Should Affordable Housing be prioritized for 60-100k/yr households?

[chris08876]

Should Affordable Housing be prioritized for 60-100k/yr households?

I was thinking about this while reading an article on a recently finished building. In this example, its a NY based building, and I was thinking that some of the pricing seems kinda unfair to the income group I feel is really suffering, those making 60-100k a year in expensive cities.

Places like NY, SF, Boston, Washington DC... just to name a few, are very expensive, and affordable housing seems unrealistic and I feel does not really focus on the middle class.

Take an example:


Credit: NYC Housing Connect

I don't think the maximum income is high enough.

I think, IMO, affordable housing should really go up to the 60-80k range for a max, and in some cases 100k depending on the neighborhood or city. I feel the Middle Class gets screwed with these income requirements.

Now some of you might be thinking 60k is good, or even 80k, but in expensive cities, if we are talking household income, it's not really that good. These people need affordable units, not just those making less than 50k a year.

For 3 bedrooms, it should go up to 100k max.



Kids get expensive, along with all the other crap expenses that come with raising a family. In a place like SF or NY, that income does not go far.

Another though...

1) Is the area median a good indicator for pricing affordable units? Or should it include only city wide as opposed to localized?

[mhays]

The market can provide housing for these people in even the expensive cities...it's just has to be small and not perfectly located. And it has to be allowed and a fairly predictable process. Having enough zoned capacity is important so land isn't too crazy expensive. That's easy for one-bedoom units, or it should be.

For families, the more expensive the city the more tradeoff there will be between quality of location and square footage. Maybe a central location means the kids share a room (the horrors!) and there's everyone shares a bathroom. That assumes that prices don't need to be at SF levels except by local choice.

Accessory units are a great option in cities with houses, if they're allowed. These should be a major source of smaller units in quieter neighborhoods for those who value that.

[lio45]

Originally Posted by ChiXP

Why should the middle class have to back in time?

Price to pay to live in the heart of the Manhattan of 2017. I'd actually say it's moving forwards, not backwards. Going back in time at this point would be insisting on a detached house on a large lot, and driving everywhere.

[lio45]

Originally Posted by ChiXP

So you support lowering the standard of living for millions of people. That's nice.

I guess I do, _if_ you insist that a downtown condo in a dense, desirable and perfectly walkable neighborhood is "lower standards living" than a suburban or exurban bungalow with a large back yard and a Chevrolet Suburban in the driveway.

That's debatable, and a matter of opinion.

[ChargerCarl]

Originally Posted by ChiXP

So you support lowering the standard of living for millions of people. That's nice.

As opposed to the millions of middle class people that can afford to live in Manhattan now?

Get real. High density housing is expensive to build. Living in the city center has never, and probably will never be a realistic option for most people.

[ChargerCarl]

No they're not. Cost per square foot is much higher on tall buildings vs low rise ceteris paribus, which is why they're only built in places where with high land values.

[Centropolis]

we still have a colossal reservoir of cheap middle class housing in the us. i was just in cincinnati and saw a hillside of brooklyn-grade housing stock with busted windows.

[UrbanNebraska]

I has been a few months since I have seen an update, but the new legislation that is going to be introduced concerning LIHTC was going to have language to allow 80% AMI units in projects to help cover the extremely low income units in the 30-40% range.

[Cirrus]

Originally Posted by OP

Should Affordable Housing be prioritized for 60-100k/yr households?

No. Affordable Housing programs can never cover everybody. At best they're a lottery with a small number of winners and a lot of losers. To solve the problem you describe (which is absolutely a big problem), we need a larger systemic solution that attacks the root cause.

The problem in cities like DC & SF is that there's not enough housing. Subsidizing some units for people in a certain income bracket does NOTHING to solve it. Here's a simple model to show how it works: Imagine you have 10 people hoping to live in a space with only 6 homes. The no-subsidy result is that prices go up to the point where the 6 wealthiest people can afford a home, and the 4 least wealthy can't. Here's what that looks like:

Housing market with no subsidies:
1st wealthiest person: Gets a home
2nd wealthiest person: Gets a home
3rd wealthiest person: Gets a home
4th wealthiest person: Gets a home
5th wealthiest person: Gets a home
6th wealthiest person: Gets a home
7th wealthiest person: Does not get a home
8th wealthiest person: Does not get a home
9th wealthiest person: Does not get a home
10th wealthiest person: Does not get a home

