Do some cities have *too much* affordable housing?

[James Bond Agent 007]

I was going to put this in the "unpopular opinions" thread but I think it's a big enough topic to deserve its own. I've been thinking about starting a thread on this topic for a while.

Many cities - such as my own of KC - have too much affordable housing. I can't believe there are actually habitat for humanity developments here in KC and people calling for the city and developers to "build affordable housing." All the while there are literally hundreds or thousand of houses one can own for less than $100K and even less than $50K, and apartment to rent for, like, $500/month. Or less. In fact, one of the city's biggest problems is there there is so much of this stuff they have to tear a lot of it down.

Places like Detroit would be an obvious example of this. Some cities I think they should put a moratorium on building any sort of below-market-rate housing, because there is just already too much of it. Some people are so knee-jerk about the, "Build some affordable housing NOW!" attitude that I think they never even stopped to think that their own city might actually have too much of the stuff. Here in KC I recently read an article about a public housing project east of downtown that was seeing increasing vacancy rates (I think it was only about half occupied, or something). Now, if they can't even fill up the public housing projects, what does that tell you about the demand for affordable housing?

I'm not saying every city is like that, no way. Places like Seattle, NYC, SF and probably LA definitely have shortages of affordable housing. But I suspect most cities in the Midwest and many in the South have more than they need.

[the urban politician]

Chicago has too much affordable housing, despite the city's efforts to make affordable housing illegal.

Not there yet, I guess

[Pedestrian]

"Affordability" is relative to local incomes. Usually it's expected somebody making the local median income should be able to buy the home in question and spend no more than 30% or so of disposable income making payments on it (100% financed? 80%?). No doubt homes sell for a lot more in SF or Seattle but incomes are certainly higher in those places too. I am NOT arguing KC isn't far more affordable than those places but it may be not quite as much more affordable when incomes are taken into consideration than it first appears. Also, some of that very low priced housing may be in such disrepair it deserves to be torn down. When looking at affordability there is an assumption the housing in question is in good shape--not luxury shape, just "move-in ready" with standard finishes. In other words, it's not an "affordable" comp if it needs a new roof, new plumbing (a la Flint) or rewiring to be livable.

[James Bond Agent 007]

The reason why they tear down houses (and there is a lot of that going on in KC) is because they're vacant (duh). The reason they're vacant is because nobody wants to live in them (duh). But many of the houses they tear down aren't all that bad, or at least they were livable maybe only 5 or 10 years ago in many cases, but nobody wanted to live there so the house went downhill with nobody maintaining it and the inevitable decline set in. The question needs to be asked, if a reasonably livable (if not fancy), affordable house has no takers, what does that say about demand for affordable housing? Given that this phenomenon occurs thousands of times in cities like KC, it tells me that either the supply of cheap/affordable housing is so great, or the demand for cheap/affordable housing is so low, or some combination of both, that much of this excess supply of affordable/cheap housing no longer gets "consumed," at which point it will start to deteriorate and eventually get torn down.

Large numbers of vacant houses in a city IMO are a sign there is an excess of inexpensive housing in the city.

[eschaton]

Keep in mind that a lot of low-income people just aren't cut out for homeownership, either because they don't have the requisite skills or because they don't have the financial resources. Even if the local government paid to rehab a failing house and handed it over to a low-income family, within 5-10 years some issue is going to come up which should be addressed, but might cost hundreds to thousands of dollars to deal with. Rather than dealing with it, the average low-income person will defer maintenance, resulting in the house losing value. Eventually you could be right back where you started.

Also, buying a house - even a cheap one - is far harder than buying an affordable apartment. Even if the monthly payments are lower than rent would be, you typically need at least a few thousand dollars down payment (plus closing costs, depending upon what sort of mortgage you get). The average poor person will never save that much money. Indeed, one reason why homeownership boomed during the housing bubble is the mortgage industry developed predatory no money down/variable interest loans, and began giving them to people who were not income or credit qualified for normal mortgages. The vast majority of lower-income people who bought houses this way lost them due to foreclosure during the Great Recession.

