Opinion

Looking Up: One small step toward affordability?

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Looking Up: One small step toward affordability?

Like most of the country, Albany has many residents who cannot find housing they can afford. Now, Albany is not Seattle or San Francisco. Our housing affordability challenges stem more from lack of income than from absurd housing costs. It is mostly people at the lower end of the income scale that have trouble finding homes they can afford—especially homes in decent condition.

That said, the housing market study prepared for the city’s rezoning process pointed out that housing costs have in fact been increasing faster than income here as well—rent increased 60 percent from 2000 to 2014, while renters’ median income only increased 22 percent. We also have a jobs-housing mismatch: Also from that study—“Workers in arts, entertainment, recreation, food services and retail trade would have a difficult time finding a place to rent if they live alone. These workers make up almost a quarter of the city’s workers.”

Although the study shows a supposed “surplus” of units affordable to people making $25,000–$49,999, this is nearly entirely erased by the fact that there’s a deficit of units for those making both more and less than that income range. People don’t actually rent only those homes technically in their affordability range after all—those making more are likely occupying many of those apartments and getting a good deal, while those making less are often forced into apartments they cannot officially afford, joining the ranks of what we in the housing field call “rent burdened”—i.e. paying more than 30 percent of their income in rent. Among the very poor, nearly everyone is rent burdened.

Into this scenario, you may have heard that an affordable housing requirement (page 134 of the new zoning document) was added at the last minute to Albany’s newly passed zoning revisions. There’s a lot of misinformation out there about inclusionary housing requirements: No, they don’t make prices go up for everyone else—that would mean developers had been charging less than the market would bear, which makes no sense. The fear that they will slow development has also not generally been born out by the empirical evidence. But it is true that it tends to be a hot-market solution; at some point a measure could be burdensome enough to deter development.

Albany’s provision is unusual and/or limited in several ways. It only applies to developments over 50 units, of which we have precious few even under optimistic scenarios, making its effect modest at best. It also doesn’t provide any density bonus or other incentives for the required affordable units, which most programs do. It limits the rents, but doesn’t establish income qualification for the people living the affordable units. It doesn’t specify the time frame for affordability (to be meaningful it should be long, ideally permanent), or an enforcement mechanism. At least those latter two points really need revisiting.

The provision requires 5 percent of units to be affordable to people making 100 percent of the city’s median income ($41,099; which is also about 50 percent of the area median income for the metro region, which is a more common way to measure affordability), which works out to a rent of no more than $1027/month. This is pretty close to the current market rate rents for the smallest units of luxury housing going in downtown (and indeed in the region), making it a fairly small burden (and a fairly small benefit, given that many of those most in need, need larger units). Given that developers are stuck getting tax breaks from the city, will potential developers add this small cost into their calculations when approaching the city and ask for more? Yes, they might well.

For now. But if the market gets stronger, which it well might, given national trends, this requirement will start to be just an acceptable cost of doing business, and could eventually serve to keep the hottest areas not entirely off limits to moderate-income households (as long as meaningful time frames have been added), and slightly lower the rate at which those households in turn snap up cheaper units. That’s a good thing.

In fact, planning ahead for rising costs and having a provision in place to preserve economic diversity before it’s been lost is in some ways the holy grail of managing neighborhood change and spatial inequity. So I’m glad we have made a move to have something on the books. If we make this work, we could, in fact, be a leader in a very smart direction.

However, it should not be taken as anything that will solve our most pressing affordable housing needs. That is a difficult but important conversation that needs to keep happening.

 

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