I have been reading recently about the woes of public housing in New York and innovation in Los Angeles. I began to wonder about the housing situation in Raleigh. Granted the size of the housing problem in Raleigh is small compared to either New York and Los Angeles, but the problems are just as real to the individuals facing them. How can we learn from the history of public housing in other cities and what can we draw from their current efforts?
Couldn’t people just move to places they can afford? I’ve done that my whole life.
It’s a quality of life issue I think. Yes, live where you can afford but then we’ll have greater mobility challenges. Plus, if we have concentrated areas of higher incomes versus lower, we run the risk of the city becoming very divided as, typically, the higher incomes will have more political clout and continue to benefit themselves versus all areas.
That’s a small response on a big topic but I tried to be brief with my thoughts. I’d like to see Raleigh strive for mixed-income communities throughout.
I just bought a home in East College Park and it’s a part of the city’s affordable mixed income affordable housing community. 60 percent is earmarked for moderate income and the other 40 percent of houses are at market rate. Raleigh needs more hoods like this. I’m excited to be building a new house inside the beltline minutes from downtown. Cool opportunity.
So why would a developer build say s 5 story building with a total of 20 equally sized apartments/condos/townhouses and charge 5 for $100,000. 5 for $200,000. 5 for $300,000 and 5 for $400,000? How would that really work? Do you tell those person/s buying the ones $200,000 and under that you as a buyer they can’t earn more than a combined $55,000 a year?
If I understand it right, different people will see different prices. It looks like some authority (for Wake County, it’s the landlord) decides whether you qualify for affordable housing -and the number that’s appropriate for you is probably the number you’ll see.
With your example, the people who qualify for the $100k house or a $500/mo apartment will see the cheaper price. If you’re recognized to be able to afford that $400k unit, then that’s the number you’ll see.
Developers may not be too happy with this, of course (I mean, why wouldn’t you charge all 20 units for $400k? #capitalism). That’s why incentives try to encourage developers to do so, and town/county ordinances exist to do it by force.
As unpopular as it is nowadays, I’m am old schooler who simply says, “as heartless as a market driven economy can be, just let it play out.” There is a reason I don’t live in the Governer’s Club. I cannot afford. I hope a developer would build a million dollar mansion for me and only charge me 200k. But… So, I live where I can afford it.
I agree, it is a quality of life issue and one we must face as a growing city. If we allow the market to rule, then we have contributed to our own downfall as a community.
This assumes the market is working correctly, which it is not. The number of housing units being built is artificially limited by zoning restrictions and NIMBYism, which creates a shortage of housing. The end result is there are people who can’t afford a place to live anywhere in the metro area. This leads to an increase in problems like homelessness. If you’ve been paying attention to the situation in San Francisco and Seattle, you know homelessness is exploding there and the situation is quite bad. I’m sympathetic to your point of view (I mean, I’m getting an MBA), but when markets aren’t delivering the desired outcomes, we need to either redesign the market and/or come up with non-market solutions.
It’s not so simple. The problem isn’t that people of a certain income want to live in a certain neighborhood, it’s that they can’t find anywhere to live in the county. That’s leading to homelessness, as illustrated by this op-ed. https://www.newsobserver.com/opinion/op-ed/article172287507.html Whether or not you think people SHOULD do something different is beside the point, because we know this kind of housing shortage leads to certain outcomes, and we aren’t going to change that, so if we want to avoid the situation in places like Seattle, we need to address the root cause. We need to build more income-restricted housing and encourage more market rate.
Yes, to qualify for the subsidized rate and then the city pays the difference to the developer. There’s also a 10 year deed restriction. There’s more to it also but that’s the basics.
Here’s how I try to explain development, from the 10+ years I’ve been following it in Raleigh, to people who want to chat about my perspective.
Simply put, we have three variables here: 1) Market Preference (what do people want to buy/rent) 2) Finance (how easily developers can get/spend money) 3) Local Regulations (zoning, ordinances, etc)
#1 and #2, can’t change that, that’s market-driven stuff.
There’s an opportunity for us to play with #3 however, to create incentives, to actually help developers build what the community identifies as needs. If we need smaller units that are more affordable (the relative affordable, not Affordable) then how can regulations encourage that?
Maybe you fast track a project if it includes affordable units. Wave fees. Get more generous setbacks, height, etc. These things make developers rethink their plans.
Like any business, developers need to pay bills and you can’t blame them for building the safest investment they can, which is typically higher-cost housing that meets all the rules set by Raleigh planning. (directed by council in the background)
ALL developers I have met are ready to build a diversity of housing but if they did it, they would be at a market disadvantage under current code. Who wants to take the first RISKY step? I wouldn’t. I’m sure you wouldn’t either. I think it’s important to understand this.
If we can’t have this conversation at the council level than I’m going to support as many luxury units as possible because at this point, I just want raw housing supply to try to offset rising prices because of shrinking supply.