Now let's imagine we adopt some kind of affordable housing program, to subsidize some units for those middle income people who lost out. Doing so would only swap out 1 or 2 of the 4 losers with the 1 or 2 least wealthy homeowners, but you'd still have 4 people who don't get homes. Here's what that looks like:

Housing market with subsidies:
1st wealthiest person: Gets a home
2nd wealthiest person: Gets a home
3rd wealthiest person: Gets a home
4th wealthiest person: Gets a home
5th wealthiest person: Does not get a home
6th wealthiest person: Does not get a home
7th wealthiest person: Gets a home
8th wealthiest person: Gets a home
9th wealthiest person: Does not get a home
10th wealthiest person: Does not get a home

It's no better overall, because the root cause of the affordability problem (ie that there are not enough homes) has not been addressed at all. There are exactly the same number of winners and losers. It's individually nicer for persons 7 and 8, but worse for persons 5 and 6 by the exact equal amount.

The only solution is to build 4 more homes.

[Centropolis]

Originally Posted by Cirrus

The only solution is to build 4 more homes.

or more and more people trickle into (or boomerang back to) richmond or kansas city or cincinnati.

[lio45]

Originally Posted by Centropolis

we still have a colossal reservoir of cheap middle class housing in the us. i was just in cincinnati and saw a hillside of brooklyn-grade housing stock with busted windows.

No need to even leave New York (State). Last I checked this Albany brownstone was still empty with broken windows.

https://www.google.ca/maps/place/10+...!4d-73.7512138

[Centropolis]

Originally Posted by lio45

No need to even leave New York (State). Last I checked this Albany brownstone was still empty with broken windows.

https://www.google.ca/maps/place/10+...!4d-73.7512138

yep... (and while i understand individual derelict properties often have problematic owners or particular barriers to rehabbing when you have entire blocks of stuff like that then you have something).

[Steely Dan]

"affordable housing", as i've seen it implemented, seems like a wealth transfer scheme from the upper class to the working class to fuck over the middle class.

[mhays]

As always Cirrus, fantastic job of explaining.

Sometimes a subsidy program claims to add net additional units. When the subsidy system directly discourages new market rate housing (by making it cost more) they're almost certainly wrong, as the number of units that don't get built far exceed the number that are added. The net effect can be fewer total units than without a subsidy. In that scenario, every renter in the city pays more.

It's impossible to compare parallel universes, but it seems that there are models that add units. A broad-based tax program that doesn't put the burden on construction can do that.

Of course it gets extremely complex. Even the latter concept depends on a finite resource -- land. Therefore it affects the price of land for everybody.

[lio45]

Originally Posted by Cirrus

It's no better overall,

Some would disagree with that. One disadvantage of the upper distribution is that the neighborhoods where all the people in red in your list will all end up concentrated will be significantly, visibly poorer. This often causes other problems (and sometimes spirals out of control, over time).

At least with the lower distribution by letting poorer people be in desirable neighborhoods you're forcing moderately wealthy people like #5 and #6 into neighborhoods that they can gentrify a bit - with the upper distribution there's a greater chance these areas will instead be homogeneous low-income cesspools of crime and poverty (and "retail deserts") where people #1-#6 would never ever set foot.

[JManc]

Originally Posted by ChiXP

Please, it doesn't cost any more to build in a tower in NYC vs Akron. High density towers are the most efficient method of providing housing.

Then why aren't there any in Akron but all over in NY?

[C.]

Originally Posted by Cirrus

The only solution is to build 4 more homes.

Bravo!

[Centropolis]

Originally Posted by ChiXP

High density towers are the most efficient method of providing housing.

that's like saying a mall is the most efficient way of providing shopping.


businessinsider.com

until it isn't. these large grained things can be tricky over time, unresilient systems.

[lio45]

Originally Posted by ChiXP

Please, it doesn't cost any more to build in a tower in NYC vs Akron.

That's not true. Land is more expensive. Labor is more expensive. Permits are more expensive. All subcontractors will be more expensive (they have their own New York expenses to pay and have to live). Materials will be more expensive as they'll have to be either sold in NYC by businesses having New York costs, or else have to be transported to the city (adding costs and hassle).

[Cirrus]

Originally Posted by Centropolis

or more and more people trickle into (or boomerang back to) richmond or kansas city or cincinnati.

Forcing people to leave is not a solution to a city's affordability problem.