Blogging Bayport Alameda

August 28, 2017

Luxury today, affordable tomorrow

Filed under: Alameda — Lauren Do @ 6:08 am

This Strong Towns post in early August is something worth considering for those among us who think that the most appealing argument against building housing is to claim that only luxury housing is being built and therefore we should build nothing unless it’s all workforce — or something along those lines.  It sounds really compelling because the frames the argument as the person not being against housing but rather against expensive housing.

This post is particularly interesting because it uses historic advertisement to show that — at one point — existing housing stock which is now affordable at one time was deemed to be luxury housing.  From the post which is specifically about housing in Portland, but I’m guessing that if one was inclined to look at old copies of Alameda newspapers there might be similar advertisements:

They show that today’s affordable housing often started life as self-described “luxury” housing when it was originally built.

The first example dates back a half century, to the 1960s, when, in the wake of urban renewal, the city was building a wave of new apartments. The Oregonian of January 9, 1966 described the city’s booming market for new luxury accommodation:

One of these complexes was the Timberlee in suburban Raleigh Hills, a close-in suburban neighborhood. According to the Oregonian, the Timberlee on SW 38th Place was one of the most prosperous of the 13 apartment complexes it examined in its story, with 97 percent of its 214 units rented.

Of course, the Timberlee Apartments are still around.  While none of the units are currently for rent, according to Apartments.com, rents in the area run from about $1,000 for studios and one bedroom to $1,300 and more for two bedroom and larger apartments.  By today’s standards, the Timberlee seems modest, and a bit dated, rather than luxurious.

The Timberlee apartments are typical of those that were built around the country in the 1960s and 1970s.  As City Observatory has chronicled, similar vintage apartments in the Atlanta suburb of Marietta, started life as the preferred housing of (mostly white) young couples and singles, but as they aged, became so affordable that they constituted low income housing.

And the wrap up:

Here’s the takeaway: New housing is almost always built for and sold to the high end of the marketplace.  It was that way a hundred years ago and fifty years ago. But as it ages, housing depreciates and moves down market. The luxury apartments of two or three decades ago have lost most of their luster, and command relatively lower rents. And the truth is, that’s how we’ve always generated more affordable housing—through the process economists call “filtering.”  And the new self-styled “luxury” apartments we’re building today will be the affordable housing of 2040 and 2050 and later.

What causes affordability problems to arise is when we stop building new housing, or build it too slowly to cause aging housing to filter down-market. When new high priced housing doesn’t get built, demand doesn’t disappear, instead, those higher income households bid up the price of the existing housing stock, keeping it from becoming more affordable.  Which is why otherwise prosaic 1,500 foot ranch houses in Santa Monica sell for a couple of million bucks, while physically similar 1950’s era homes in the rest of the country are either now highly affordable–or candidates for demolition.

 

 

1 Comment

  1. So, instead of building the Bayport mansions we could have built the low income housing that many wanted to build on that land and they’d be worth, on the market, what the mansions were worth when built?

    Comment by jack — August 28, 2017 @ 6:33 pm


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