September 22, 2024 Ward 3 Affordable Housing News Digest
Government Activity
District of Columbia
Mayor’s Agent Overrules HPRB on Demolition at St. Elizabeths
Washington Business Journal [subscription req’d] reports that Anita Cozart, in her capacity as “Mayor’s Agent” under D.C.’s historic preservation law, has overruled a decision by the Historic Preservation Review Board (HPRB) that had refused permission for the demolition of two 80 year-old buildings on the St. Elizabeths East campus. The two buildings are contributing structures to the St. Elizabeths Historic District.
The ruling by Cozart and Hearing Officer J. Peter Byrne (dated August 6 but apparently just posted online this past week) allows the demolition of Buildings 115 and 116 on St. E's Parcel 15, near the Congress Heights Metro station, finding it "would neither represent the loss of a historic aesthetic nor disrupt the visual order of the remaining historic buildings. The preservation loss from this demolition would be real but clearly limited.”
Cozart’s Decision and Order says that a planned development at the site, to include five buildings surrounding a large open space, offers “significant benefits to the District of Columbia and to the community by virtue of social and other [economic] benefits having a high priority for community services." Demolition of the old buildings is authorized “subject to approval by the HPRB or Mayor’s Agent of the design for the new construction as not incompatible with the character of the St. Elizabeths Historic District.” The concept review for the new construction is on the HPRB’s agenda for its September 26 meeting, and the Historic Preservation Office has recommended approval.
Cozart’s ruling that the development project meets the criteria for special merit within the meaning of the Historic Landmark and Historic District Protection Act relied on numerous factors, including the fact that it will provide affordable housing:
The project will provide approximately 288 new residential units, of which
a minimum of 30% will be set aside as affordable for low-income households earning between 30% and 50% of Median Family Income, with the potential for additional affordable and/or workforce housing. Approximately 27% of the units will consist of larger two- and three-bedroom units, suitable for families. The Mayor’s Agent has repeatedly found affordable housing set-asides contributing to special merit when in excess of generally applicable inclusionary zoning requirements.
Additional Housing Vouchers Not Funded After All
In adopting D.C.’s FY 2025 budget a few months ago, the Council went to great lengths to find additional money to fund hundreds more new housing vouchers than Mayor Bowser had proposed. Last week the Bowser administration said there are no funds available for most of those hundreds of vouchers.
The Washington Post [gift link] reported that Council Chairman Phil Mendelson received a September 11 letter from the Department of Human Services (DHS) that said “basically that the council goofed when it adopted the budget, and that the vouchers that we funded to help the folks who are being exited from rapid rehousing, that those vouchers are actually not funded.”
The revelation mystified council members and staff who worked on the housing budget last spring and summer and who expected roughly 600 new permanent supportive housing vouchers to help families being terminated from the rapid rehousing program. Having hundreds fewer vouchers available could be a significant setback for those families and in the city’s broader effort to connect vulnerable families with more stable housing in a city with exorbitant rental costs.
The DHS letter to Mendelson says the city will not be able to fund all but 38 new permanent supportive housing vouchers in fiscal 2025. Washington City Paper also has a story trying to puzzle through the confusing situation.
Mendelson Plans to Introduce Emergency Rental Assistance Reform Bill
Bisnow says D.C. Council Chairman Phil Mendelson plans to introduce draft legislation in the next couple of weeks to reform D.C.'s Emergency Rental Assistance Program (ERAP), which industry leaders say has been used by tenants to delay eviction proceedings while not paying rent.
Mendelson said his bill would only allow one stay of eviction proceedings for a pending ERAP application, and would require a tenant to show that ERAP could cover their full amount owed or that they have a payment plan agreement for the remaining debt. “Basically, what we’re getting at is it would not be possible to continue to game the system with applications that don’t pay the rent or go nowhere,” he said.
Mendelson identified four affordable housing providers he has spoken with who support the draft bill: Mission First Housing Group, Jubilee Housing, Manna Inc. and Somerset Development Co. Jim Campbell, a principal at Somerset, told Bisnow in an email that the bill is a “critical step” to begin addressing the crisis of rent delinquencies that “virtually all” affordable housing communities in the District face.
“The delinquency crisis is seriously threatening the ability of affordable housing operators to meet basic operating expenses such as maintenance and mortgage payments,” he said. “Obviously, if mortgage payments are not met then there is a risk of foreclosure, which many, many affordable properties are facing.”
