housing affordability – Equitable Arlington

Myths & Facts About Affordable Housing & Density

This timely report on the question of affordable housing vs. density comes from the California Dept. of Housing & Community Development and mirrors the situation in the region surrounding Arlington MA.

Housing production has not kept up with job and household growth. The location and type of new housing does not meet the needs of many new house- holds. As a result, only one in five households can afford a typical home, overcrowding doubled in the 1990’s, and too many households pay more than they can afford for their housing.

Myth #1
High-density housing is affordable housing; affordable
housing is high-density housing.
Fact #1
Not all high density housing is affordable to low-income families.

Myth #2
High-density and affordable housing will cause too much traffic.
Fact #2
People who live in affordable housing own fewer cars and
drive less.

Myth #3
High-density development strains public services and
infrastructure.
Fact #3
Compact development offers greater efficiency in use of
public services and infrastructure.

Myth #4
People who live in high-density and affordable housing
won’t fit into my neighborhood.
Fact #4
People who need affordable housing already live and work
in your community.

Myth #5
Affordable housing reduces property values.
Fact #5
No study in California has ever shown that affordable
housing developments reduce property values.

Myth #6
Residents of affordable housing move too often to be stable
community members.
Fact #6
When rents are guaranteed to remain stable, tenants
move less often.

Myth #7
High-density and affordable housing undermine community
character.
Fact #7
New affordable and high-density housing can always be
designed to fit into existing communities.

Myth #8
High-density and affordable housing increase crime.
Fact #8
The design and use of public spaces has a far more
significant affect on crime than density or income levels.

See an example of a “case study” of two affordable housing developments in Irvine CA, San Marcos at 64 units per acre.

Affordable housing: San Marcos Apartments, Irvine CA, 64 units/ acre

San Paulo at 25 units per acre.

Affordable housing at San Paulo apartments, Irvine CA, 25 units/ acre.

Both are designed to blend with nearby homes.

The Gentrification of Arlington

(Comments presented to the Arlington Redevelopment Board and Select Board during a public hearing on Jan 13, 2020)

Steve Revilak, 111 Sunnyside Ave. In the interest of disclosure, I live in market rate housing that was built by a developer. Among Arlington residents, I’m not unusual in that regard.

At the end of December, a friend sent me an article that appeared on Redfin’s blog, which ranked the most competitive real estate markets in 2019. Out of 20 listings, three were neighborhoods in Arlington: East Arlington at #3, the Brattle Street Area at #5, and Arlington Center at #12. This is only one data point, but Redfin is a national realtor and works in markets all across the country. Arlington is a desirable place to live.

Housing costs have steadily increased over the last 20 years, modulo a brief reset during the economic recession of 2008. For example, the prior owner of my house purchased it for $151,000 is 1999. I purchased it for $359,000 in 2007 (when it was assessed at $287k). Today, it’s assessed at $501k, which is consistent with similar home sales from 2018.

The net effect: each year a new family moves to town, they have to have a more money (or be willing to spend more on housing) than a family who moved in the year before. With that in mind, I’d like to cite a few figures from the 2019 Town Survey:

Question 37: Indicate the number of years lived in Arlington. 59% of respondents indicated 15 years or less. Nearly 30% indicated five years or less. Despite the prices, people still move here.
Question 40: What was your annual household income in 2018. The most common response was “more than $200,000”, with over 28% answering that way. Nearly 71% of respondents indicated earning $100,000/year or more. Arlington’s median income is likely higher than HUD’s AMI for the Metro Boston area.
Question 41: What is the highest level of educated completed by a member of your household. Over 73% indicated having a masters degree or higher.

I don’t mean to knock people who’ve lived here 15 or fewer years, have advanced degrees, or have household earnings of $200,000 or more per year. I check every single one of those boxes myself. But I do want to point out that we are a highly educated and affluent community. Put another way, we have a population that matches the cost of our housing.

Twenty years of gentrification haven’t killed us: we’ve expanded town staff and services, we’re renovating public buildings, and we’re getting a new high school. Those are all good things, made possible because residents have the money to pay for them, and have been willing to do so.

We can absolutely keep the status quo we’ve had, but I want to recognize that the combination of the housing market and Arlington’s policies have created an economic barrier to living here. I see two issues: one is affordability, and the other is an imbalance between supply and demand.

There are a variety of things we could do, and I think we should consider all of them. I don’t see a viable way to relieve housing pressure that doesn’t involve more housing. And that’s what I hope we can do over the coming years: find ways to build more housing.

Does Building More Housing Reduce the Market Price?

Report by Vicki Been, Ingrid Gould Ellen, and Katherine O’Regan, Supply Skepticism: Housing Supply and Affordability, NYU Furman Center 8/20/18

Some affordable housing advocates question the premise that increasing the supply of market-rate housing will result in more affordable housing. This paper addresses the key arguments these “supply skeptics” make. Considering both theory and empirical evidence, the authors conclude that adding new market-rate homes moderates price increases does make housing more affordable to low- and moderate-income families.

At the outset, the authors review the relevant studies and conclude that “the preponderance of the evidence shows that restricting supply increases housing prices and that adding supply would help to make housing more affordable.” They then turn to several arguments the supply skeptics make. One key issue is whether adding housing in a part of the housing market will affect prices in another. The housing market is not uniform but composed of various submarkets. These submarkets relate to each other in complex ways. Critically, however, if demand forces up prices in a higher-end submarket, some buyers will turn to the next segment down and bid up prices there, generating a cascade. Adding supply at higher levels reduces this cascade and relieves price pressure all the way down. Empirical research indicates that this “filtering” process happens surprisingly quickly.

Supply skeptics may also fear that construction of new housing will exacerbate affordability problems by raising neighborhood rents or prices, fueling gentrification, and potentially displacing existing residents. New construction can have both positive and negative effects on prices or rents of nearby homes. New housing may an amenity that makes a neighborhood more attractive – and expensive. But it also absorbs demand and may reduce the incentive to upgrade existing housing to please high-end buyers. The evidence on the net effect of these effects is unclear. An important California study indicates that the production of market rate housing was associated with a lower probability that low-income residents in the neighborhood would experience displacement. But more research is needed.
The authors point to additional disadvantages of limiting supply, including pushing lower-wage workers to live in distant suburbs, where long commutes add to regional traffic woes and greenhouse gas emissions. They stress, however, that increased supply, while essential, is not sufficient to address the affordability challenge. Government intervention through subsidies and other measures is critical to ensure that housing supply is added at prices affordable to a range of incomes, and especially the lowest ones.

Four Big Housing Challenges In Metro Boston

Data in a Mass Housing Partnership report shows how far behind the Boston metropolitan area has fallen in meeting the housing needs of its citizens. There are four primary categories for measuring the inadequacies: 1. Availability, 2. Affordability, 3. L0cation and Mobility and 4. Equitability. See the full report for more data and examples. Two slides are shown below.