Inclusionary Zoning Lite and Little

New Orleans     Catching up on back papers I found both the interesting and the disappointing.

Let’s start by keeping it positive and look at something called RentCheck, which is an application designed for tenants, but gaining some support by landlords, finding it useful enough that they have downloaded it in 40 US states and seven different countries.   RentCheck charges renters $20 per lease and landlords $5 per month to manage properties using the app. The app “…allows renters and landlords to complete a standardized rental inspection with smartphones.  Users can track the condition of a property using time-stamped photos and get access to inspection records at any time.”  This stops the problem of landlords showing up unexpectedly and of tenants having to prove the conditions of the apartment are the same as when they rented so that they are able to recover their security deposits.  If it works, it seems like a win.

On the other hand, we fight for inclusionary zoning everywhere in the world when it means the development of more units of affordable housing, so it seemed like good news seeing a headline that the New Orleans City Council had finally adopted a plan for such zoning in the city, especially since real estate and business interests had tried to get the state to prevent them, forcing a veto from the governor.  The plan seemed pretty complicated though.  It’s not a citywide requirement for developers, but instead is based on maps – that have not been generated yet – that will focus less on areas plagued by dislocation or gentrification, and instead on areas close to public transit and job centers.  Are developers even interested in those areas?  How does this not ghettoize affordable housing rather than beating back gentrifiers?

According to one of the local papers,

“The policy requires a developer building five units or more to make 10 percent of rental units affordable to anyone who earns 60 percent of the area median income, or about $30,000 for a two-person household.  The requirement also applies to homeownership, but the area median income in that case is higher, set at 80 percent, or about $42,000.”

The CEO of the Home Building Association is screaming like a stuck pig that this plan isn’t “workable,” is “anti-business,” and will push developers into surrounding parishes without any restrictions.  Meanwhile to put some sweeteners in the pot for the developers, the city is willing to allow more density, reduce parking requirements if close to a bus stop, and shrink the size of a lot size.

All of which is so much hooey, and this is the punch in the gut to dash any hopes that inclusionary zoning lite or whatever was just passed will really increase affordable housing in New Orleans:

“Consultants told city officials to temper their expectations.  If New Orleans had enacted such a policy five years ago…just 126 affordable units would’ve been created based on projects built since then.”

All of which makes this a drop in the bucket compared to the oceanic problem of affordable housing in New Orleans or any other city thinking about inclusionary zoning.  Why would politicians take the heat and lose the campaign contributions for something that only yields 25 new affordable units per year?  Why pretend to deal with the issue, rather than meeting it head on?

Very disappointing!

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Affordable Housing Crisis Growing Globally

(Reuters/J. Herrmann)
“Commerce alley” and “hawked for $28 million” by property giants: Berlin’s rising rents have many very afraid of affording their rent or losing their homes

Chicago    When affordable housing is in the headlines, it’s a safe bet that it is not prompted by a concern for low-and-moderate income families, but maybe we can take a lemon and make it lemonade, as activists are doing in many cities.

Here’s the context.

  • According to Knight Frank, a London-based real-estate consultancy reported in the Wall Street Journal: “Across 32 major cities around the world, real home prices on average grew 24% over the past five years, while average real income grew by only 8% over the same period.”  Reading between the lines, when home ownership becomes an affordability crisis for middle- and upper-income families, then “Katie bar the door!”
  • Despite governments in Canada and Australia adding taxes aimed at second-home and transient investors, affordability is still out of control. In Sydney, Australia the average price for a home is 12 times the median income for middle-class families.
  • Rent control is gaining ground as families come to terms with elusive home ownership dreams. There are drives in California, Berlin, and London for example and the Swedish election turned on deregulating rents.  Spain’s government recently capped apartment rent increases as well.

Berlin, Germany, might be the sharp point of the spear.  There tenant advocates are collecting signatures for a ballot proposal that would force the city to expropriate all private, for profit landlords that own more than 3000 apartments.  According to reports, the Berlin mayor has also proposed buying around 50,000 apartments from private owners and his party wants to freeze rents over the next five years.  Germany has a unique system of contracting with private landlords to provide housing for lower income families on extensive multi-year contracts rather than building more public housing as sort of a different twist on Section 8 housing subsidies in the United States.  Nonetheless, taking such units over totally would be huge.  Large landlord combines, as we found in Frankfurt several months ago, are often beneficiaries of so-called public-private partnerships which contract with these rental conglomerates in Germany to build and then manage the units making their size and operations increasing controversial.

The lack of a national housing program or much of a local one complicates the response in the United States.  An easily observed irony that is depleting the construction of affordable housing in many cities is the double standard allowed for AirBnb in commercial rental complexes as opposed to neighborhoods, making some condo and luxury apartment construction projects mini-hotels when they are not able to price their units to sell on the market, the AirBnb loopholes balance their books and fuel more of the same faux market-rate development.  This is easily observed in New Orleans and many other cities.

Meanwhile in Germany the effort to collect 170,000 signatures is ongoing.  The ballot initiative would not be binding, but would state public interest clearly, and that is worrying builders and others.  Perhaps this is the kind of message we need to send everywhere in order to finally force some real attention to the issue and programs that deliver mass solutions for affordable and decent housing.

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