Two groups that work on behalf of tenants, Legal Aid DC and the Washington Legal Clinic for the Homeless, have posted on social media that they oppose the draft bill because it would increase the likelihood of evictions for tenants who may otherwise have a path to staying in their homes.
Mendelson said he’s not surprised by the opposition, “because the idea of eviction is not a desirable goal. However, we are not going to improve the housing situation in this city if we are strangling the provider market by preventing evictions.”
Gwen Wright Confirmation Hearing for Zoning Commission
On September 18, the D.C. Council’s Committee of the Whole held a hearing on the nomination of Gwen Wright to serve on the Zoning Commission. A videorecording of the hearing can be found here, and written testimonies can be found here.
D.C. Wins Resilient Housing Grant from FEMA
According to Chris Kain at The DC Line, the Federal Emergency Management Agency (FEMA) announced this week that the District will receive a $12 million federal grant to establish the Resilient Housing for All loan fund — a boost to the city's efforts to produce and preserve affordable housing.
The District is one of 12 jurisdictions selected as recipients of FY 2024 grants through the Safeguarding Tomorrow Revolving Loan Fund, which aims to help tackle climate change and increase the nation's resilience. The District's program will offer loans to affordable housing developers at a 1% interest rate for projects that build resilience through work such as structural flood-proofing, drainage improvements and energy efficiency upgrades.
In a September 20 press release, Mayor Bowser’s office said, “Through this revolving loan fund, the District will be able to offer 1% interest loans aimed at projects that build resilience in affordable housing, supporting the District’s goal of increasing affordable housing options for residents. . . . The Resilient Housing for All loan fund awards low-interest loans to eligible, affordable housing developers to integrate resilient design principles into new affordable housing developments or for substantial rehabilitation projects that reduce risks from natural hazards and disasters. . . . The Resilient Housing for All funds will support the development of approximately 851 affordable housing units . . . .”
Virginia
Arlington to Hold Hearings on Facilitating Office-to-Residential Conversions
According to ARLnow, the Arlington County Board unanimously approved a proposal to advertise public hearings regarding potential zoning changes to enable office-to-residential conversions. County officials note that adaptive reuse is an important tool, given that 40% of office buildings are at risk of “market distress” as well as the need for increased housing, but that the conversions are not a panacea.
Maryland
Planning Board Approves Condo Development in Downtown Bethesda
According to Bisnow and MoCo360, the Montgomery County Planning Board has approved a proposal by Broad Branch Partners to build 53 condo units and six townhouses on the site of a surface parking lot at 4702 West Virginia Ave. in downtown Bethesda.
The board’s approval requires 15% of the homes to be moderately priced dwelling units and seven “deeply affordable” at 50% of the area median income. The condo units will be larger than the typical multifamily units, with the majority having three or four bedrooms.
Federal
Reps. Ocasio-Cortez and Smith Propose Development Authority for Social Housing
In a September 18 guest opinion column in The New York Times [gift link], Reps. Alexandria Ocasio-Cortez (D-NY) and Tina Smith (D-Minn.) proposed a federally-backed development authority to finance and build social housing:
Because we believe that housing is a human right, like food or health care, we believe that more Americans deserve the option of social housing. That’s why we’re introducing the Homes Act, a plan to establish a new, federally backed development authority to finance and build homes in big cities and small towns across America. These homes would be built to last by union workers and then turned over to entities that agree to manage them for permanent affordability: public and tribal housing authorities, cooperatives, tenant unions, community land trusts, nonprofits and local governments.
. . . Rent would be capped at 25 percent of a household’s adjusted annual gross income. Homes would be set aside for lower-income families in mixed-income buildings and communities. And every home would be built to modern, efficient standards, which would cut residents’ utility costs.
Ocasio-Cortez and Smith introduced their bill, H.R. 9662, on September 18. To fund social housing construction, the development authority would rely on a combination of congressional spending and Treasury-backed loans. Projects across its portfolio would be required to set aside 40% of their units for extremely low-income households and 30% of units for low-income households.
A Bloomberg story says the lawmakers estimate that the bill would generate 1.25 million housing units over 10 years, including some 876,000 homes for extremely and very low-income households. The bill draws on the Green New Deal for Public Housing, a proposal introduced by Ocasio-Cortez and Vermont Senator Bernie Sanders in 2019, as well as more recent research on a public option for housing.
Next City says the proposal “builds on the growing trend of states establishing their own social housing authorities and programs to acquire and build housing.” Housingwire has a story on the proposal, noting that, “the path forward for this bill is full of obstacles.” Gothamist also has a story.
