Tag Archives: affordable housing

Want more affordable housing? Build more pre-fab homes and trailer parks

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Affordable housing can be cheaply provided by building more manufactured homes:

“The manufactured home is probably the most cost-effective way to provide quality affordable housing,” said Donna M. Blaze, the CEO of the Affordable Housing Alliance, which helped provide manufactured homes for Sandy refugees. “Most of our new units are light years ahead of the apartments for rent in today’s market.”

The average sales price for a manufactured home in 2013 was $64,000, according to the Census Bureau, while the average sales price for a single-family home was $324,000. The single-family site-built home includes the land, though, while owners of manufactured homes often have to still grapple with landlords and leasing issues. But the structure itself is nevertheless significantly cheaper: New manufactured homes cost around $43 per square foot; site-built homes cost $93 per square foot…

There are currently about 18 million Americans living in manufactured homes, and the houses make up the largest stock of unsubsidized housing in the country, according to the Manufactured Housing Institute. That is becoming more important as government budgets shrink and Americans prioritize other policy areas over public spending on subsidized housing…

But there are actually fewer of these homes being built than there were two decades ago. While manufactured home builders shipped more than 200,000 units a year through the 1980s and 1990s, last year there was demand for a fraction of that amount, just 60,000, according to the Manufactured Housing Institute.

From one end of the housing market – luxury in NYC – to another. I can only imagine the response in some communities if this is the kind of affordable housing proposed. It is already difficult for many middle- or upper-class communities to promote affordable housing without also having to combat the (unreasonable) stigma of manufactured housing. So even while these homes might be quite cheap, where exactly can they be put?

 

Do you want a “McMansion of Micro-Houses”?

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A new 900-square foot home in New Haven, Connecticut drew some conflicting reviews:

A micro-home debuted in town, a possible solution to New Haven’s pressing absence of affordable housing.

The three-floor, 900-square-foot ski chalet-looking home on a fine elegantly landscaped setback on Scranton Street in West River received generally rave reviews at the debut Thursday afternoon. It also drew a critique: That it’s still too large, too expensive, not a cool enough interior or replicable enough, yet a fine experiment and first step.

That critique came from the guy whose idea the house was. He called it the “McMansion of micro-houses.”…

The house was designed and built by first-year Yale School of Architecture students such as Katie Stege (pictured with her teacher Avi Forman) as part of their required coursework. The work is done under the Jim Vlock First-Year Building Project.

The home – which features some interesting design – is going for $155,000.

The general idea of the new house makes sense: the goal is to build relatively cheap new housing in New Haven yet this home is a bit too big and expensive to fit that bill. But, pairing the negative term McMansion with ideas that are generally lauded – affordable housing and micro-homes – is an odd approach, particularly coming from the funder of the project. It is like saying, “Thank you to the professors and students for the efforts but this home is like the poorly-constructed, overly-large mass produced suburban tract homes built across America.” If you are trying to build good affordable housing that the public will accept, it would behoove you to not apply the McMansion label to it.

San Francisco the country’s “largest gated community” because of limits on development

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San Francisco is an expensive place to live and as one writer argues, this is due to intentional housing policies:

Or consider San Francisco, one of the least-affordable major cities in the United States. San Francisco’s population is about 825,000. If it had the same population density as my hometown, New York City, it would instead have a population of 1.2 million. Note that I’m referring to the population density of all five boroughs of New York City, including suburban Staten Island and the low-rise outer reaches of Brooklyn, Queens, and the Bronx. A San Francisco of 1.2 million would not be a Blade Runner–style dystopia in which mole people were forced to live cheek-by-jowl in blighted tenements. San Francisco at 1.2 million people would still be only half as dense as Paris, a city that is hardly a Dickensian nightmare.