One thing which perhaps could be improved is how local law deals with abandoned properties. Here in Pennsylvania we have some of the strictest laws regarding "homeowner rights" in the country, which unfortunately makes it very hard to seize abandoned homes. Basically a city must wait until no taxes have been paid for three years. Only then can they begin the process of seizing the house, which itself could take years. By the time the houses go to sheriff's sale years later, they have decayed considerably, and often have liens on them worth more than the market value of the house if it were fixed up. Often here in Pittsburgh by the time the city gets control of the house they have no choice but to knock it down. And if there is an absentee owner who pays taxes, won't sell, and refuses to maintain their property, there's absolutely nothing they can do at all. In some of the hottest gentrifying neighborhoods in the city there are still hundreds of "abandoned" properties for this reason - people would pay top dollar for the shells for rehab, but the owners are often elderly, live in nursing homes, and/or are out of state, so there's no clear legal way to sell the homes.

[Kenmore]

Originally Posted by the urban politician

Chicago has too much affordable housing, despite the city's efforts to make affordable housing illegal.

Not there yet, I guess

gross opinion

[Via Chicago]

Originally Posted by the urban politician

Chicago has too much affordable housing, despite the city's efforts to make affordable housing illegal.

Not there yet, I guess

says the landlord

youve spouted the same nonsense in countless other threads so really dont feel like going down the same dumb arguments. you are not "entitled" to anything more than what people are wiling to pay you, and its really that simple.

[ChargerCarl]

Aren't we just saying that the real issue is a lack of demand, presumably because of crime and other ill social effects? "Too much affordable housing," while technically accurate, seems an odd way to frame things.

Nobody complains about there being too much affordable housing in Tokyo, for example. In fact the government is constantly refining zoning codes to increase the housing supply and bring already low costs even lower.

[pdxtex]

too much affordability means too little economic growth. they should focus on improving that while using the existing housing stock before building new stuff. but, lots of people need a more managed situation so perhaps single family home ownership isn't a good fit for some folks. I wish the NW had a surplus of cheap housing

[the urban politician]

Originally Posted by Via Chicago

says the landlord

youve spouted the same nonsense in countless other threads so really dont feel like going down the same dumb arguments. you are not "entitled" to anything more than what people are wiling to pay you, and its really that simple.

This isn't about myself, believe it or not.

It's about the fact that even though the city is actively trying to force gentrification, it's still got way more affordable housing than comparable cities on the coasts.

[Via Chicago]

Originally Posted by the urban politician

This isn't about myself, believe it or not.

It's about the fact that even though the city is actively trying to force gentrification, it's still got way more affordable housing than comparable cities on the coasts.

if this isnt "about you" then why would you care? you frequently have the dumbest opinions on this topic

[the urban politician]

Originally Posted by Via Chicago

if this isnt "about you" then why would you care? you frequently have the dumbest opinions on this topic

What a great question

I've laid out why I care many times, and why the city's policies are only making things worse. I'm not going to waste my time doing it again just so that you can read the first sentence of the paragraph and throw out another impassioned "the free market is evil!" diatribe while labeling all property owners as your evil, greedy nemeses.

[Via Chicago]

/

[Via Chicago]

Originally Posted by the urban politician

What a great question

I've laid out why I care many times, and why the city's policies are only making things worse. I'm not going to waste my time doing it again just so that you can read the first sentence of the paragraph and throw out another impassioned "the free market is evil!" diatribe while labeling all property owners as your evil, greedy nemeses.

um, youre the one who frequently seems to think the free market is "wrong", evidenced in asinine posts such as:

Originally Posted by the urban politician

The rents in Chicago are too low, unfortunately. They need to be about 50-75% higher.

so which is it?