Housing is the largest single expense for the average American
May 16, 2019 10:33 AM Subscribe
The high cost of housing – especially of rental homes – is an urgent public policy crisis and a golden political opportunity for progressive candidates and policymakers willing to show leadership. The Data for Progress Homes for All report lays the groundwork for a truly progressive housing policy capable of ending the crisis, as a guide to policymakers and voters alike. (PDF)
We have a land trust model in Philadelphia but it is hamstrung by corruption.
Also, the PHA has a "scatter sites" program which puts PHA units in rowhomes so that they are integrated into neighborhoods. There are a few on my block and I love it.
posted by grumpybear69 at 11:51 AM on May 16, 2019 [1 favorite]
Also, the PHA has a "scatter sites" program which puts PHA units in rowhomes so that they are integrated into neighborhoods. There are a few on my block and I love it.
posted by grumpybear69 at 11:51 AM on May 16, 2019 [1 favorite]
This looks thoughtful and good.
I'm a little sad to see them adopt the 30% of income bar without question, though. It doesn't seem to have a basis in anything quantitative, as far as I can tell. It doesn't make much sense, if you assume quite a few other significant costs of living are fixed and income-independent. In my limited experience it's most often used as an excuse for property management companies and landlords to turn down otherwise qualified poor clients. I've yet to see anyone benefit from the concept.
posted by eotvos at 12:17 PM on May 16, 2019 [2 favorites]
I'm a little sad to see them adopt the 30% of income bar without question, though. It doesn't seem to have a basis in anything quantitative, as far as I can tell. It doesn't make much sense, if you assume quite a few other significant costs of living are fixed and income-independent. In my limited experience it's most often used as an excuse for property management companies and landlords to turn down otherwise qualified poor clients. I've yet to see anyone benefit from the concept.
posted by eotvos at 12:17 PM on May 16, 2019 [2 favorites]
Certainly there are lower-income people who right now don't have an option except housing that costs 50% or more of their income, but I am puzzled how you would possibly help anybody by adopting that as fine and normal. Not that I know if there's data for the 30% specifically, but spending 50% of your income on housing is a great way to wind up without housing during a period of short-term unemployment or disability. This is explicitly not saying that people should just not have housing if they can't get it cheap enough; you put the plan in place to get more affordable housing built, but you provide the actual rent relief immediately through subsidies rather than just promising people it'll get better someday later.
The problem with landlords using it isn't, IMO, the specific number that they use. Any cutoff is fine if you have plenty of other, cheaper options that still provide adequate housing; no cutoff is equitable if the affordable housing below that line doesn't exist.
posted by Sequence at 1:15 PM on May 16, 2019 [7 favorites]
The problem with landlords using it isn't, IMO, the specific number that they use. Any cutoff is fine if you have plenty of other, cheaper options that still provide adequate housing; no cutoff is equitable if the affordable housing below that line doesn't exist.
posted by Sequence at 1:15 PM on May 16, 2019 [7 favorites]
In the US, people who hit bottom first become homeless, most other places (without a safety net) people first go hungry. I'm not sure which is worse.
posted by 445supermag at 2:59 PM on May 16, 2019 [1 favorite]
posted by 445supermag at 2:59 PM on May 16, 2019 [1 favorite]
The 30% rule has roots in the 1969 public housing regulations (originally 25%), I could understand people objecting to it if that was the minimum rent but it's the maximum.
If the rule was scrapped I think most rents would go UP not down.
from the report: There are considerable differences between a young single tech worker paying more than 30 percent of her income towards rent and a single-mother with two children doing the same.
So if we allow the tech workers to pay 50% of income in rent, how is the young single mother supposed to compete for housing?
posted by Lanark at 3:55 PM on May 16, 2019 [1 favorite]
If the rule was scrapped I think most rents would go UP not down.
from the report: There are considerable differences between a young single tech worker paying more than 30 percent of her income towards rent and a single-mother with two children doing the same.
So if we allow the tech workers to pay 50% of income in rent, how is the young single mother supposed to compete for housing?
posted by Lanark at 3:55 PM on May 16, 2019 [1 favorite]
Indeed, the rent is too damn high.
posted by snuffleupagus at 10:35 PM on May 16, 2019 [1 favorite]
posted by snuffleupagus at 10:35 PM on May 16, 2019 [1 favorite]
The housing crisis should prove once and for all that housing does not work like a proper market. The
incentives and costs of housing construction do not operate anywhere near what a classic Econ 101 supply/
demand model would suggest. If anything, it shows that developers and landlords benefit from housing
scarcity.
I think the evidence for this is pretty weak, and I think just throwing it out there (without tons of caveats that are literally listed in the paper why it is sort of true (exclusionary zoning, huge federal grants for certain types of housing, racist policies) is dangerous. The idea that 'developers' benefit from housing scarcity is too broad to be absolutely true. Some most certainly do, others are pushed out of the market and overall the residential construction market has dramatically shrank and wages have fallen through the floor (which is why mostly immigrants do it). It's like saying some artists benefit from MP3s being free.
I also think many of their statements would raise rents and increase speculation.
"One of the of the least appreciated tax advantages landlords have is claiming depreciation on their physical building while still benefiting from the increase in overall property value." Depreciation is only for the purchase price of the asset, it has nothing to do with the current value and land (which is what generally appreciates) cannot be depreciated.
"Removing the ability to write off the purchase price of a property, before a minimum of 5 years under one owner, to reduce the incentive to “flip” homes." --homes are generally straight-line depreciated for 27 years (equal payments over 27 years), so if someone is writing off their purchase price in 5, that should probably just be regular tax fraud. If they only want to take 5/27s of possible depreciation and sell, then I don't see the issue.
