Affordability: Pricing versus Income Targeting

Don’t confuse PRICING and INCOME TARGETING when discussing affordability. Rents for folks earning 80% of Area Median Income (AMI) can be set affordably while rents for folks earning 50% of AMI can be set unaffordably.

What is found in this piece is actually an appeal to change income targeting, not an appeal to make this project more affordable.

From the piece:

“Though these units have been designated as affordable, ‘only even a small number of those are at the 80% (AMI) level, and 80% is the highest end of what you can really call affordable housing,’ said Peter Asen ’04, deputy director of development and governmental affairs for the Providence Housing Authority.”

A link to the piece is found here

The Hidden Cost of Building on a Marginal Development Site

Affordable housing is often relegated to marginal development sites, frequently with environmental issues, adding to the cost and time associated with development. Indeed, the developer and the future residents of these projects will ultimately pay for remediation, which is no way of incentivizing much-needed development.

From the piece:

“During a Feb. 7 Citizen Advisory Committee South St. Petersburg Community Redevelopment Area (CRA) meeting, City Architect Raul Quintana informed the committee members the soil contamination was discovered through sampling, and they are now working with the DEP (Department of Environmental Protection) on the removal process. Soil contamination is commonly found at industrial sites.

A dry-cleaning business and metalworks building once operated at the location.”

A link to the piece is found here

Endless Studies: NIMBY Tactic to Discourage Development

This is how they do it. Affluent towns like New Canaan use endless “studies” to discourage affordable housing development. And they often create “committees” purportedly to produce more affordable housing, but in reality to kill any new proposals.

I’ve even seen cities purposely rezone low-lying and swampy areas for affordable housing, knowing they will never be buildable. That way, they can look good on paper (zoning map) while systematically discriminating against lower income families.

This is the modern face of bigotry.

From the piece:

“In a letter to the town, Karp’s attorney Christopher Smith argued the WPCA is trying to prevent more affordable housing from being developed in New Canaan and the delay has nothing to do with global warming.”

A link to the piece is found here

Workforce Housing: Excellent Inflation Hedge

“Some multifamily types are more inflation-resistant than others. This is particularly true with workforce housing—one of the more overlooked and underappreciated segments of the multifamily market. Due to its strong fundamentals and lack of existing housing supply, workforce housing is a worthwhile consideration as an investment, especially during volatile economic times.”

A link to the article is found here

A New Approach to Workforce Housing Development

This is the way to do it.

The city has the tools for fast-track approvals and the issuance of bonds. Private companies like mine can bring the technical expertise to design and manage these developments for cities who choose this approach.

From the piece:

“City staff is working on a plan that would have the city build and hold its own workforce housing.”

A link to the piece is found here

Linking Housing Development with Economic Development

There’s the old adage: “You always get less of what you tax.” That’s why an affordable housing tax on developers is such a bad idea.

In reality, the creation of workforce housing should be linked to job creation. It should be treated just like any other public improvement.

For example, a large manufacturer comes to town and the city determines what new infrastructure will be needed to support the new facility. The city issues bonds to extend water, sewer, gas, and electricity and contracts the construction of these new utilities.

While they’re at it, why not evaluate the manufacturer’s housing need and issue bonds for it, too? This, along with fast-tracking the zoning approvals for a sufficient number of workforce housing units, would be a good aporoach.

Cities have all of these tools at their disposal. Proactively using them instead of doing the bidding of the short-sighted NIMBY crowd is the solution to our workforce housing problem.

From the piece:

“Starting in 2017, all new apartment buildings built in Portland with more than 20 units must dedicate a portion of their units to low and moderate-income housing. But some developers are choosing to pay a penalty instead of creating affordable housing.”

A link to the article is found here