housing a necessity, and an investment a factor in transportation finance / economy access
TRANSCRIPT
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Housing
• A necessity, and an investment
• A factor in• transportation
• finance / economy
• access
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Housing Policy
• Requires insight on much more than structures
• A multi-disciplinary approach
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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
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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
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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
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Housing Markets
• Why:
• Many houses don’t filter down• remain occupied
• converted for other uses
• demolished for better/higher use of land
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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
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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
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Housing Markets
• The Housing Bubble• Housing valued more as an investment rather than a
necessity
• Housing values inflated beyond “rational” value
• Bubble may burst
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The Last Bubble
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Post-bubble prices
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Low Income Housing
• A regulatory problem• building codes
• zoning / subdivision
• An indirect regulatory problem• NIMBY & public housing
• A market problem
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Public Housing
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Public Housing
• Property Rights vs. Common Good
• Self-Reliance vs. “Nanny State”
• Private Market vs. Gov’t Interference
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Public Housing
• Housing Act (1949)
• 810,000 public housing units authorized
• Authorized by Congress, implemented by localities
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Housing Act (1949)
• Eliminating substandard housing
• Revitalizing city economies
• Constructing good housing
• Reducing segregation
• Approach: Tabula Rasa
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Housing Act (1949)
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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
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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?
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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”
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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
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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
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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.
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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
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Development Agreements
• In master-planned developments, negotiating for faster approvals in exchange for the provision of affordable housing
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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
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Inclusionary Requirements
• As a condition for approval
• Requiring a proportion of units to be designated as affordable
• Working in concert with Housing Authorities