In her blog The New Urban Order, Diana Lind says, “Given that the Homes Act seems unlikely to pass, the introduction of the Homes Act less than 100 days to the election looks like an attempt to move the conversation about housing affordability away from YIMBY strategies and more toward the ascendant shared equity movement.” As part of he discussion, Lind says,
As much as YIMBYism is finally breaking through to the mainstream, its shortcomings are growing increasingly apparent. This is less the fault of YIMBYism than the fact that housing price appreciation has just gotten so out of control. It’s pretty astounding to realize that the average price of a home is 30 percent more today than it was in 2020. Thirty percent! Sure, not building housing is only going to make things worse, but no realistic amount of housing supply is going to bring prices back down. YIMBYism is still very necessary — particularly to ensure that desirable neighborhoods can accommodate demand — but it’s not going to radically reduce housing prices in the short term.
Republican Senators Introduce Package of Federal Housing Reforms
On September 12, a group of Republican senators led by Sen. Tim Scott (R–S.C.) introduced the Renewing Opportunity in the American Dream (ROAD) to Housing Act, which proposes a grab bag of reforms to federal housing programs. In his blog Rent Free, Reason’s Christian Britschgi highlights one idea in the bill to increase housing supply: a repeal of the federal regulation requiring that manufactured housing sit on a permanent steel chassis.
Residential building codes for traditional, site-built housing are set by state and local governments. Manufactured housing, which is built off-site and shipped to its destination, is regulated by the U.S. Department of Housing and Urban Development.
Housing wonks have long singled out HUD's requirement that manufactured homes sit on a permanent steel chassis, even once they're delivered, as a major headwind on manufactured home productions.
News/Commentary
District of Columbia
Donohoe Files PUD Application for Friendship Heights Project with 1/3 Affordable Housing
As reported by Urban Turf, Donohoe (under the name Harrison Wisconsin Owner LLC) on September 16 filed a planned unit development (PUD) application with the D.C. Zoning Commission for a 127-unit residential project at 4201 Garrison Street N.W., just off Wisconsin Avenue behind another Donohoe building, a 210-unit project currently in the permitting process at 5151 Wisconsin Avenue N.W.
The filing in Zoning Commission Case No. 24-12 says that, by leveraging the District’s High-Area Need Tax Abatement (HANTA) program, the applicant proposes to set aside 33% of the new project’s residential units for affordable housing. “The Applicant will set aside 10% of the main building [gross floor area] and the penthouse habitable space at the 50% and 60% MFI levels, with the remaining 23% set aside for households with incomes up to and including 80% of the MFI, in accordance with the HANTA program.”
Donohoe shared preliminary plans for the project with ANC 3E back in March. The new filing adds considerably more detail, including on the site plan and building architecture.
Ribbon-Cutting for Affordable Housing in Ward 7
According to Bisnow, on September 19 Mayor Bowser participated in a ribbon-cutting for The Paxton, a 148-unit all-affordable housing development at Benning Road N.E. and 16th Street N.E. in Ward 7. 133 of the units are reserved for households earning at or below 50% of the area median income, and the rest for those earning 30% of the AMI.
The $101 million project was developed by Foulger Pratt with financing from the Department of Housing and Community Development, D.C. Housing Finance Agency, and D.C. Housing Authority. Foulger Pratt says “the design of the building accommodates dedicated program space for the Permanent Supportive Housing (PSH) provider and Community of Hope to facilitate its ongoing support of the families residing in the units set aside for PSH.”
Demand for Apartment Rentals Was High This Summer
Citing a report by RentCafe, WTOP says that demand for apartment rentals in D.C. is now among the highest in the nation. Peak summer occupancy at D.C. apartment rentals reached 93.9%. The average amount of time a recently-vacated apartment stayed on the market was 39 days, making D.C. one of the 10 most competitive rental markets this summer.
The competition can be seen in the number of renters applying for available apartment leases. RentCafe said there were 11 applications for each vacant apartment in D.C. this summer. Rising lease renewal rates, a slowdown in new apartment construction, and strong demand have contributed to an extremely tight D.C. rental market. While D.C. experienced a boom in new apartment construction at the beginning of the decade, construction of new units has now slowed, with only a 0.46% rise in new units added to available rentals this year.
20015 Is the Richest Zip Code in D.C.
Forbes calculated the richest zip codes in D.C., using (admittedly limited) data from the Census Bureau’s 2023 American Community Survey on median household income, average household income, median home value, and median property taxes paid.
