Blogging Bayport Alameda

April 21, 2016

That wouldn’t be enough

Filed under: Alameda — Lauren Do @ 6:01 am

A few days ago a columnist at Bloomberg posted an op-ed about the two housing affordability issues.  One would think that — by now — this is in “no duh” territory, but when you have folks appearing before the City Council affiliated with a group organized around a lack of affordable housing in Alameda asking that voters enact rent control to maintain an artificial level of affordability for a select number of people to say “don’t build housing here”, well, I guess it’s not so obvious.

From the Bloomberg piece:

The first problem is that some coastal metropolitan areas in the U.S. are generating lots of good jobs but aren’t building enough housing to keep up with employment growth. The main barrier to housing construction in these places is local regulation — zoning ordinances, environmental requirements, even affordable-housing rules.

The second housing affordability problem is less geographically limited, and more chronic: Millions of Americans can’t afford even the cheapest housing.

And:

If we built lots of new housing that poor people can’t afford, the thinking goes — and there’s economic evidence to back it up — that will make existing housing cheaper, and some of it will fall into a price range where some households making less than $32,000 a year can afford it. That’s how solving the first affordability problem can help solve the second one.

Some people do get help with the rent. About a quarter of eligible low-income households receive federal housing assistance. Local programs such as rent control and requirements that developers include affordable housing in their projects help others, but I couldn’t find any national numbers on this and doubt that they’re very big. Overall, housing assistance is only for a lucky minority.

If you’re a member of that lucky minority living in a resurgent city such as New York or San Francisco, you may not even be feeling at all lucky. Rising rents mean federal subsidies don’t go as far as they used to, while new development at least potentially threatens existing rent-controlled tenants. That brings us back to problem No. 1 — the local regulations and political forces that keep more housing from being built. Affluent residents who don’t want tall new buildings in the neighborhood probably drive most opposition to development, but low-income tenants worried about getting pushed out may be wary of it as well.

The TL;dr is: it’s really expensive to build housing these days.  And housing subsidies are only for a very small portion of people, but even those folks feel the pinch because, for example, a Section 8 voucher doesn’t stretch as far in the Bay Area as it would in Stockton.

A cross section of people in a given community are reluctant to allow housing to be built. On the higher income scale there’s a worry about “character” the the lower end the specter of gentrification looms.

But, doing nothing doesn’t seem to be working either.  In Alameda and the Bay Area as a whole, we’ve done the absolute minimum necessary and we have families struggling to stay in their homes.

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11 Comments

  1. It doesn’t help when the appointed renter representative to the RRAC speaks out to City Council against new housing being built because it might make parking for his on island job more difficult and maybe we should not be building apartments.

    Comment by BMac — April 21, 2016 @ 9:53 am

    • Doesn’t help either that ‘current spokemen’ for ARC are against Development. One calling for ban till an additional off Island egress is created and anoither calling for a halt on development at the Point till there is a 1/1 Ratio of Affordable Housing to Market Rate.

      Comment by frank — April 21, 2016 @ 10:01 am

      • Market rate housing IS affordable, by definition.

        Comment by dave — April 21, 2016 @ 11:03 am

        • Actually, Dave that is true, the discount is housing welfare if you look at it correctly.

          Comment by joelsf — April 21, 2016 @ 11:33 am

        • That’s simply not true. The price of housing may be (may be, not is) an equilibrium price. That certainly does not imply it’s affordable. You have to ask “to whom?” when you assess affordability.

          Comment by BC — April 21, 2016 @ 1:02 pm

        • dave, whatever word you choose has its issues. When I use the term “affordable housing” I am referring to what one might call subsidized housing. But then, that would imply that the government doesn’t subsidize what we call “market rate” housing through various policies we have discussed at length here (prop 13, interest deduction, etc). Let us not worry about the semantics too much, there is actually policy to figure out.

          Comment by BMac — April 21, 2016 @ 3:12 pm

  2. RT @BloggingBayport “…asking that voters enact rent control to maintain an artificial level of affordability for a select number of people..”

    Comment by MP — April 21, 2016 @ 2:00 pm

  3. jesus H christ dave, what an ignorant statement. especially for a finance guy. Market rate means that there are enough buyers who can afford the rate, but there is no context for percentage of the general populace with regard to that threshold. Market rate is affordable to those who can afford it, period. That group could be a small percentage of the over all pool of people who need housing. You flood a market with high income tech people who can set a new market rate, that does not address the massive displacement of average income people. What’s your answer to those folks? Let me guess, “Them them eat cake”?

    Comment by MI — April 21, 2016 @ 3:23 pm

    • Just a simple statement, Mark. If a price is determined by market factors, it is affordable, ipso facto.

      Comment by dave — April 21, 2016 @ 4:14 pm

      • That something is affordable by someone does not make it affordable in any meaningful sense. In fact, if a price is set by a malevolent dictator and one person in the world can afford it, then it is just affordable too by the same logic. Your point is at best a trivial one.

        Comment by BC — April 21, 2016 @ 5:17 pm

        • When I Say “market factors” I mean supply and demand, and a large number of buyers & sellers. The dictator scenario does not qualify, and in any case that is nothing like our local rental market. But you knew that already.

          And Alameda is affordable in a “meaningful sense”. Alameda is cheaper than comparable parts of Oakland & Berkeley and significantly cheaper than SF or the Peninsula, et al

          Comment by dave — April 21, 2016 @ 5:41 pm


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