One of the many benefits of allowing for more housing in a city like San Francisco is that it would likely lead to sharp reductions in carbon emissions. San Francisco is among the greenest cities in the United States, thanks largely to its superb climate. The same goes for San Diego, San Jose, and Los Angeles. The economists Edward Glaeser and Matthew Kahn have estimated that a San Francisco household spends one-fourth as much on electricity as a comparable household in Houston, as coastal Californians have far less need for air conditioning. To be sure, California does face serious environmental challenges. For example, that California’s water resources are stretched thin. But redirecting water resources from agricultural to residential uses would make an enormous difference, as would pricing water resources more intelligently. The environmental upside of supersizing San Francisco and other coastal California cities far outweighs the downside.

So what exactly is the problem? Well, the idea of a much denser San Francisco strikes many residents as appalling, not least because they fear that new development would threaten the city’s distinctive architectural character and the gorgeous views afforded by its stringent land-use regulations. While I love quirky Victorian houses as much as the next bobo, aesthetic considerations can’t justify the fact that San Francisco has become an oversize gated community. Rents in San Francisco are three times the national average, and they are rising at a fearsome clip. The housing crisis is even more severe in booming Silicon Valley, where the housing stock has barely increased over the last decade, despite the fact that the region has become a magnet for tech professionals from around the world. When skyrocketing demand meets stagnant supply, the predictable consequence is that housing costs soar and low- and middle-income families find themselves displaced…

In The Gated City, Ryan Avent observed that high housing costs in America’s most productive cities had forced large numbers of middle- and low-income households to either accept long, costly commutes, which eat into the ability of families to work and save, or to move to low-cost, low-productivity regions. Over time, this greatly impairs the ability of working- and middle-class Americans to climb the economic ladder. Moreover, when you move large numbers of people from high-productivity, high-wage regions to low-productivity, low-wage regions, you lower the productivity of the entire country. In other words, the rich homeowners who are fighting development in San Francisco and throughout coastal California are actually making America poorer. That’s not cool.

Thus, a gated community with economic gates rather than physical structures intended to keep people out. This is a similar story to that of many suburbs where exclusionary zoning practices intentionally limit development and push up prices to guarantee only certain kind of people can live there. Nothing is done explicitly in the name of class or race but an ongoing set of policies ensures housing availability only for some people.

The irony here is that this is notable in San Francisco, a city many might think would be attuned to these issues. This is also lurking behind the recent animosity between the buses sent by tech companies to take their employees to work and local residents. Yet, these concerns plague many important cities whether labeled with the terms gentrification or affordable housing or right to the city: how to balance or adjudicate the interests of powerful corporations, residents, and politicians versus those of average residents who are just trying to get by?

Micro-housing that is too expensive to solve the problems of affordable and sustainable housing

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Micro-housing may lead to some cool design opportunities but it may not solve important problems: providing more affordable and sustainable housing.

Which is, of course, the problem with zeroHouse: Nobody needs micro-housing in places where plots of prairie, mountain, and sea (!) are available in plenty.

Now, the zeroHouse might not be designed for the urban dweller at all. Several of the home’s signature features seem as though they’re meant for another type of buyer altogether. The design specs note that the house is entirely secure, with tempered “Sentry-Glass” windows, Kevlar-reinforced doors, and fully mortised locking systems. (Shocking that a house that looks like a Transformer could double as a bunker!)

Given the design features, land-parcel requirements, and other aspects of the building’s design—it can go into an energy-conserving “hibernation” mode for extended period of times—zeroHouse sounds like it might be better suited for Cliven Bundy country than for downtown infill construction. But then, that Manhattan Micro-Loft isn’t a much better model for addressing the lack of affordable housing in major U.S. cities.

I don’t mean to pick on Specht Harpman Architects, a New York- and Austin-based firm that’s mostly in the business of designing interiors and elegant single-family homes. Tiny-house offenders are everywhere, from the pages of any shelter magazine to the real-estate section of the New York Times, where per-square-foot costs and land allotments are out of sync with what (say) most New Yorkers need from micro-housing.

From what I’ve seen, much of the interest in tiny houses is driven by two market segments: (1) architects, designers, and other creative types who relish a new puzzle (how do you fit a lot of desirable features into a smaller amount of space) and (2) “downshifters” (to borrow a term from sociologist Juliet Schor), people deliberately trying to limit their consumption by limiting their living space as well as how much stuff they can accumulate.

