Affordable Housing: Policy Tools & Best Practices

In its ongoing series on affordable housing, the Town of Chapel Hill hosted Michelle Winters, senior visiting fellow at the Urban Land Institute’s Terwilliger Center for Housing last Tuesday to talk about the policy tools and best practices for affordable and workforce housing.

Winters began her presentation discussing housing trends nationwide and specifically talked about the recent surge in renter households that is expected to continue into the future. The most important takeaway: Half of all renter households are at least moderately cost burdened, meaning they spend at least 30% of their income on rent. This statistic highlights why housing professionals have broadened their discussion of what affordable means in recent years to include a range, all the way from homelessness to just below market rate. As the town’s executive director for housing and community development, Loryn Clark, put it: housing needs to be affordable for everybody.

Winters outlined several best practices for designing affordable and workforce housing. Specifically, affordable housing should be (1) mixed-income, mixed-use, and intergenerational; (2) walkable, well-located, and service-enriched; (3) well-designed, meaning attractive, sustainable, and compact; and (4) well-executed, through the leveraging of partnerships and the use of financially innovative approaches.

She also summarized the following as important approaches to providing affordable and workforce housing:

  • Communicate why housing matters
  • Preserve what’s already there
  • Use land use tools to support inclusive communities
  • Streamline the development process
  • Financial strategies to spur production

What stood out to me most in Winters’ presentation were just how many approaches to providing more affordable housing Chapel Hill is not currently utilizing – and how this fact has had a real negative impact in our community.

For example, our development process is currently a cumbersome, time-consuming, and expensive affair. Many developers have simply written off Chapel Hill because of this and chosen to develop elsewhere. Those developers who have continued to do business here are forced to charge higher rents and home prices to recoup their upfront costs, which only exacerbates our affordability problem. Streamlining our processes is a fundamental step we have to take to make affordability a more achievable goal. How much longer can we wait to do this until it’s just too late to make a difference?

Accessory dwelling units are another tool Winters highlighted to increase the affordability of housing, yet homeowners in Chapel Hill and Carrboro, if they are allowed to build accessory dwelling units at all, face regulatory obstacles to doing so. Winters specifically emphasized the importance of crafting regulations that make providing accessory dwelling units easy, unlike the ordinance in her home of Arlington – and unlike existing regulations right here in our community.

Another important point Winters raised that is particularly relevant to trends in Chapel Hill and Carrboro is how we should respond to rising rents and home prices along major transit corridors. Some elected officials have suggested increasing transit service and adding density is something we shouldn’t do because dense, walkable areas are desirable places, meaning it’s costly to live in these areas. Contrary to this line of thinking, Winters’ solution seems a lot more intuitive and sensible to me: Build more transit to create more desirable places to live and therefore reduce prices by increasing supply.

There aren’t easy answers to our affordable housing crisis, but there are solutions we can implement right now to move us closer to our goals. The real question is why haven’t we taken major steps to fix our development process and regulations already – and what will the consequences be if we wait any longer to implement these absolutely necessary changes?

The final “Come Learn with Us” session on affordable housing is April 9th at 5pm at Chapel Hill Town Hall. The presentation is entitled “Opportunities for the Future: Recommendations and Strategies for Affordable Housing.”

Total votes: 330

Comments

You listed a bunch of solutions to the housing crisis in Chapel Hill (and all other highly desirable places to live), but then suggest there aren't "easy answers." Density is easy. Just permit it, and builders will figure it out.What's hard is getting NIMBYs to let go of their wrongheaded approach to housing policy. I'd like some clarity about what they really want (gated community?) and some creative strategies about how to raise awareness of what is, for many people, the single biggest problem they face.

 

 

 

You've highlighted why these solutions, though they exist and could be implemented effectively, are not necessarily easy – political opposition. Our processes in Chapel Hill are designed to move slowly, which provides plenty of opportunities for those who may not agree with some of these solutions to be vocal about that fact.

