When did governments shift the burden for funding affordable housing?

[C.]

Whenever a new development is proposed, it's expected these days that the developer must set aside 10-40% of the units for affordable housing, even if it's multi-million dollar condos in a skyscraper. If they do not, the lack of affordable housing becomes a rallying call for city planners, NIMBYs and affordable housing advocates alike.

This wasn't always the case. Affordable housing use to be the responsibility of the government. In other words, federal, state and local taxes would support the creation of affordable housing along with providing subsidies for the ongoing operations and maintenance expenses.

It's been a smooth transition as the government has decreased funding and has pushed the responsibility to developers. This is done through the zoning code or through a negotiated process with the local city councilor.

One of the reasons why housing is so expensive now is that the market rate purchasers or renters are in effect subsidizing the units set aside from affordable housing.

While I'm a big believer of having mixed income communities, putting affordable housing in a "luxury" building is probably not the best idea for the simple reason that more people could be housed in a more modest building without all the useless amenities thrown in for marketing. There is nothing wrong with the municipal pool down the road if someone wants to go for a swim. However, it seems like each building now days has their own pool or gym, which just increases the construction and maintenance cost, let alone the sky-high insurance rates that come from insurance. This makes the final product less affordable.

When did we let governments skirt their responsibility for providing affordable housing and shift the burden of funding to private developers and the occupants of new buildings that can afford the market rate?

[mhays]

Here's the worst part. It's not just the non-subsidized residents of the new buildings who are paying extra. The entire rental market is priced in relation to development costs. So you're building maybe 1,000 additional affordable units per year metro-wide, but 500,000 households are paying the price.

It's almost like landlords wrote the legislation. They own a scarce resource, and made competition much harder.

We can support low-income and affordable housing much better by spreading the taxes to everyone, so we're not disincentivizing new supply, our best weapon. And we can streamline permit processes, reduce/eliminate parking requirements, allow smaller micros, broadly upzone, etc., for large-scale structural resetting of development prices. Developers will compete based o price at the lower levels as they do today, and we might even avoid the scarcity premium in most places.

[MAC123]

Originally Posted by mhays

Here's the worst part. It's not just the non-subsidized residents of the new buildings who are paying extra. The entire rental market is priced in relation to development costs. So you're building maybe 1,000 additional affordable units per year metro-wide, but 500,000 households are paying the price.

It's almost like landlords wrote the legislation. They own a scarce resource, and made competition much harder.

We can support low-income and affordable housing much better by spreading the taxes to everyone, so we're not disincentivizing new supply, our best weapon. And we can streamline permit processes, reduce/eliminate parking requirements, allow smaller micros, broadly upzone, etc., for large-scale structural resetting of development prices. Developers will compete based o price at the lower levels as they do today, and we might even avoid the scarcity premium in most places.

"reduce/eliminate parking requirements" This should be the case in Manhattan. Just get rid of the parking requirements entirely. The other boroughs (and other cities for that matter) can hang on a little longer because they don't have nearly the transit that Manhattan does (hopefully will be changing as time goes on) but it should be eliminated in Manhattan.

[llamaorama]

There is nothing wrong with the municipal pool down the road if someone wants to go for a swim. However, it seems like each building now days has their own pool or gym, which just increases the construction and maintenance cost, let alone the sky-high insurance rates that come from insurance. This makes the final product less affordable.

This makes me think of a project in Fort Worth.

So for background info, apparently following an "austerity" style budget after the 2008 recession, Fort Worth despite having nearly a million residents decided to close all but two municipal pools. There is now just one on the south side (an olympic sized lap pool w/ diving boards) and for the north side (a family pool with slides and sprayers and stuff). Then they later subsidized a YMCA but the pool is accessible to the public so technically it counts as a 3rd facility, and there's an indoor pool owned by Tarrant County as well.

Now, finally, after a decade, the city has an upcoming bond issue in May 2022 which will fund many things such as roads, drainage, fire stations, police facilities, etc and will also have for the parks system money to build a new city swimming pool on the east side of town. It will be part of a very expensive community center which will have everything you could think of.

The community center is of course part of an affordable mixed income development. The mixed income development will have, as you might have guessed, it's own pools and own amenity centers. Because it's intended to have market rate units and that's what those come with.

[mhays]

Originally Posted by MAC123

"reduce/eliminate parking requirements" This should be the case in Manhattan. Just get rid of the parking requirements entirely. The other boroughs (and other cities for that matter) can hang on a little longer because they don't have nearly the transit that Manhattan does (hopefully will be changing as time goes on) but it should be eliminated in Manhattan.

It's already the case in at least selected parts of many cities beyond the downtowns.

Developers obviously try to hit the sweet spot between saving money and having enough for the predicted demand. And many specifically target lower price points by having none.

[llamaorama]

To be fair, low income housing in sunbelt cities is going to need parking.

For that matter, homeless people often need parking because many people falling into hardship due to factors outside their control who are evicted or temporarily without a place to live would be better off if they didn't have to sell their paid-for and working car and be stuck with a paltry sum of money that's of less utility than transportation to a job and storage for their remaining belongings.