The richest D.C. zip code in this ranking is 20015, which includes Chevy Chase and Barnaby Woods. Second is 20007, comprising Berkley, Foxhall Village, and Georgetown; and third is 20016, which includes the Palisades, Spring Valley, Tenleytown, and Cathedral Heights. These top three all had median home values exceeding $1,175,000.
D.C. Metro Region
Area Home Sales Hit 16-Year Low
WTOP reported that the number of homes sold in the D.C. Metro area last month was the lowest for an August since 2008. Closed sales in August were down 5.1% from August of last year, despite an increase in the number of homes for sale. In D.C. itself, closed sales were down 15.4% from the previous August.
The number of active listings on the market in the D.C. metro at the end of August was 25.5% higher than it was a year ago. Bright MLS chief economist Lisa Sturtevant said, “Compared to 2019, [inventory is] still only about 63% of where we were before the pandemic. But it depends on the kind of home you’re looking for. If you’re looking for a condo, there are more listings now than in 2019. If you’re looking for a single-family home, it is a much tighter market.”
The biggest challenge for buyers remains price. The median price of a sale last month was $612,000, 4.6% more than a year ago.
Mapping Walkable Neighborhoods
A Bloomberg article highlights an interactive map that allows anyone to visualize walkable neighborhoods across the U.S. by showing proximity to grocery stores, playgrounds, schools and more. Started by geographer Nat Henry in his native Seattle, the online map he calls Close has now been updated so users can explore the walkability, bike-ability or transit accessibility of any place in the United States.
Henry’s D.C. Area Map is here. Color codes show walk, bike, or transit times to various amenities selected by the user, including transit stops, parks, libraries, stores, restaurants, and lots more.
APAH Changes Name
The Arlington Partnership for Affordable Housing announced that it has changed its name to True Ground Housing Partners, to reflect its growth across the Washington region.
The announcement marks a new era for the nonprofit affordable housing developer that provides housing to more than 5,000 individuals and families in one of its 2,800 apartments across 23 properties located in Arlington, Fairfax, Loudoun counties in Virginia and Montgomery County, Maryland. An additional 1,400 units are under construction or in pre-development in those jurisdictions, and Washington D.C. . . . True Ground plans to triple its affordable housing footprint by 2028 to meet the region’s growing need.
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In addition to helping lower income neighbors gain access to safe, affordable housing with state-of-the-art amenities, True Ground has differentiated itself by incorporating social work best practices into its resident services delivery model, working with local service providers and volunteers to develop its CORES-certified resident services program.
Maryland
WMATA Seeks Development Partner for Capitol Heights
Washington Business Journal [subscription req’d] reports that the Washington Metropolitan Area Transit Authority (WMATA) is seeking a development partner “to build a mixed-use project at the Capitol Heights station, another step in the transit agency's long-term plans to see millions of square feet of new uses constructed on numerous of its properties regionwide.”
The 6-acre site, currently holding surface parking and a bus loop, could support up to 600,000 square feet of new residential development. On September 18 WMATA issued a request for qualifications, saying in a press release that it seeks “a developer with experience creating vibrant and sustainable communities” to take the project forward. The press release calls the Capitol Heights station a "great transit-oriented development opportunity to provide new housing” and neighborhood-serving retail.
Enterprise Secures Financing For Affordable Housing In Baltimore, Annapolis
Bisnow reports that nonprofit affordable housing provider Enterprise Community Development has obtained $116.4 million in financing for affordable housing, including $74 million to renovate a 170-unit affordable housing property in Annapolis, $26.6 million for the new construction of a 59-unit project in Baltimore, and $15.8 million for the rehabilitation of another Baltimore community.
The NIMBY Playbook in Montgomery County
The Rollingwood Citizens Association, representing homeowners in the Rollingwood neighborhood of single-family homes in eastern Chevy Chase, Maryland, has posted a list of resources related to the Montgomery County Planning Board’s proposed Attainable Housing Strategies Initiative. The document includes links to both relevant Planning Board documents and generally anti-upzoning news and commentary.
Nationwide
DOJ Lawsuit Against RealPage Prompting Change In How Landlords Price Rents
According to Bisnow, the August 23 filing of the Department of Justice’s antitrust lawsuit against RealPage over its revenue management algorithm “has already spooked some apartment managers into changing the way they set rents. Apartment landlords and third-party managers are increasingly sensitive to whether the algorithms used to determine rental rates are being fed private proprietary data from other competitors.”