Of course, there are some interested in micro-housing for its ability to address affordable housing and sustainability issues but several things still hold the micro-housing market back: zoning issues, a lack of large-scale building of these units thus far which would make them appear more normal and more practical to build with economies of scale, and price points that may not be cheap enough for the affordable market.

Manhattan population increasing, affordable housing decreasing

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One of the wealthiest areas of the world continues to see a decrease in affordable housing and the population keeps going up:

The latest estimates put the population at more than 1.6 million people, up slightly from the 2010 census.

According to NYU’s Furman Center, in the last year alone, Manhattan lost nearly 3,000 rent-regulated apartments…

In many cases, those stabilized, often affordable homes are being replaced by “market rate” units.

From 2002 to 2012, the number of stabilized or controlled apartments in the borough plunged more than 19 percent. The number of “market” rate and ultimately significantly more expensive apartments soared more than 19 percent…

Nearly 29 percent of the borough’s population is foreign born, but experts say the wave of change could drive that number down even in traditionally immigrant neighborhoods.

“It doesn’t happen all at once; what happens is that neighborhoods change in pieces,” says City College of New York Sociology Professor William Helmreich.

The wealth flowing through Manhattan is incredible so it is little surprise that real estate prices are going up. This isn’t a phenomenon limited to Manhattan: the ultra-wealthy are developing and buying real estate in numerous big cities like London and Miami. The bigger issue is what happens to these cities. Do they become primarily the province of the wealthy or is there still space for average residents and immigrants? This discussion or struggle has been illustrated in recent years in San Francisco where actions by tech companies to bus employees to Silicon Valley has been met with resistance. The answers are not easy as many politicians need to keep and attract the jobs and wealth that help keep the city coffers full as well as look attractive to other firms. In other words, it is hard to fight growth machines.

Sociologist suggests three strategies for combating rural decline

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A sociologist suggests rural communities can pursue three strategies to help them thrive in future decades:

Winchester, a sociologist and analyst of demographic changes, for years has battled against the narrative of rural decline. He argues although the percentage of Americans living in rural areas has been declining, contrary to some notions, the number of rural Americans has been rising, at least until very recently…

One is immigration. Any number of communities have seen school enrollments grow and Main Streets prosper and parks fill again with kids with the arrival of immigrants.

A second is to hang on to new retirees, particularly by paying attention to their housing needs.

Rural boomers want townhomes and condos and apartments just like urban counterparts. If those desires aren’t satisfied, they’ll move and take their Social Security payments out of the community. Those federal transfer payments amount to a fifth of the income in many rural communities, Winchester said, far surpassing the importance of agriculture.

And related to the boomers’ housing needs is an opportunity to appeal to the millennial generation. Winchester thinks housing will become more available in rural areas as boomers move, providing in turn affordable housing for young people priced out of the urban market.

This would seem to capitalize on three potential areas of growth. However, I imagine these factors are related to other factors that might be more difficult to find in rural areas:

1. A broad range of good-paying jobs.

2. A broad range of amenities and businesses.

3. A relative lack of social services.

4. A relative lack of walkability or public transportation options.

Yet, rural communities have the potential to try some new strategies. As Robert Wuthnow noted, small towns are not dead just yet.

Those with above-average economic power can’t help but be gentrifiers?

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One public policy student suggests it is really hard for those with economic advantages to avoid being gentrifiers, even when they don’t move into up-and-coming urban neighborhoods:

But it’s worse than that: it doesn’t even matter where you live. Moving to a higher-income neighborhood – one where market and regulatory forces have already pushed out the low-income – means you’re helping to sustain the high cost of living there, and therefore helping to keep the area segregated. You’re also forcing lower-income college graduates to move to more economically marginal areas, where they in turn will push out people with even less purchasing power. You can’t escape the role you play in displacement any more than a white person can escape their whiteness, because those are both subject to systemic processes that have created your relevant status and assigned its consequences. Among the classes, there is no division between “gentrifiers” and “non-gentrifiers.” If you live in a city, you don’t get to opt out.