[edale]

Originally Posted by mhays

Here's the worst part. It's not just the non-subsidized residents of the new buildings who are paying extra. The entire rental market is priced in relation to development costs. So you're building maybe 1,000 additional affordable units per year metro-wide, but 500,000 households are paying the price.

This. I wish more people understood this point. It's hard enough to make new construction somewhat affordable to the middle class given land, material, and labor costs, but when market rate units also have to subsidize the 'affordable' ones, it becomes basically impossible. Then we get housing for the rich and the destitute, and the rest of us get screwed.

[ue]

In Canada, it happened in the '90s under the Chretien government. The federal government absolved itself of any further funding of public housing and only paid into existing agreements until they expired. There have been federal grants and such since, but the maintenance and construction falls on provinces, cities, and organizations.

[ardecila]

Originally Posted by C.

When did we let governments skirt their responsibility for providing affordable housing and shift the burden of funding to private developers and the occupants of new buildings that can afford the market rate?

In the US, the 1960s began with a ton of optimism about public housing and saw the construction of highrise projects in many cities. The decade closed with many cities in ruin, for many reasons, including the projects that had just been built. Republican elites had always been against public housing, but now more Americans started to sour on the idea too as the projects were engulfed in violence and decay.

The involvement of the private sector began in the early 1970s when Nixon put a moratorium on new public housing projects, and launched a pilot project to provide housing vouchers to the needy instead so they could rent from private landlords. In 1974 this was formalized with the creation of Section 8. Nixon lifted his moratorium in 1974 also, but the damage was done. A couple large public housing projects were built through the 70s but pretty much ended by 1978.

The 80s didn't see much construction of subsidized housing because of Reagan, but what did get built was scattered-site housing, mostly small buildings of low quality scattered through existing low-income neighborhoods. Since these were poorly-built, a lot have been torn down leaving no trace.

The 90s had HOPE IV, where the Federal government funded the teardown of the original 1960s projects to be replaced with cutesy New Urbanist lowrises, usually with front porches and stoops. During this time, Congress passed the "Faircloth Amendment" which freezes housing agencies at the number of apartments they had in 1999. They can't ever build more (although many housing agencies currently are under their limit).

One of the developments in the last 20 years is inclusionary zoning and mixed-income, where cities require developers to set aside affordable units in market-rate buildings. The amount of the set-aside varies by city and isn't coordinated by the Federal government.

[SIGSEGV]

I guess the national public housing museum is supposed to open next year? (is it still?)

[jd3189]

Based on what I knew and read so far in this thread, it seems as though the Republican administrations that were involved in decreasing funding for public housing may have partially believed that the market was going to solve the housing problem. But the private sector is mainly concerned with making a profit off housing, not supplying it as a human right.

Similar to the issue with the mentally ill/ asylums, if the government does look back into funding public housing, it should also look into ways to prevent or mitigate the urban decay and violence that plagued many of these projects. It would do us well to have the government cover affordable housing for those below the poverty line. The free market can then cater towards not only the high median income bracket and above, but also the rest of the middle class up to right above the poverty line.

[eschaton]

Originally Posted by jd3189

Based on what I knew and read so far in this thread, it seems as though the Republican administrations that were involved in decreasing funding for public housing may have partially believed that the market was going to solve the housing problem. But the private sector is mainly concerned with making a profit off housing, not supplying it as a human right.

Similar to the issue with the mentally ill/ asylums, if the government does look back into funding public housing, it should also look into ways to prevent or mitigate the urban decay and violence that plagued many of these projects. It would do us well to have the government cover affordable housing for those below the poverty line. The free market can then cater towards not only the high median income bracket and above, but also the rest of the middle class up to right above the poverty line.

I mean, if we're talking about the issue more broadly, the trajectory is basically this:

Up until the New Deal, public funding wasn't needed to create housing for the poor, because it was legal to build extremely low-quality homes. There was a lot of public outcry due to this, because the homes were not just a danger to the residents, but also a danger to the broader city. They were fire-traps, bad sanitation bred disease, etc.

So the U.S. developed the first residential building codes as part of the New Deal, which made it so that unsafe housing could no longer be made. However, it meant that the free market could no longer provide for low-income housing. So government-subsidized residential housing quickly became a thing.

There is really only one other way that low-income units get generated now besides government funding, and that is depreciation. Essentially, let the value of older/dated housing drop to the point that it's affordable. To some extent this is inevitable if enough new housing is created (which typically never happens) but to actually create affordable historic units you have to actually destroy neighborhoods and turn them into blighted ghettos - something which happened by accident in many cases, but not on purpose. And quite honestly, if there was the same level of supervision of Section 8 units in older buildings as new build, these sort of units wouldn't even exist today.

[mrnyc]

speaking of private housing for the poor, one safety valve housing level, s.r.o.'s, are all but gone -- and the problem is the back to the city movement and other misguidedness pressured it's elimination.

however, s.r.o's sort of came back defacto recently when empty hotels were used to house people during covid:


As Ted Houghton, president of Gateway Housing, a nonprofit that advises on affordable housing and shelters, frames it: “In the middle of the 20th century, we screwed up by letting so many SROs disappear. The distress of the pandemic gives us a chance to fix that mistake.”

