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Exploring Affordable Housing

Updated: Oct 9, 2020

52%. That's how many community college students are effected by housing insecurity.

A striking statistic that highlights one of the major challenges faced by today's college student. In looking for answers to address college homelessness we hosted our third online forum to take a cursory look at affordable housing. Affordable housing is a critical debate in cities across America. Millions of Americans lack access to a safe and stable supply of affordable housing, and although there is abundant demand, there is inadequate supply. Why is that?

An affordable dwelling is one in which can be obtained with 30% or less of of an individuals or families income. However as we learned, the Area Median Income (AMI) of of a family in Tarrant County is $52,700 a month and over 30,000 families that earn up to 30% of AMI do not have affordable housing options. If we apply this formula to the AMI the price of an affordable unit is $1,317.50. The average price of a new 2 bedroom apartment in 2018 was $1,200 a month. However this price can increase depending on location. The Near Southside, which has seen the most concentration of new development has an average price of $1,330.00 for monthly rent for a new 1-bedroom apartment (based on compiling and comparing prices from the Near Southside's Website and monthly rent charges on newly built properties in the area). With the average prices of housing in Tarrant County, over 100,000 families are over burdened.

Lack of jobs that pay living wages also contribute to this challenge. In Texas the minimum wage stands still at $7.25 and has not increased since the federal increase in 2009. At the current wage a worker in Tarrant County would have to put in 115 hours to cover rent and basic living expenses. Job growth is growing in Tarrant County, however 25% of the current jobs fall in lower wage sectors. With the recent pandemic many of the new jobs created through hospitality, retail, and restaurants are either in jeopardy or no longer valid.

Developing Affordable housing is a complicated matter. It is a multi-discipline affair often requiring many years of planning and implementation, extensive capital to accomplish, with zero guarantee the project will be successful. As stated by a developer we interviewed last year, every project is similar to starting a new company. There are numerous technical challenges associated with building housing including building codes, zoning, the cost of land, and the effect of local policies. Zoning can have a direct effect of the price or the availability of land that can be used for housing. Say for example a zoning policy requires a 2 car parking minimum for each housing unit, every unit adds additional cost and space for parking. The cost of the parking is usually passed on to the tenant resulting in higher rent. Parking minimums come with additional challenges as well, most of all encouraging a car dependent lifestyle, which can effect students that do not have access to a personal vehicle. These limitations can reduce the number of housing units produced.

Zoning can also restrict the capacity of land use including the allowable height, how many units per acre, landscape requirements, set back distance from the side walk or road, and even in some cases the type of materials allowed. Every city interprets their zoning ordinances differently and each of these factors can effecting pricing. Upzoning, which is the sudden change in a plot of land's allowable capacity, can create substantial price increases. If we take another example, a plot of land is zoned to allow allow one single story house. The price for the land is reflective of what can be built on the property. If the zoning is changed to allow more stories and apartment complexes, the value of the land can rise exponentially. As a private land owner I can sell the land for the original value or take advantage of the additional capacity and increase the asking price for the plot of land. This cost plays a huge role in determining what type of project is ultimately feasible.

These policies influence the type of funding attracted for development. Currently, 37% of investments made in real estate are from investors that live outside the area where projects are being developed. Due to the rising cost of capital and complexity of developing property, the capacity of local and smaller investors becomes diminished. Land use policy that favors higher density can also have unintended consequences. Higher density properties can adversely increase adjacent land values, resulting in the displacement of existing communities for more affluent residents, often referred to as gentrification.

Local taxation is partly attributed to these unintended consequences. The tax rate influences the cost of property both in the short term and long term. The City of Fort Worth, generates 47% of its revenue through property taxes. This creates incentive to maximize the amount of taxable space and the amount taxed on land. Tax Incremental Financing (TIF) has been implemented in select districts in Fort Worth. The bonds issued for the TIF's are repaid from taxes derived from new property or added value to existing property. The result is increased cost for property owners, which increases rent charged to tenants.

Wealth generation has been long associated with home ownership, creating the incentive to maintain and raise residential values to maximize gain for the individual or individual family. Although it can provide benefit to immediate family members, this trend also contributes to limiting availability and accessibility of local home ownership.