The upshot here is not that we should all descend into nihilistic real estate hedonism. But we need to recognize what’s really going on: that what we call “gentrification” these days is only one facet of the much larger issue of economic segregation. That people get priced out of the places they already live in is only half of the problem. The other half, which affects an order of magnitude more people, is that people can’t move to the neighborhoods to which they’d like to move, and are stuck in places with worse schools, more crime, and inferior access to jobs and amenities like grocery stores. That problem is easier to ignore for a variety of reasons, but it’s no less of a disaster.

And all this, in turn, is the result of a curiously dysfunctional housing system – one that’s set up to allow market forces to push up prices without regard for people who might be excluded, and to prevent market forces from building more homes and mitigating that exclusion.

The emphasis here is on the system: people with more economic resources have more opportunities to move where they want and the capital tends to be or go where they go. A few other thoughts:

1. This reminds me of the book Colored Property which argues a key shift took place in the 1950s and 1960s as white homeowners started arguing for their economic, rather than race-based, rights. Thus, buying a nice home in a nice white neighborhood wasn’t about avoiding blacks or other minorities; it was about taking advantage of one’s own hard work and protecting one’s property values. These are the same justifications underlying the system today: people with more resources argue they should be able to move to nice places and have nice amenities. But, this comes at the expense of fewer resources in other places.

2. Students often ask me what they can do about issues of poverty and social injustice. I try to inform them about these systems as well as tell them that one of the bigger choices they will have to make after graduating is choosing where they live. Should they as relatively wealthy Americans with cultural capital simply chase nice amenities, high property values, and a secure and high-paying job overall? Or, could they choose to contribute to and learn from other kinds of places?

Rare: urban Millennial claims to miss the suburbs

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This is not a piece from The Onion but rather a story at Atlantic Cities: a Millennial discusses why she thinks the grass may be greener in the suburbs.

I’m one of the thousands of Millennials who make up this new urban demographic. I left the comforts of Eden Prairie, Minnesota — a suburb of the Twin Cities and a community that has consistently been ranked one of the best small towns in America — for New York City. And while my move to New York was the right decision for a variety of reasons (or so I keep telling myself), I often wonder if the grass might indeed be greener—both literally and figuratively—had I stayed in the suburbs.While we’re on the subject, let’s talk about green space. Multiple studies have tracked the social, cultural, and emotional assets green spaces bring to a community, including mental health benefits and reduced rates of gun violence. While cities such as New York and Philadelphia have made tremendous gains in creating new and better public spaces in recent years — former New York City Mayor Michael Bloomberg presided over the biggest program of park building since the 1930s — too many urban communities are still “park deserts” compared to their suburban counterparts.

Another area where suburbs often trump cities is in the quality (or lack thereof) of their public schools. From the mass closing of public schools in Chicago to the “dizzying, byzantine system” eighth grade students and their parents go through to select a public high school in New York City, it is as hard as ever—if not harder—for parents to find quality public education for their children in large American cities. And this particular reality seems especially stubborn: students from suburban communities are more likely to graduate high school and go on to higher education than their urban counterparts, which of course in turn makes them more likely to get well-paying jobs as adults.

But the number one way the suburbs beat the city, especially for young people, is in affordability. After living in both Washington, D.C., and New York City, I can safely say that affording basic human necessities, such as shelter and sustenance—not to mention having a little fun here and there—is much cheaper outside of the city center. When paying $1,000 per month to share an apartment is a “good deal,” and when you don’t think twice about spending $14 for a single cocktail, what chance does a young city dweller have to actually save money? Not all cities are as insanely expensive as Washington and New York (Philly! Baltimore! Portland!), but when the mortgage on a spacious, four-bedroom home rivals the monthly rent of a cramped one-bedroom apartment, there really is no competition.