I keep hearing density is the solution and that anyone who doesn't buy into that line of thinking (a meme that benefits developers more than anyone else) is a NIMBY. Show me the evidence. Show me where the added density built up over the past 15 years has had any positive impact whatsoever in supporting affordable housing. Show me how density bonuses and inclusionary zoning have demonstrated the success those tools can have in this community. Notice the list of approaches in Travis' post and the item that says "Preserve what’s already there." In this community, that's a strategy that gets labelled as NIMBY. 

I'm not saying the some of tools and strategies used in other communities can't work and I'm not throwing out density as a solution in some areas of the community. What I am saying is that the headlong rush into density on every piece of open space is foolish and has no "undo" option. There has to be a better way of finding solutions than ruin the community and end up creating a place where people live temporarily before moving onto their real lives.

Terri, it's important to first contextualize what Winters meant when she says "preserve what is already there." If you consult her presentation, you will see the strategies listed in terms of preservation are about renovating existing affordable housing and tracking changing land uses on older buildings that could be used for new affordable housing. What she did not mean from this is to preserve market-rate housing that might be considered "affordable" at its current price. This kind of "preservation" is not an effective strategy precisely because landlords will make different decisions about what to do with their properties based on market conditions, meaning if the market is failing to provide adequate supply, those units are likely to filter up to be targeted at tenants who have the income to pay higher rents.

As for the evidence you're looking for, start with this fantastic blog post, which does a great job providing evidence from areas around the country – including right here in Chapel Hill (Shortbread Lofts & LUX Apartments) – where adding housing supply caused rents to drop.

And here are a few more articles you can look at, too, that explain filtering and why increasing housing supply is so important when we talk about affordable housing:

 

Sorry Travis, I know you can find articles that support your position, just as I can find them to support mine. That means the evidence is murky and insufficient. That's the problem. Building new "affordable" houses may help our low income residents and that's important. But preserving the housing that is affordable to our middle income residents is equally important. Think of it statistically--the middle income housing is critical (and middle income should be defined by the state average not the local average since that reflects the current untenable situation).

Then, Terri, why ask for evidence if you're just going to dismiss it? Also, please find those articles to support your position – I have yet to see any evidence that limiting housing supply and "preserving" market-rate "affordable" housing does any good for the affordability of housing.

Also, you're right that ensuring housing is affordable for everyone, including middle-income folks, is important. But limiting the supply of housing doesn't do that. Housing prices will continue to rise as long as there is sustained demand and insufficient supply. Houses that are currently affordable for the middle class won't stay that way if supply is finite, so you can't "preserve" them that way. That's not how the market works – and Chapel Hill is the perfect case study for why that is. In Durham and Raleigh, prices for comparable houses to those in Chapel Hill are so much more affordable in part because the supply of houses in both of these areas has grown in response to demand while the supply in Chapel Hill has grown much, much more slowly, which has led to the pricing out of many middle-class families who might otherwise choose to call Chapel Hill home.

Travis, why don't you read up on system dynamics. Donella Meadows is a good place to start. You can grow "supply" indefinitely but that doesn't ensure solution of the problem (creates a positive feedback loop--like a bathtub with no sensor to indicator the need for cutoff). One of the reasons we have our current affordability problem is due to our excellent schools. When I-40 opened up and more of the STEM type professionals from Research Triangle could live here and commute to work, they chose to do so in order for their kids to attend our school system. It could be coincidental, but that's when the affordability issue really took off. What happens when Raleigh and Durham schools can reasonably compete with CHCCS schools and housing is still so expensive? My assumption is that more will choose to live elsewhere and then, we could end up with an over supply of housing. 

The evidence I want is cost of housing (per square feet) over time (1990-2015) compared to housing inventory (quantity) and cost for the same time frame. If that detail shows that an increase in housing supply has reduced costs per square feet, then I will accept the evidence as compelling and that increasing supply will offer a positive solution to the affordability problem.