Bisnow sees a “sea change in the way apartment landlords and managers derive market-rate rents.” Many multifamily companies are moving away from RealPage products, moving away from revenue management software that uses private information, and in some cases moving away altogether from revenue management software.
“Many apartment owners and managers are pivoting to relying on information that can easily be found by anyone on the Internet on sites like Apartments.com or a phone call to avoid the appearance of engaging in price fixing.”
Why Nobody Is Building Middle-Income Housing in American Cities
While the Affordable Housing News Digest was on its summer break, Patrick McAnaney of Somerset Development Co. published two more of his cogent essays in Greater Greater Washington explaining how the housing market and affordable housing development work.
Back in July, McAnaney explained “Why no one’s building middle-income housing in American cities.” As McAnaney explains in greater detail, “The answer lies in the economics of land valuation. In expensive cities, middle-income housing developments — new homes and apartments that residents earning about the median family income can afford — simply cannot win the competition for land.” He concludes,
When residents oppose new construction in their neighborhoods to fight “luxury housing,” they are fostering the environment in which those very high-rent projects thrive.
In August, McAnaney wrote, “Why multifamily development is so boom and bust.” In short, “Housing development is so boom and bust because land values fluctuate enormously, and, as a result, residential development projects rarely pencil out mathematically during economic downturns. Instead, they flourish during periods of economic growth.”
The Market Alone Can’t Fix the Housing Crisis
Writing in the Harvard Business Review, Brian Callaci and Sandeep Vaheesan of the Open Markets Institute say the United States is experiencing a serious housing crisis, has been for a long time, and that unaffordable housing is a drag on regional and national economies.
Many commentators have argued that the housing market can be repaired with the simple fix of liberalizing zoning rules and other public regulations allegedly strangling the supply of new homes, which they say will lead to an explosion in housing construction. Another view says that one underappreciated cause of runaway housing costs is the market power of developers and landlords, and software that allows them to leverage this power in unfair ways.
The authors explain (at some length) their view that:
Research from around the world shows that more permissive zoning rules do not, by themselves, lead to a major increase in housing supply, let alone more affordable housing. The truth is that the market itself needs to be fixed. Specifically, any plan to overhaul the housing market needs to, first, confront the power of landlords to raise rents. Second, it requires rethinking public governance of housing markets beyond simplistic prescriptions to just free the housing market from government regulation, assuming lower rents will follow. And third, to that end, we need more — not less — muscular government involvement in housing, through price regulation, more robust planning, and even direct public provision.
Could Repurposing Federal Land Help the Housing Market?
Federally-owned land accounts for 28% of the nation’s total land. An article in Fast Company looked at whether selling off some of this land could spur more home construction and help reduce the nation’s housing shortage. There’s a growing push in both the Democratic and Republican parties, including from Kamala Harris and Donald Trump, to repurpose some federally-owned land.
Only a small percentage of the more than 615 million acres of federal land would be suited for housing development.
More than a third (36%) of all federal land is in rural Alaska—areas with very little housing demand, infrastructure, and local services. Most federal land covers swaths of deserts, mountains, and remote wilderness.
And the markets with the largest estimated housing shortages — metros like New York City and San Francisco — do not have much undeveloped federal land to spare.
Daryl Fairweather, chief economist at Redfin, said, “The [federal] land that would really make a difference is very limited. That doesn’t mean that it shouldn’t be done — if you build 50 units on top of a post office, that’s 50 more housing units than we had before — but it’s not a comprehensive solution.”
Easing local zoning restrictions, argues Fairweather, would do more to bring about new housing than selling off federal land.
“These [zoning] issues are in every single city that has high earners and a strong economy,” Fairweather says. “It’s kind of the curse of having a strong economy — if you don’t build housing to keep up with the growing economy, then affordability gets out of control.”
Half of America’s Renters Are Cost-Burdened
According to Washington Business Journal [subscription req’d], effectively half of America's renters currently are considered cost-burdened.
That's according to one-year estimate data from the U.S. Census Bureau's 2023 American Community Survey released last week. It found 21.1 million renters spent 30% or more of their income on housing costs last year — a reference to a commonly used threshold for housing affordability. That volume represents 49.7% of the 42.5 million rental households in the United States.
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The survey also revealed that renters in 2023 had a higher median housing cost as a percentage of income compared to homeowners — 31%, compared to 21.1% for homeowners with a mortgage and 11.5% for those without.
