http://www.placemakers.com/2014/07/28/are-we-there-yet-affordability-in the-new-normal
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Typical American suburbia
utne.com
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Hello Everyone:
"Are we there? Are we there? Are we there?" This plaintive cry is familiar to parents around the world during long car trips. Fortunately, we are not going to take about unending family road trips. Instead, with the help of Ben Brown, we are going to discuss housing affordability in the 'New Normal.' 'New normal,' what is that? Mr. Brown's article, "Are We There Yet? Affordability in the 'New Normal'" for
http://www.placemakers.com considers the housing market in the last several years, following the collapse of the home mortgage industry or as Chuck Marohn refers to as the "growth Ponzi scheme." We all drank the proverbial Kool-Aid, bought houses or refinanced our current homes to pay for that pool or second story, putting off the inevitable repayment process as long as possible, the reality came crashing in leaving a trail of foreclosed houses and blighted neighborhoods in its wake. This financial and personal disaster left many wondering, "what now?"
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Blighted Baltimore, Maryland
npr.org |
What now, five years after the Great Recession supposedly ended? What now is we are just beginning to make sense of the long term affects of the home mortgage industry collapse. What is already apparent is, "The ways in which we've designed, financed, constructed and regulated land use development need some serious tweaking if we're to align the ambitions of families and business in the new era with the infrastructure of community to their success." However, Mr. Brown points out, "The trouble is, investing so much of our energy and so many of our resources in fine-tuning the Ponzi scheme has left us bummed and broke." Unfortunately, there is no miracle cure or easy way to go back to the way things were, happy and prosperous, before the cold hard slap of reality.
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Blighted Buffalo, New York
buffalo.ynn.com |
Where do we begin to make things right? Ben Brown suggests "correcting the Ponzi-era thinking that affordable housing is all about slashing housing costs. Raising affordability by lowering the quality of design, construction, materials and location is a race to the bottom." Absolutely true, affordable housing can be well-built, beautiful, and functional. He further suggests that we do away with making home ownership the sole mechanism of affordable housing. The problem, as Mr. Brown sees it, is "subprime lending practices, the global securitization of bad paper and all the other strategies to everyone with a pulse into a home they might not be able to afford worked those angles to the max." This, as it turned out, was really, really bad idea. While home ownership is certainly a worthy goal but in the post-Great Recession world, home ownership should be grounded in be able "To make living and working in a highly desirable community within reach of the broadest possible range of incomes."
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Youngstown, Ohio
city-daa.com |
How do we begin to address housing affordability? This task requires comprehensive strategies, including those specific to neighborhood locations, transportation options, energy costs, zoning and building codes, and anything affecting household budgets. What Mr. Brown is implying is that if money can be saved in any of these categories, it can translate into money saved in mortgage or rent payment. Thus, he asks "...why calibrate community affordability exclusively on the basis of price per square foot?" There is a sense of urgency regarding this issue. Housing affordability is related to the issue of income inequality. Richard Florida continuously emphasizes "the gap between demand and supply of housing at the right points and in the right places:
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Richard Florida
mocoloco.com |
Indeed, what we're currently going through is not a typical housing cycle, but what I've termed a 'great reset.' The reset includes increased demand for housing in large dynamic metros-especially knowledge-based ones-slack demand in older metros and exurban locations, and increased demand for locations at or near the urban core and walkable suburbs serviced by transit.
By "reset," Mr. Florida includes "a shift from homeownership especially in highly priced, dynamic markets on the East and West coasts. The rate of homeownership has been falling since the crisis, and in some of the densest and pricier metros, it's already below 60 percent."
Thus, instead of mourning the death of the great American Dream of owning your own home, perhaps it is time to rethink it. As Mr. Florida puts it:
This shift from homeownership to rentals can be a good thing. My own research indicates that metros with the highest rates of homeownership (say, in excess of 60 to 80 percent) also the most sluggish rates of innovation, productivity and economic growth, while metros in the range of 55 to 60 percent homeownership have faster rates of innovation and growth. A balance between renters and homeowners, then seems to provide the flexibility of housing types needed to support dynamic economies.
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Rowhouses
globalhiphopbattles.com |
To phrase it in more comprehensive matter, "affordability is an issue for not only those whom we tend to see as customers for affordability programs and projects-the poorest among us. It's about expanding choice for the majority, including those with middle class status and membership in the two largest generations in history, Boomer and Millennials." There has been plenty written and said about the impact of Baby Boomers (people born between 1946 and 1964) deciding to down size into condominiums and apartments or live out their days in their homes. Ben Brown speculates that aging in the suburbs, in the post-Great Recession era, will be tough given the potential impact of the younger generation on the supply and demand for housing.
What we are seeing is a glimpse into the future. Demographic shifts and residual economic pressure from the recession will, most definitely challenge communities to accommodate the "great reset" that Mr. Florida predicts. This is further complicated by the inaction in the hall of Congress and capitals which means it is highly unlikely we are going to experience sweeping new policies together with billions of dollars in new funding for infrastructure and planning. In short, no miracle cure is forthcoming anytime soon. Municipal governments, businesses, and citizens are left with the job of developing and executing low-budget strategies to deal with housing affordability that responsive, comprehensive, and replicable. Where do we start?
