Housing

• A necessity, and an investment

• A factor in• transportation

• finance / economy

• access

Housing Policy

• Requires insight on much more than structures

• A multi-disciplinary approach

Housing Policy

• Focus on• Homeownership (tenure)

• variety of mortgages and mortgage assistance

• tax benefits (deductions, capital gains)

• social investment in ownership (reinvestment)

• Economy• Construction jobs

• Financial industry

• Multiplier effects

Housing Markets

• A dynamic of households and housing• As quality decreases, so does price

• and as a corollary, affordability increases

• Magic: quality, affordable housing (right…)

• Housing of decreasing quality filters downward

• Households with rising incomes filter upwards

Housing Markets

• The dynamic tends to leave insufficient housing for lower incomes (shortage)

• the investment potential for developers of low income housing is unappealing• Profit on affordable housing is low

• Require volume to generate comparable profits

Housing Markets

• Why:

• Many houses don’t filter down• remain occupied

• converted for other uses

• demolished for better/higher use of land

Housing Markets

• Why:

• Prices must fall greatly to filter down• must be affordable

• fall in price reflects decrease in quality

• decreased quality may reflect inhabitability

Housing Markets

• Process or Outcome?• Process

• cyclical – what declines will later rebound; what is of high quality will filter down.

• Housing AND Neighborhoods

• Outcome• Neglect leads to blight

• Attention and maintenance leads to stability

Housing Markets

• The Housing Bubble• Housing valued more as an investment rather than a

necessity

• Housing values inflated beyond “rational” value

• Bubble may burst

The Last Bubble

Post-bubble prices

Low Income Housing

• A regulatory problem• building codes

• zoning / subdivision

• An indirect regulatory problem• NIMBY & public housing

• A market problem

Public Housing

Public Housing

• Property Rights vs. Common Good

• Self-Reliance vs. “Nanny State”

• Private Market vs. Gov’t Interference

Public Housing

• Housing Act (1949)

• 810,000 public housing units authorized

• Authorized by Congress, implemented by localities

Housing Act (1949)

• Eliminating substandard housing

• Revitalizing city economies

• Constructing good housing

• Reducing segregation

• Approach: Tabula Rasa

Housing Act (1949)

Housing Act (1949)

• Market Process was failing• new housing & opportunity on periphery spurred

suburban flight (pull effect)

• left central cities in decline

• left local governments with diminished tax base

• limited ability to provide public services

• pushed mobile people out of cities

• left immobile behind

Housing Act (1949)

• Market failure called for gov’t intervention• 90 year old tenement in CBD• 50’ x 100’ sq. ft. lot• 12 apartments (bringing in $200/mo. each)• Value: 100 times rent roll (12 x $200 x 100)

• $240,000 / 5000 sq. ft. = $48 / sq. ft.

• $48 x 43,560 = $2,090,880 / acre

• Who’ll buy a derelict tenement valued like this? Who would sell for less?

• Why not buy vacant land in the suburbs?

Housing Act (1949)

• Created LPA’s (Local Public Agencies)• Given power of Eminent Domain• 2/3 funded by feds, 1/3 locally

• LPA’s: Planners as Entrepreneur• Acquired Land• Cleared Land• Prepped Land for Development• Sold Land to Developers at or Below Cost

• Took care of “holdout landowner”

Section 8 Housing

• Vouchers• A subsidy to apply to participating units

• Bridges gap between market rent and ability to pay

• Qualifying

• Housing stock• Set-asides from inclusionary zoning

• Landlords choosing to participate in market

Housing Trust Funds

• $$ From:• mortgage recording fees

• transient occupancy taxes

• permit fees

• Used to make affordable housing more attractive to builders• many different mechanisms provide this

• preservation, land acquisition, subsidies

Streamlined Permitting

• In General: faster permitting processes reduce costs overall (reduction in costs being passed along to the homeowner)

• Targeted: giving preferential treatment to developers who choose to compete in the affordable housing market thus meeting state & regional housing goals.

Accessory Dwellings

• “Mother-in-Law Flats”

• Basement units

• Relaxing restrictions in Single Family zoning districts to allow for accessory units

• Makes dominant unit more affordable

• Makes housing available in otherwise unaffordable neighborhoods

Development Agreements

• In master-planned developments, negotiating for faster approvals in exchange for the provision of affordable housing

Relax Minimum Floor Size

• Smaller homes = cheaper housing

• State Building codes discourage small homes

• Relaxing standards means possibility of more affordable units

• Affordability is dependent on cheap land prices

• Tiny Homes, Cottage Homes, Pocket Neighborhoods

Inclusionary Requirements

• As a condition for approval

• Requiring a proportion of units to be designated as affordable

• Working in concert with Housing Authorities