Instead of an area ITB that will be more expensive… do you think an alternate solution may be to create a community within proximity outside the beltline? Maybe create a community that has a central transportation hub with buses and taxis? That way everyone in that community will be able to easily get to the transportation and just a quick 5-10 min commute into the hubs downtown? Just thinking out loud of another solution. I certainly agree creating housing for all is a must!.. however… having to have it in “ideal areas” isn’t always a must… it would be nice… but not a must. Ex. The beautiful, one of a kind to Raleigh… sir walter on Fayetteville St… of course the people that live in there need a place… of course we don’t need to develop plans for that building without a relocation plan… but since they can’t be there… in that spot… we can’t do anything?? Doesn’t make sense to me. There has to be solutions that work for everyone. Just my opinion.
Transit and housing affordability are intricately linked. I could not agree more that we need to develop denser housing in outlying areas, but we still have the same issues. People in outlying areas are just as likely to protest against affordable housing, and considerably more likely to protest against higher density than people ITB. There are a lot of people who move to outlying suburbs because of the lower density there, and they don’t want apartments or townhouses being built nearby. That’s why we elected this reactionary city council, in fact.
In 2009 I moved into my current house in Idlewild. Across the street I came to know a young couple who were able to afford their house only because their mortgage was subsidized by a City of Raleigh affordable housing initiate. Great so far. Some time later the husband found a new job out of state forcing the family to sell the house. In accordance with the affordable housing agreement most of the profits from the sale went back to the city but the house moved to market rate.
This affordable housing initiative helped for a time but this modest 1294 SF house was recently snapped up just one day after being listed for $394K or $319/SF because the city was unable or unwilling to stay involved long term. @Scooter, do you know what the long term plan is for the 60% of homes in College Park earmarked for “moderate income” families? Will this initiative actually help solve the affordable housing problem long term or will this be another case of the proverbial can being kicked down the road?
In my mind building modest “affordable” homes in highly desirable areas such as near downtown Raleigh eventually results in the bidding up of these small (formally affordable) properties because there are those with means who are more than willing to sacrifice living space for location.
The way I saw things unfold in Idlewild is that back in 2009 the neighborhood was “in transition” with a dire need for some help to get things moving in the right direction. This initiative for affordable housing improved the situation and eventually led to a better outcome for the neighborhood by many measures but keeping the neighborhood affordable unfortunately wasn’t one of them.
@Stew you make some great points and I really enjoyed your comment. I’m not sure what the long term Is for the 60 percent who bought at market. They are under no deed restrictions so in theory I think they could just sell at any time to anyone at whatever the market demands, which, unfortunately will not be an adfordable price I know. It may be a little can kicking. I hope it stays mixed income and most of the 60 percent don’t just buy and sell. My builder said I’m his only “affordable” build so far and his other six buyers are all buying at the “subsidized market rate” so I have no idea what they are going to do. Again, I hope the neighborhood stays affordable.
I believe this is where transit comes into the argument.
Unfortunately car ownership and it’s attendant costs are almost mandatory these days - particularly for families with small children.
If transit went our further, was far more frequent and reliable as well as placing daycares, schools and doc-in-the-box’s on the routes – then car ownership wouldn’t be a huge chunk of the family budget.
If a growing community wants low skilled workers to service them that it behooves that community to account for them in the various equations.
But then it’s also the “grow or die” argument – if you’re not growing your dying and that is the real shame.
The rust-belt town I grew up in has had to close schools, turn a wing of the hospital into a senior facility, contemplate what to do with a dead mall and the architecturally significant houses close to town are ridiculously cheap.
There doesn’t seem to be much in-between the grow or die models.
My two cents.
You bring up my point as well; Of course we can let the free market establish housing prices, but inflation is inflation. If the cost of housing continues to rise and low wage workers continue to get pushed further and further from the city, then a low wage labor shortage will form in the city, which will force businesses to raise wages to maintain a labor force, and consequently raise prices of goods and services to remain competitive and profitable. With unattainable/unaffordable housing comes inflation of basic goods and services, and poof, there goes one of our prized city amenities, reasonably low cost of living.
“Couldn’t people just move to places they can afford? I’ve done that my whole life.”
You can only do that so much though. For example, I know someone who lives way out near 540 and even there, her apartment rent goes up every year, while her salary isn’t. She works downtown and already deals with a fairly long commute due to traffic, finding parking, etc. So she’s supposed to move even further out? Seriously?? This is an unsustainable trend, y’all. There has to be some give.
@evan.j.bost @Robert1977 I agree with your points and the city needs be proactive here, but they won’t ever be able to have affordable housing keep up with the pace of new service jobs downtown. That’s not saying they shouldnt at least have SOME. But this underscores the real need for reliable, efficient transit and reaches out to areas outside of the downtown.