Affordability is also a race and cultural issue as well. Embedded with any affordable housing project or disruptive zoning policy is the lingering effects of multiple oppressive tactics against communities of culture. Zoning was used a tool to deny both Chinese and Jewish communities from inner urban areas by outlawing the buildings associated with their employment or living. The Home Owners Loan Corporation was a federally mandated program that ranked communities based on race to determine mortgage eligibility and risk. This policy often referred to as redlining hindered many communities from being able to build equity through property ownership. Even though redlining was outlawed in 1965, the effects still linger, and many of the communities affected still live in extreme poverty.

A wage gap still exist between communities of color and women as compared to their white male counterparts. Women on average earn 80.7 cents for every dollar a white man working full time earns. The gap is more severe for black women who earn 67%of their white male counterparts and Hispanic women who only earn 58%.

The ideal environment designed by architects and urban planners also have to be looked at with some skepticism. Many of the visions are crafted by affluent practitioners for affluent communities, often reciting the teachings from the modernist movement, which was conceived primarily buy white, European and American men. Architecture suffers no differently in inclusion and equity challenges. The Pritzker Prize which was established in 1979 to award architects for significant contributions to humanity and the built environment, did not see its first woman recipient till 2007 with Zaha Hadid. The prize has since been awarded to 4 other women. That said, architecture does have the capacity to do good work, but it is limited to the clients capacity and will to fund a project for a specific cause.

College students are effected by the increased burdens in day to day life. Living on limited resources brings additional anxieties. In the event of an unexpected need like a tire going flat, or contracting an illness that requires a hospital visit can be enough of a financial burden to force a student to drop out of college. Students also face multiple barriers with financial aid and Pell Grants. Failed credit checks can deny resources and any changes of income can significantly reduce access to resources. This can put a student on a vicious cycle where too high of a wage can deny a student access to certain resources. As more hours are needed to cover expenses, the additional income sets off additional triggers, leading to less resources and even more hours required to covered expenses. Coupled with the increasing cost of housing, the lack of shelters catered to accommodate college students, and limited access to housing vouchers the the only living options left for some students is sleeping in a car, or couch surfing. Over 30% of the students in Tarrant face food insecurity and 72% are not confident they would be able to pay back the debt they acquired in school.

So what are some solutions? There have been successes in the in tiny home communities including Community First Village and Square One Village. Caution must be practiced with tiny homes to not allow it to become an excuse for the current conditions or to expect unrealistic savings. Certain models can sell for for a higher cost than more traditional forms of housing and local policy can restrict building a tiny home. Icon Build developed a community in Tabasco, Mexico using a large 3D concrete printer. The houses still require some manual labor to install utilities, roofing, openings, and finish work, but it allows the core structure of the house to be built very efficiently. Alejandro Aravena designed an intuitive solution in Chile. Working directly with the community he identified a desire for residents to expand their homes in the future. The houses are built with intentional open space to allow the tenants to finish the rest themselves in the manner that best suited them. In London, WikiHouse uses a crowd-sourced 3D printing platform to help local fabricators contribute to the manufacturing of a house. The home is shipped to a site and the buyer is able to assemble it similar to a large IKEA furniture set.

NIMBY is considerable challenge for any housing project, especially one involving affordable units. There is an inherent fear that residents express when new development projects are proposed in established neighborhoods. Whether it be the fear of parking, parties, crime, or lowered property values, a strong neighborhood association can effectively shut down a project. A great counter to this challenge is advocacy. Being a champion for an affordable project or creating a YIMBY group help swing the favor for an affordable housing project. Getting engaged with a local Real Estate Council can help highlight priorities to political leaders which can influence policy decisions.

How a Community Land Trust works (Source: Church Hill People's News)

Community Land Trust (CLT) also provide an effective vehicle to control cost. These programs often operate as independent non-profit organizations and purchase the land houses are built on. The land is leased to the home owner for a small monthly fee. This insures that the pricing on the property remains stable and that tax values do not rise unexpectedly. The CLT will prevent land from being sold to a developer or private investor, allowing the community to retain control of what gets built. There are usually substantial cost and efforts with establishing a land trust, making it a long term strategy and one that requires adequate funding.

