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“I keep going over a sentence. I nag it, gnaw it, pat and flatter it.”
- Janet Flanner |
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Communities Work to Ensure
Housing for All |
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| January/February 2003 |
Currently in America there are 14.5 million households with critical housing needs. In a country where being able to buy a home has long been a standard of what it means to succeed, affordable housing is now a top-of-mind issue for citizens and officials alike.
But advocates are struggling to debunk the notion that only the unemployed and most impoverished cannot afford housing in the U.S. In the new millennium, we face a crisis in "workforce housing." That is, affordable housing for working families whose members provide important services, such as teachers, police officers, firefighters-jobs that are critical to a well-functioning society.
"Clearly there is a cost to communities if their housing stock lacks an economic diversity. It impacts the school system. It impacts the infrastructure and transportation," says Fred Cooper, deputy director for policy and programs at the Community Development Financial Institution Fund. CDFIs are specialized financial institutions that work in market niches that have not been adequately served by traditional financial institutions. In Boston, for example, CDFIs have been pioneers in the affordable housing fight, as we will see later in this story.
The Local Lore
Though the debate concerning affordable housing has long centered on distressed areas and large cities in which reasonably priced homes and up-to-par existing housing stocks are diminishing, this crisis is now also affecting growing counties.
In pastoral Charles County, Maryland, the workforce housing issue has been propelled to the forefront of discussion by such factors as a growing population, a reduced supply of rental housing, comparatively affordable land and a booming housing market.
A Community Development Housing Plan, commissioned by the county's Housing Commission, is underway. The study will examine a range of topics, including how the county will meet housing needs for its 120,546 residents and a morphing demographic whose median income has risen from $46,415 in 1990 to $62,199 in 1999, according to U.S. Census figures and county statistics.
Traditionally, the federal government has defined affordable housing as housing that costs no more than 30 percent of gross income. In Charles County, 23.5 percent of homeowners pay 30 percent or higher on housing (based on selected monthly owner costs as a percentage of household income), while 35.7 percent of renters pay 30 percent or higher on housing (based on gross rent as a percentage of household income).
Teaching Some Housing Lessons
Of the total 41,668 occupied housing units in the county, 78.2 percent are owner-occupied, while 21.8 percent are renter-occupied. Finding affordable rental housing has been an obstacle in recruiting teachers, officials say.
To combat the problem this year, the Charles County Board of Education aggressively advertised to identify available housing and kept a file for prospective teachers.
But in California - a bellwether in the affordable housing-crisis - solutions to the dilemma of recruiting and retaining teachers has been met with one very unique approach.
Boards of education from Santa Clara to San Jose have either built lower-cost housing for teachers or voted to do so. In Newark, Calif., beginning teachers earn $45,068, but the median home price is $419,000, according to The San Jose Mercury News, so school officials there are mulling over the feasibility of building 250, upscale affordable apartments.
Help From the Feds
Some critics of the U.S. government's initiatives to tackle the workforce housing crisis point to Housing and Urban Development (HUD) funding that hasn't kept pace with the nation's housing priorities. As housing needs escalate for low- and moderate-income households (typically those 80 percent or below area median income), more emphasis is being placed on how working Americans will be able to finance moderate housing in a nation where expensive, luxurious homes are more the norm.
But the fact remains that several key programs are helping close the gap in affordable and workforce housing. For years, the Low-Income Housing Tax Credit has been used as an incentive to increase the number of rental housing units by giving tax breaks to landlords.
And now, as part of the federal 2003 budget pending in Congress, there is a proposal for a Single Family Affordable Housing Tax Credit which would provide $2.4 billion over the next five years to increase low- and moderate-income homeownership, according to Brian Sullivan, a spokesman with HUD. Already in existence are two other programs, Community Development Block Grant (CDBG) and the Home and Investment Partnerships Program, known as HOME, meant to help meet the nation's affordable and workforce housing needs.
CDBG works to ensure decent affordable housing, and funds are earmarked for specific "entitlement communities" as well as divvied to states to distribute to localities that do not qualify as entitlement communities. HOME underwrites a number of economic development activities, including expanding the supply of affordable housing.
Creative Solutions
Boston Community Capital is a federally approved CDFI. A non-profit holding company consisting of various types of financial corporations, BCC has worked with at least half of the 66 Community Development Corporations (non-profit developers) in Massachusetts.
In Boston, CDCs are at the heart of how housing advocates are dealing with the shortage in affordable and workforce housing in a city whose median income is $61,000 and whose average house price is more than $400,000. Sixty percent of families in Massachusetts pay more than 50 percent of their income on housing, says Dick Jones, president of BCC.
While many states only rely on federal funding to address housing needs, Massachusetts is apparently unique. Affordable housing subsidies exist on all levels - federal, state and city - and a range of inventive programs are being used to increase the supply of affordable housing for the poor and the young professional.
Land is given by the city in some cases, mortgages come in the form of grants in other cases, and the financing of home construction is subsidized in many cases.
Inclusionary Zoning
Local jurisdictions have also discovered their own solutions to the affordable housing crisis. Since the 1970s, Montgomery County, Md., has relied on a mandatory moderately priced dwelling unit (MPDU) ordinance.
The logic of this plan is based on the assumption that developers who are forced to provide a certain percentage of affordable housing units when they build large residential subdivisions will be assuaged by the density bonuses they get in exchange.
"The key to a successful affordable housing program - whether federal or local or subsidized or not subsidized - is having a good design review and making sure the units are structurally appealing and in sync with the other houses in the area or what's planned for the future," says Gus Bauman, an attorney with the land use and environmental law firm, Beveridge & Diamond and a former Montgomery County, Maryland planning executive.
There is no silver bullet in addressing the issue of affordable and workforce housing, but counties should update their comprehensive plans every five years and make sure that older areas are revitalized and restored as newer and more modern homes are built, adds Bauman. They must also consider alternatives based on input from residents and strive to strike a balance that guarantees that all levels of housing, based on all levels of income, exist.
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