Also it seems to be making these changes to fight 'gentrification', but the amount of 'gentrification' vs regular decline in the US is not equal - and these rules would absolutely crush places in decline. The tax changes listed would also (generally) result in increased rental rates.
In my opinion, they should seriously just fix their top line issues, and then deal with stuff like tax rates and depreciation afterwards (which they won't have to because it will become mundane accounting non-issues).
posted by The_Vegetables at 8:13 AM on May 17, 2019
incentives and costs of housing construction do not operate anywhere near what a classic Econ 101 supply/
demand model would suggest. If anything, it shows that developers and landlords benefit from housing
scarcity.
I think the evidence for this is pretty weak, and I think just throwing it out there (without tons of caveats that are literally listed in the paper why it is sort of true (exclusionary zoning, huge federal grants for certain types of housing, racist policies) is dangerous. The idea that 'developers' benefit from housing scarcity is too broad to be absolutely true. Some most certainly do, others are pushed out of the market and overall the residential construction market has dramatically shrank and wages have fallen through the floor (which is why mostly immigrants do it). It's like saying some artists benefit from MP3s being free.
I also think many of their statements would raise rents and increase speculation.
"One of the of the least appreciated tax advantages landlords have is claiming depreciation on their physical building while still benefiting from the increase in overall property value." Depreciation is only for the purchase price of the asset, it has nothing to do with the current value and land (which is what generally appreciates) cannot be depreciated.
"Removing the ability to write off the purchase price of a property, before a minimum of 5 years under one owner, to reduce the incentive to “flip” homes." --homes are generally straight-line depreciated for 27 years (equal payments over 27 years), so if someone is writing off their purchase price in 5, that should probably just be regular tax fraud. If they only want to take 5/27s of possible depreciation and sell, then I don't see the issue.
Also it seems to be making these changes to fight 'gentrification', but the amount of 'gentrification' vs regular decline in the US is not equal - and these rules would absolutely crush places in decline. The tax changes listed would also (generally) result in increased rental rates.
In my opinion, they should seriously just fix their top line issues, and then deal with stuff like tax rates and depreciation afterwards (which they won't have to because it will become mundane accounting non-issues).
posted by The_Vegetables at 8:13 AM on May 17, 2019
From the San Jose Mercury News. The Price We Pay: Using an exclusive ZIP code-level analysis, we show how little most Bay Area families can afford — and how the housing crisis is transforming the region we call home (scroll down to see the article). The newspaper also has a Mapping Affordability calculator to help readers figure out where they can afford housing in the Bay Area.
San Jose has seen a 42% spike in homelessness, according to the same paper. Since I am not a subscriber, I cannot link to other recent articles about similar developments in San Francisco and the East Bay. This feels pretty personal to me. I might have become homeless if I hadn't left the state when I did. One of my friends has been couch surfing and home sitting for the five years I've known her. Another Bay Area friend became homeless last fall after he was evicted from his studio apartment, in Richmond, so one of the landlord's relatives could live there instead.
It's not like I have moved to a socialist paradise. I have affordable healthcare, thank goodness, but housing is not exactly affordable where I live in Europe. More affordable? Yes. Affordable? No. Many young families cannot stay in Stockholm; they go elsewhere or settle for tiny apartments that are perfect for one or two people but a serious stretch for a family of four. Every single thing about this topic enrages me. Including the fact that potentially useful approaches, such as Tiny Houses, are comparitively expensive choices often available only to middle-class and upper-middle class people looking to downsize or get closer to nature on land they own. While poor and disadvantaged people mostly cannot get access to such places because of city zoning laws and how the real estate market (such as mortgages) has not adapted much because it is less profitable to adapt. (In conclusion, everything sucks. Grrrrrr.)
I am happy about the post, OP. Thanks!
posted by Bella Donna at 10:34 AM on May 17, 2019 [1 favorite]
San Jose has seen a 42% spike in homelessness, according to the same paper. Since I am not a subscriber, I cannot link to other recent articles about similar developments in San Francisco and the East Bay. This feels pretty personal to me. I might have become homeless if I hadn't left the state when I did. One of my friends has been couch surfing and home sitting for the five years I've known her. Another Bay Area friend became homeless last fall after he was evicted from his studio apartment, in Richmond, so one of the landlord's relatives could live there instead.
It's not like I have moved to a socialist paradise. I have affordable healthcare, thank goodness, but housing is not exactly affordable where I live in Europe. More affordable? Yes. Affordable? No. Many young families cannot stay in Stockholm; they go elsewhere or settle for tiny apartments that are perfect for one or two people but a serious stretch for a family of four. Every single thing about this topic enrages me. Including the fact that potentially useful approaches, such as Tiny Houses, are comparitively expensive choices often available only to middle-class and upper-middle class people looking to downsize or get closer to nature on land they own. While poor and disadvantaged people mostly cannot get access to such places because of city zoning laws and how the real estate market (such as mortgages) has not adapted much because it is less profitable to adapt. (In conclusion, everything sucks. Grrrrrr.)
I am happy about the post, OP. Thanks!
posted by Bella Donna at 10:34 AM on May 17, 2019 [1 favorite]
So I've done the HUD calculations for the 30% of income for subsidized housing in which the goverment subsidy makes up the difference for the fair market rent value* (we were only able to rent up to a specified amount that was under the median rent value for a given zip code or city, it depended on the program) It's based off gross income, but also takes into account dependents, medical expenses and a utility allowance. HUD does include a floor of 10% I think, but our subsidies did allow for 0 income calculations at the time. I haven't done this in quite a few years though, so things may have changed. And not all programs are created equal.
posted by AlexiaSky at 7:37 PM on May 17, 2019 [1 favorite]
posted by AlexiaSky at 7:37 PM on May 17, 2019 [1 favorite]
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