Tarrant County College, recognizing the economic struggles of students developed an emergency support fund to help cover unforeseen needs. In the wake of COVID-19 other universities have worked to finance their own student support funds to cover sudden life expenses. However, housing is not something the college currently provides to students and housing options at other universities can vary greatly in cost.

We ask what vessels can be used to hold leaders accountable and ensure policies prioritize equity and inclusion. Evergreen in in New York works directly with municipal partners to address job displacement using zoning. These efforts focus on protecting certain districts and the buildings that sit on them from being demolished or converted into uses that do not produce viable jobs for the community. Evergreen also aligns tax incentives to reduce the burden local businesses face and attract new business to operate in the communities that workers live. In New Orleans, a new zoning policy was created in 2019 that requires developments in strong urban cores, like the French District, to guarantee 10% of all housing units are affordable for residents earning up to 60% AMI. The City of Fort Worth has enacted similar tax incentives for developers building in designated Neighborhood Empowerment Zones. However the affordability requirements are not mandatory and the fine for opting out only pays $200 per unit per year. The fine contributes to a fund to develop affordable housing, but is insufficient to build new afforable housing at the same pace of market rate units.

Community Land Trust also bring up some additional discussions. How do we take into account the ability to generate wealth with property and the incentives offered to deduct interest from home ownership taxes? Mortgage deductions where recently amended with the 2018 Tax Bill, reducing the amount people could deduct from their interest on mortgage loans to homes worth $750,000 or less. Recently there has been some debate on the effectiveness of mortgage deduction programs. The program typically benefits families making over $100,000 annually. Low to moderate income communities do not typically utilize the program since they are less likely to own homes or itemized their tax deductions, which is a requirement for the program. Since the deductions favor proprieties with higher values it has encourage families to purchases larger homes, aiding in fueling urban sprawl. The program ultimately leads to higher home prices and reducing the percentage of home ownership. CLT have limitations on how much wealth a property can generate. The primary function of a CLT is to provide long term affordability. Accumulation in a home's value is incremental, and some CLT's control how much a value a house can generate. It raises the question on whether housing should prioritize wealth generation or affordability. Additionally, should housing be our primary means to generate wealth?

We explore if mobile home parks could be a viable means to providing affordable options. Although they can be cost effective to build, mobile home parks do not provide guarantees of affordability to tenants. Property owners are free to sell their land to prospective developers or corporations. A piece by John Oliver, revealed how this trend has resulted in the displacement of some of America's most impoverished families. Even though mobile homes can be relocated, the process is not easy and the cost can be substantial. Any move requires land that has the appropriate utility connections and is zoned to allow the use of a mobile home.

We learn the use of our personal data is mostly uncompensated and could be a potential avenue to collect income. Platforms, including Datacoup and Meeco, allow an individual to profit off their data utilization, but it is not a main stream approach and the extent to which our data is utilized is substantial. Could there be other avenues to capitalize on the gig economy? What other digital tools could we use to generate income and wealth? For college students experiencing homelessness, generating stable income is a priority. However, identifying job opportunities that pay a living wage and offer the bandwidth to pursue an education are difficult. Most of the jobs available for students will be low income jobs that do not pay enough to comfortably afford housing or the bills associated with college. With these limited options, could college homelessness become another justification for Universal Basic Income? It would help eliminate the the burden of generating enough income to live and the give the students more time to focus on their studies.

Given the invisibility of college homelessness, we ask how one might identify a student that is experiencing homelessness and if it should be something a professor would handle directly. Even in intense programs like architecture, it is not always easy to get intimate enough with a student where they would be willing to share their experience. Does exposing them raise other concerns, and would it increase their risk of getting scrutinized by their peers? If a student sleeps in class overnight is it an indication of homelessness? It raises the thought on what type of environments would encourage students to feel safe sharing their story.

Housing is a key piece to addressing college homelessness. But homelessness encompasses more that just having a place to stay. It is about having a support system. Someone to get your back when things turn astray and the resources to get you out of a pinch. There is not a silver bullet to to addressing college homelessness or affordable housing. Both are multi-faceted issues with many contributing factors. Any effective change to either will require action on multiple fronts. The question becomes how do we create accessible student centered housing, given the array of challenges associated with affordable housing and college homelessness? Should housing and education be a privilege or a right? If deemed a right, then what actions are we willing to take to provide a guarantee and ensure the success of our future leaders?

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