These are common arguments for the suburbs through American history back to the founding of some of the earliest suburbs in the mid-1800s: they provide green space and more nature, the ability to avoid “urban issues” like underperforming schools, and affordable housing compared to dense cities.

I have to wonder if her perspective is skewed just a little bit by growing up in Eden Prairie. As she notes, this is a community often marked as one of the nicer American suburbs. Not all suburbs are like this as they range from inner-ring suburbs adjacent to big cities to industrial suburbs to edge cities with lots of jobs to more exurban areas with bigger lots. Not all suburbs would have these three traits she claims are most important and others may offer features she does not discuss. On the whole, her arguments about the merits of the suburbs may be marked by a particular higher-end experience of American suburbs.

In first half of 2013, roughly 20% of Chicago area home purchases by institutional investors

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A good portion of the homebuying activity in the Chicago region during the first half of 2013 was driven by institutional investors:

Chicago home prices climbed 11 percent in November from a year earlier, the biggest jump in almost a quarter century, according to S&P/Case-Shiller data. While gains are slowing across the country, the Windy City was one of nine areas in the group’s 20-city index to show a year-over-year increase in housing values…

Institutional investors, led by companies such as Blackstone’s Invitation Homes and American Homes 4 Rent (AMH), have bought as many as 200,000 U.S. properties in the last two years, taking advantage of real estate prices that fell as much as a third from the 2006 peak, and rising demand for rentals among Americans who lost their houses in the foreclosure crisis. Their reach has stretched from the hard-hit regions of California to small Ohio towns to the sprawling suburbs of Atlanta…

In Chicago, investors accounted for about 20 percent of purchases in the first half of last year, according to Geoff Smith, executive director of the Institute for Housing Studies at DePaul University in Chicago.

Like the portfolios of other investors, Invitation Homes’ Chicago-area holdings are mostly filled with properties in suburbs such as Barrington and Oak Park. The smattering of houses they own in the city itself is evidence that the rebound is starting to broaden. Even in some neighborhoods where prices fell more than the rest of Chicago during the foreclosure crisis, values are climbing.

The average homeowner may not pay much attention to this because at least their home values are increasing again. The Chicago area housing market has been sluggish and local media has made much of the uptick in home prices. Additionally, these investors are filling a void in the market.

But, this could lead to more questions in the long run.

1. What will these institutional investors do with these properties years down the road?

2. What happens when the Chicago market is no longer profitable for these institutional investors?

3. Does this mean that the average homebuyer has a better chance to buy a home or does this simply concentrate buying power in the hands of the already wealthy? In other words, this may not provide more affordable housing.

4. Since communities, particularly suburbs, tend to think homeowners are better community members than renters, is it a problem when so many homes are purchased with the intention of having more renters?

To improve health and cut costs, UnitedHealth spending $150 million on affordable housing

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Having affordable housing is linked to better health outcomes so insurance company UnitedHealth is spending some money on affordable housing units:

The firm is taking an unusual step for an insurance company –investing $150 million to build low-income housing in a dozen states…

UnitedHealth’s big push into housing isn’t charity. The company derives benefits from it, too, including tax credits.

But Kate Rubin, vice president of social responsibility for UnitedHealth Group, says the real payoff is longer term.

“Studies show that without stable homes people are sick more often,” says Rubin. “There’s more undiagnosed illness and people are more likely to seek care in emergency rooms.”

That’s expensive for insurance companies, for patients and for the rest of us, who pay the price in higher premiums and taxes.

It will be interesting to see how many units UnitedHealth is able to construct for that kind of money. It seems like the biggest payoff would be if they are able to have sufficient economies of scale, enough units to see significant long-term returns.

This also hints at the need for affordable housing more broadly in the United States and the inability of others to construct it. Public housing in the United States is limited and has had a variety of issues for decades. Lower levels of government, whether states or metropolitan regions, or local government, have had either a hard time finding the right mix of regulation and incentives or haven’t paid any real attention to affordable housing. If few organizations are stepping up to provide or prompt public housing, perhaps insurance companies are a good bet.