with cheaper housing.