Tag: low income housing

• The effects of low-income developments on house prices in Los Angeles

  

  Richard Voith and Jing Liu of Philadelphia-based Econsult, along with a bunch of other smart coauthors, have just published a working paper looking at the effects of the Low-Income Housing Tax Credit (LIHTC) on home prices. More specifically, they looked at the impact that LIHTC-financed properties have had in Los Angeles — both in low-income and high-income neighborhoods, as well as when it’s the first LIHTC development in the area or a subsequent one. Some of you might be assuming that low-income housing is likely to create downward pressure on home prices. But the authors found the opposite to be true. Below is the paper’s abstract. If you’d like to download a copy of the full working paper, you can do that over here.

  Abstract: While there is widespread agreement about the importance of the Low-Income Housing
  Tax Credit (LIHTC) in addressing the country’s affordable housing needs, there is less certainty about the effects of LIHTC-financed properties on their surrounding neighborhoods. A growing body of research has largely refuted the argument that affordable housing properties in and of themselves have negative effects on local property values and increase crime rates. Several key questions remain essentially unanswered, however. First, for how long do the observed spillover benefits of LIHTC construction last? Second, does the development of multiple LIHTC properties in a neighborhood have an additive, supplemental effect on surrounding conditions, or is there a threshold at which the concentration of such properties – and the predominantly low-income individuals they house – negatively affects the neighborhood?

  In this paper, we focus on Los Angeles County, a large, diverse urban area with significant affordability challenges. Drawing upon both public and proprietary property sales data, we conduct interrupted time series analyses to ascertain whether property value trends differed prior and subsequent to the introduction of a LIHTC-financed property in the community. We find that LIHTC properties positively impact surrounding housing values across the spectrum of Los Angeles’ neighborhoods. Further the concentration of multiple LIHTC properties in a neighborhood additively increases housing prices up to ½ mile away. Finally, these effects though of greater magnitude in lower-income neighborhoods, are fully present in high-income neighborhoods.

  Image: Econsult

  2020.11.12

• Uncreative and greedy

  There’s a narrative out there that all developers are uncreative and greedy, and if only they would start being more creative and generous, we could solve the housing affordability problem that is plaguing many (if not all) global cities. In other words, the solution to increasing the supply of low and middle incoming housing is simply a psychological reframing on the part of developers.

  The problem with this mental model is that it ignores reality. Development happens on the margin. The market is competitive. It’s difficult to find developable sites. And it’s a challenge to make projects work. More often than not, you have to say no as a developer. No I can’t buy this land. No I can’t build housing here. And no the market will not support new office space here. Sorry, but no. (See cost-plus pricing.)

  Development needs to give back. On the blog we usually call this city building. And that’s because it implies a greater sense of civic responsibility. Developers aren’t just building one-off buildings, they’re building a city. I believe wholeheartedly in this. But the belief that projects can be saddled with an endless array of government fees and civic contributions is a problematic one. There are limits — because markets have limits.

  If only city building were that easy.

  2019.11.27

• The density delusion

  Joel Kotkin and Wendell Cox recently published a piece in the Orange County Register called, “California’s housing crisis and the density delusion.” I’m sure you can guess where this is going, even if you don’t follow the work of Joel Kotkin. But if you do, you will know that he is an ardent supporter of suburbia and the single-family home.

  Here is an excerpt from the article:

  In reality, the YIMBY’s suggestion that new, dense housing will improve affordability for all is patently absurd. Decades of densification in Los Angeles has seen ever higher rents, displacing low-income, especially minority households. Many former transit customers have been driven to lower-rent areas with less transit service, precipitating a massive decline in ridership, even as billions continue to be spent building new rail lines. The Wiener Bill [my link, not theirs] could exacerbate this trend, and likely increase the need for low-income housing, already well beyond the capability of public coffers.

  I fully appreciate the argument that high-density housing isn’t for everyone and that we shouldn’t be “forcing everyone back to the ‘glory’ days of the city of tenements.” But I disagree with many of their points, including the argument that density doesn’t encourage transit ridership. Density isn’t everything, but it’s an important something.

  The article is definitely worth a read, particularly if you disagree with their positions. That’s how you avoid confirmation bias. I was trying to keep that in mind as I read it. Maybe it worked.

  2018.03.14

• NO TOWER on Commercial Drive

  For the past week or so I’ve been seeing the proposed Kettle Boffo Project in Vancouver make the rounds online. Here’s a rendering of the project, which is located at Commercial Drive and Venables Street:

  

  The reason it has been making the rounds is that a community group called NO TOWER (written in all caps) has come out in fierce opposition of the 5 to 12-storey building. They have over 3,500 signatures.

  As an outsider looking in, this is surprising. The scale of the project seems appropriate. The height roughly matches the existing building shown above to the right. It may even be lower. And the project will provide somewhere around 30 social housing units, as well as additional space for the Kettle Friendship Society non-profit, who are currently on the site. (Note: An application to the city hasn’t yet been made.)

  What this has me thinking about is the push and pull between bottom-up and top-down planning. 

  When architect Bjarke Ingels talks about his Dryline project in New York, he likes to refer to it as the love child of Robert Moses (top-down planning) and Jane Jacobs (bottom-up planning). In the case of this project, it’s because it’s a large infrastructure project that they are trying to root into the local neighborhoods. Makes sense.

  But this same thinking could also apply to overall city building. Local communities rightly have their own wants. But at the same time, cities need to be thinking about the overall. The challenge is finding that right balance.

  I would be curious to hear your thoughts on the Kettle Boffo Project in the comment section below – especially if you’re from Vancouver.

  2016.02.28

• Is inclusionary zoning a good or bad thing for cities?

  Today is Christmas Eve. It’s the season of giving. So I thought it would be appropriate to talk about affordable housing.

  Yesterday, Mitchell Cohen – who is a real estate developer and the president of The Daniels Corporation – wrote an opinion piece in the Toronto Star talking about just that. It was called: A perfect storm for action on affordable housing.

  Here’s a snippet that summarizes the things he believes we should be doing:

  Municipalities across Ontario also have significant tools at their disposal to make a difference. To date, these tools have not been co-ordinated to achieve maximum bang for the buck. Property taxes can and should be waived not only for affordable rental homes but for affordable ownership homes as well. Additionally, cities can and should waive all development levies and other municipal fees for affordable rental and ownership housing.

  Combined, these two measures provide municipalities with powerful leverage to implement inclusionary zoning — the most important tool in the affordable housing tool box. Inclusionary zoning on a city-wide basis creates a level playing field, an opportunity for a constructive partnership between municipalities and private sector developers to create both affordable ownership and rental homes within every new building approved for construction.

  For those of you who might be unfamiliar with inclusionary zoning, it’s essentially a zoning requirement to build a certain number of affordable units in any new construction project. It originated – as far as I know – in the US, but has been fairly controversial since the outset.

  So today I thought we could have a discussion on the merits of inclusionary zoning. Do you think it’s a good or bad thing for cities? Is it really the most effective way to deliver affordable housing at scale? Leave your thoughts in the comment section below 🙂

  I don’t have a strong view on inclusionary zoning, but I do believe that affordable housing and a mix of incomes is critical to cities and neighborhoods.

  I do, however, wonder if it’s one of those things that seems to make a lot of sense, but actually has a bunch of negative externalities associated with it. Maybe the answer is to just prototype the idea and then iterate on it.

  What do you think?

  2014.12.24