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Doe Mill
Chico, California
bettercities.net |
In the July post of the popular "Better Cities & Towns"
(http://www.bettercities.net), Rob Steuteville focused attention to a multi-family project in Chico, California by Anderson Kim Architecture + Urban Design and developed by Tovey Geizentanner of Chico Green line Partners. The development is a four building, twenty-two unit residential project that occupies a Traditional Neighborhood Development called Doe Mill and has been in process for the last fifteen years. Anderson Kim are well regarded among the New Urbanist circles who drew attention to the site planning and architectural details their peers admire. However, what drew Mr. Steuteville to the project was its context: suburban sprawl a distance from Chico's walkable downtown.
Why Chico, the most populous city in the northern Sacramento Valley? According to Ben Brown, Mr. Steutville argues that what makes this particular city a worthy example:
is its strategic opportunity. Demand will drive development in Doe Mill's direction. By getting a lot of other stuff right-including aligning affordable scale with design worthy of high-end, mixed-use infill in town-the designers and developers established a standard for future growth along the same corridor:
Rather than contributing to the sprawling character of this area, these buildings help set a new pattern. The retrofit of our suburbs will be an important land use and planning task in the coming years, and the completion of Doe Mill gives Chico an example of how to do better.
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Doe Mill parcel map
bettercities.net |
Doe Mill is also a case study of what is required in the post-Great Recession era, in order to accomplish what John Anderson, a partner at Chico Green Line, refers to as "ROBD, Return on Brain Damage." That does not sound too nice. Actually, according to Mr. Anderson, "For the local or regional developer,..., there are already enough regulatory, financial and project management obstacles to threaten solvency. Best to pick places and projects that match developers' capacities and leave the complex resource-draining projects to big firms with the staffs and overhead margins to compensate for the headaches." This makes sense, local and regional developers working and smaller less resource-draining projects would be a better more efficient way to create a range of affordable housing in a particular community without the mind-numbing complexities of a large-scale development project.
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Townhouse apartments complex in Doe Mill
Chico, California
townhousecenter.com |
Another reason to be selective about neighborhood development opportunities outside the urban cores is "...opportunities most often present themselves in places that make up the majority of America's landscape from historic streetcar suburbs all the way to the totally sprawled-out, totally car-dependent developments that still count as urbanized areas in the U.S. Census" If we harken back to the Richard Florida statement near the top of the post, we can read it as smaller outlying cities and towns, like Chico, offer the greatest opportunities for new affordable housing development that more heavily developed areas do not.
Part of the strategy of creating an affordable community at Doe Mill is the expansion of walkable mixed use and transportation options to the suburbs. Another component is the addition of residential affordability, such as rental affordability, in more up-scale neighborhoods where the attraction of amenities like transportation and walkability have driven housing costs out the realm of possibility for low- and middle-income families. Yet in the more desirable urban neighborhoods, the challenge of affordability has more to do with managing costs and what Mr. Anderson describes "as the brain damage-of politics and permitting." The more attractive infill site, the more likely the resistance from well-organized, politically connected groups who would rather the property remain undeveloped so as to limit the ROBD for property owners and developers rendering the whole enterprise impractical.
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Cover for Pocket Neighborhoods
amazon.com |
The key to successful small scale development, according to Ross Chapin the author of
Pocket Neighborhoods Creating Small Scale Community in a Large Scale World, is standout design. Mr. Chapin pioneered small scale development, "pocket neighborhood" development in the Pacific Northwest and is an expert in demonstrating "...how well-planned and executed clusters of small-scale housing can not only overcome resistance to density and predispositions about the inherent value of bigness, they can command a premium in a local real estate market." How is this possible? While sterling design is a requirement, it is not enough to achieve successful infill affordability. Ask the the people affect by Hurricane Katerina in 2005.
The devastating hurricane produced an immediate need to suspend business as usual in the worst hit areas of Mississippi
and Louisiana. The Katerina Cottages and their impact on FEMA's one-off experiment with alternatives to their trailers at
http://www.fema.gov./pdf/about/programs/ahpp_al_study.pdf
and Louisiana. The Katerina Cottages and their impact on FEMA's one-off experiment with alternatives to their trailers at . From this came Cottage Square in Ocean Springs, Mississippi, the brain child of architect Bruce B. Tolar. Cottage Square was an adjacent community of, first, rental cottages, the single-family residences elevated above the flood zone in Pass Christian, Mississippi. This lovely neighborhood totaled seventy units, in close-in locations where residents could get by without cars if they chose to do so.
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Cottage Square
Bruce B. Tolar
Ocean Springs, Mississippi
placemekers.com |
Currently, Mr. Tolar is a design consultant in the post- Hurricane Sandy communities of New Jersey, growing a support network that had enabled exemplars of appealing, affordable infill development that is likely to stand for a way to refine and expand housing strategies in the future. To expand beyond the Cottage Square model, Mr. Tolar teamed up with a regional non-profit Mercy Housing and Human Development, and a New Jersey based developer. Each brought a skill set and connections to plot a course through the financial, regulatory, design and construction challenges that could individually overwhelm the partners. At present, Mr. Tolar is working with a national non-profit Next Step to take the public-private lessons learned at the New Jersey Shore and apply it on a larger scale.
Ben Brown speculates and yours truly concurs, that a public- private maybe the way to get real estate development consciously uncoupled from outdated ways of doing business and future. It will be a slow and painful transition, especially in places where affordable housing is in great demand. In this day and age, there is no denying the fact that housing affordability is one of the obstacles to income equality and overall economic recovery. What happens next will have broad implications for the future.
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