...

SROs (single room occupancy), where people could rent a small, cheap private room (often with a shared bathroom), no questions asked, used to be commonplace.

...

Circa 1950, the number of single-room-occupancy beds in New York peaked at around 200,000.

...

“We knocked out a couple of rungs of the housing ladder,” explains Roseanne Haggerty, the MacArthur-winning housing activist


so there is some call to bring them back:

https://www.curbed.com/2021/06/sro-h...ring-back.html

[wwmiv]

Originally Posted by mrnyc

speaking of private housing for the poor, one safety valve housing level, s.r.o.'s, are all but gone -- and the problem is the back to the city movement and other misguidedness pressured it's elimination.

however, s.r.o's sort of came back defacto recently when empty hotels were used to house people during covid:


As Ted Houghton, president of Gateway Housing, a nonprofit that advises on affordable housing and shelters, frames it: “In the middle of the 20th century, we screwed up by letting so many SROs disappear. The distress of the pandemic gives us a chance to fix that mistake.”

...

SROs (single room occupancy), where people could rent a small, cheap private room (often with a shared bathroom), no questions asked, used to be commonplace.

...

Circa 1950, the number of single-room-occupancy beds in New York peaked at around 200,000.

...

“We knocked out a couple of rungs of the housing ladder,” explains Roseanne Haggerty, the MacArthur-winning housing activist


so there is some call to bring them back:

https://www.curbed.com/2021/06/sro-h...ring-back.html

Extended stay hotels fill a small bit of the hole left by the absence of SROs.

[Handro]

The government and businesses share the cost of providing people food, shelter, healthcare, etc. It's disingenuous to point out public housing but not bring up other generalized welfare for people not earning a living wage working full time jobs. If the government decided to require adequate COLAs to the minimum wage, a lot of the need for affordable housing would be eliminated, but... lmao. In an advanced capitalist society, the government and private enterprise are, for better and usually worse, partners. The issue of requiring private developers to provide affordable housing cannot and should not be viewed in a vacuum.

[jmecklenborg]

Originally Posted by ardecila

The 90s had HOPE IV, where the Federal government funded the teardown of the original 1960s projects to be replaced with cutesy New Urbanist lowrises, usually with front porches and stoops.

I believe that HOPE IV had its funding cut under the Bush administration, which is why there is vacant land to this day in some HOPE IV developments - many of them right next to valuable downtowns. For example, all of these vacant lots in Cincinnati's West End, where construction ceased around 2006:
https://www.google.com/maps/@39.1113.../data=!3m1!1e3

Section 8 destabilized many neighborhoods in my home city. They went into free-fall in the late 90s/early 2000s and many, many, many homes went vacant and were demolished. Here we are in the early 2020s and out-of-down developers are fighting over the vacant lots and flipping falling-over houses that would have been bulldozed as recently as 2017.

[eschaton]

Originally Posted by Handro

The government and businesses share the cost of providing people food, shelter, healthcare, etc. It's disingenuous to point out public housing but not bring up other generalized welfare for people not earning a living wage working full time jobs. If the government decided to require adequate COLAs to the minimum wage, a lot of the need for affordable housing would be eliminated, but... lmao. In an advanced capitalist society, the government and private enterprise are, for better and usually worse, partners. The issue of requiring private developers to provide affordable housing cannot and should not be viewed in a vacuum.

Adequately addressing supply issues by eliminating constraints on new residential construction should be able to address the housing needs of the working poor, if we're talking about something like a $15 minimum wage.

However, you would still need to have subsided housing for the non-working poor.

[pj3000]

Originally Posted by C.

One of the reasons why housing is so expensive now is that the market rate purchasers or renters are in effect subsidizing the units set aside from affordable housing.

Not really. Most developers of larger projects, which in many locales may require a certain percentage of "affordable" units, are receiving subsidy in one from or another to include affordable units in their developments.

There are multiple funding sources via outright grants, low-interest loans, and tax credits for private developers to utilize state, federal, and non-profit/foundation programs that guarantee capital to fund affordable housing.

Multifamily developers do not need to be "made whole" by market rate payers. That's just pure margin.

[C.]

Originally Posted by pj3000

Not really. Most developers of larger projects, which in many locales may require a certain percentage of "affordable" units, are receiving subsidy in one from or another to include affordable units in their developments.

That is most definitely not true for the majority of development in the United States and Canada.

There are multiple funding sources via outright grants, low-interest loans, and tax credits for private developers to utilize state, federal, and non-profit/foundation programs that guarantee capital to fund affordable housing.

But what percentage of new housing takes advantage of these funding sources, while they do exist, are not as prevalent as you think. Maybe 5%, depending on the market.

[the urban politician]

To the OP:

This didn’t start just now

Rent control, which has been around for at least 80 years, is in effect the exact same thing.