 

Part of the problem with finding the data you want is almost all American cities in the post-Robert Moses/Jane Jacobs era (1970-present) have been against new construction. Canada is doing a much better job. Two charts help show the impact. First:

Here's a chart showing housing starts in the U.S. and Canada from 2000 to 2010. Even given the real estate boom in the aughts, we barely kept up with population growth (10%) and most major cities underproduced housing. If someone has numbers for Chapel Hill, I'd love to see them. Canada grew a similar amount, and yet Toronto added 20% more housing, and construction hasn't slowed since then.

So what's the impact in Toronto? As you can see from this chart, rents have not gone much at all, even while home prices have increased (Canada is likely in a bubble, but again, it's one that's producing more housing, which will be even cheaper when/if the bubble bursts). For visible evidence of the housing growth in Toronto, look at this image:

 

The top image is from 2001, the bottom is from 2014. This is the level of housing construction we need, not just in Chapel Hill, but every major  American city, in order to keep up with demand. In 1930, New York had a population of 7 million people, and the U.S. had 123 million. The U.S. population has tripled since then, but New York's has barely budged, in part because the city refuses to build enough housing, particularly in Brooklyn/Queens. The same problem is here in Chapel Hill. Build accessory dwellings, build small apartment buildings and multi-family houses, build apartment towers downtown and other commercial centers. Sure, there's a risk we over-build, but the consequences--low rent, which would make it easier for students to stay here after graduation and young families to live here—seems to me a net positive, not something to be concerned about. 

 

 

The US population growth rate is 0.7% (2014). The NC growth rate was 4.3% between April 1, 2000 to July 1, 2014. 

According to the Town of Chapel Hill's Residential Market Study (2010), the growth in housing stock exceeded demand by 47%. "The Triangle housing market was largely over-built in the past decade. Within the Chapel Hill Housing Market Area, 33,766 new housing units were built between 2000 and 2008. However, household growth during that period was only 20,160, meaning that there was no intrinsic demand for 16,182 - 47% of the units built in Durham, Orange or Chatham Counties."

Low density single family homes are the incubator for the middle class.

In economic terms, the fundamental difference between actual and planned density is that actual density is the outcome of demand, constrained by the cost of living at different locations and densities. In the case of the poor, density is by allocation usually based on cost.

Expanding the point; human behavior shows that as income rises people want both to live separately, (average size of households falls); and that each of those households will opt for more space per person (density falls). Even a casual observer such as myself, can see the fundamental tension between what people here suggest vs. what people will actually choose to do given economic options.

High density drives the wedge between the rich and poor. Big high rise low density penthouses in good areas for the rich and small dense apartments in bad areas for the poor. The middle that have kids, and need space are squeezed out.

I enter this discussion at my peril. I do not pretend to be an expert. So, treat this post as a question, rather than as a hard and fast comment.

I was a municipal councilor, back in my twenties, in a town in the UK, much the same size as Carrboro.

We struggled with providing affordable housing. The one thing we learned, and I have seen it echoed in the 30 years since, is that, whatever the experts or the evidence says, if you infill (our word for increasing density in existing developed areas), in already desirable areas (good education, near transport, services, downtown, etc.), it never brings the cost of housing down.

In other words, if the market makes housing expensive to build or rent (demand, overheads), then its sale or rent will also necessarily be high. Unless you make a deliberate decision to suppress its price.

I wonder if locally folks are not trying to conflate diametrically opposed ambitions? You say you want affordable housing for sale and rent. But you think you can achieve it by infilling in areas of high demand and cost - whether that is due to location in geographically limited areas of good education, proximity to existing services, transit, whatever.

At the risk of setting off the screaming hab-dabs, my experience (not someone else's stats, blogs or 'evidence') is that, if you want low price, you have to build where it is low cost. You can not take contradictory criteria and attempt forcefully to conflate them. Not in market driven development.

 

Content license

Creative Commons License
All content on OrangePolitics is licensed under a Creative Commons Attribution-NoDerivs 3.0 United States License.

 

Donate to OP

 
Zircon - This is a contributing Drupal Theme
Design by WeebPal.