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The income needed to comfortably afford the typical U.S. rent and not be considered cost-burdened is now $82,514, according to Zillow. That's up 31.8% since 2019.
Analyzing the Biden Administration’s National Rent Stabilization Proposal
The Biden administration’s proposal aimed at stabilizing rental housing costs would limit annual rent increases to 5% for the next two years for existing units owned by large landlords if they want to continue receiving tax breaks available to rental property owners.
On September 11, the Urban Institute’s Housing Matters Initiative published an analysis of the Biden proposal, concluding that while rent stabilization increases the number of units affordable to residents with extremely low incomes, on average, it also reduces the overall supply of rental units. The authors then outline considerations to ensure that a rent stabilization policy would benefit those who need it most.
YIMBY Education Can Move the Needle
A new paper by Christopher Elmendorf, et al., finds that simply explaining housing markets to people makes them much more YIMBY in their attitudes toward market-rate housing:
Recent research finds that most people want lower housing prices but, contrary to expert consensus, do not believe that more supply would lower prices. This study tests the effects of four informational interventions on Americans’ beliefs about housing markets and associated policy preferences and political actions (writing to state lawmakers). Several of the interventions significantly and positively affected economic understanding and support for land-use liberalization . . . . The most impactful treatment — an educational video from an advocacy group — had effects 2-3 times larger than typical economics-information or political-messaging treatments. Learning about housing markets increased support for development among homeowners as much as renters, contrary to the “homevoter hypothesis.”
CBS Looks at the YIMBY Movement
CBS News had a segment asking, “Could the ‘YIMBY’ movement fix America's affordable housing shortage?” The segment had a particular focus on Minneapolis, where the city’s “2040 Plan” is back in effect after a state appeals court ruled in May to lift an injunction on the plan. Just last month the Minnesota State Supreme Court denied a petition for further review of the objections, clearing the way for the plan to continue.
There is some promising early data. According to a report by the Pew Charitable Trust, between 2017 and 2022, nearly 21,000 new units were permitted in Minneapolis — most in buildings with 20 or more units. In that same time, rents in the city rose by just 1% — far less than the rest of Minnesota, which saw a 14% rent increase.
What Missing Middle Opponents Miss
An op-ed column in Next City says, “Missing Middle Housing Opponents Are Missing Important Facts.” The authors says opponents of upzoning in places like Arlington and Minneapolis “fail to adequately consider four national trends that make Missing Middle Housing essential today and in the future”:
We face a severe housing crisis — a shortfall of nearly 4 million homes.
The climate crisis is accelerating, and we need to respond with changes to our built environment. Attached, multifamily homes use less energy compared to their detached single-family equivalents. And by building more compact housing in walkable, bikeable neighborhoods near transit, we can reduce emissions and shorten hellish commutes.
Our nation is aging. For many older adults, housing options are now limited to remaining in oversized homes or relocating to age-segregated retirement communities or expensive assisted-living facilities. Missing middle housing gives people choices about how and where to age, including the possibility of downsizing in their current neighborhoods near friends or family. This is why AARP strongly endorses Missing Middle Housing.
Missing middle housing provides choices Americans want. A recent study by the National Association of Realtors found that 53% of American households would prefer to live in an attached dwelling (apartment, condo, townhome) rather than a detached single-family home if it meant they would have an easy walk to shops and restaurants. But only about 8% of our built environment delivers that choice.
Millennial Homeownership Report
Apartment List recently put out a “2024 Millennial Homeownership Report.” It says that, despite being the largest generation, millennials lag behind Gen X and Baby Boomers in homeownership. Only 45.5% of millennials own homes. By age 30, 55% of the Silent Generation owned homes, compared to 48% of Boomers, 42% of Gen Xers, and just 33% of Millennials.
Today, the Millennial homeownership rate is highest (50%) in low-density non-metropolitan regions, and gets smaller as metros get larger. It falls to 44% in markets of fewer than 1 million residents, 41% in markets of 1 to 5 million residents, and 33% in the nation’s largest metro areas.
Rental Deserts Correlated with Racial and Economic Segregation
Back in June, researchers at the Joint Center for Housing Studies of Harvard University released a working paper called “Rental Deserts, Segregation, and Zoning.” The researchers found that, “Nearly a third of neighborhoods across the US have few options for renter households, limiting where they can live and potentially perpetuating patterns of racial and socioeconomic segregation.”
Defining “rental deserts” as neighborhoods where less than 20% of the housing stock is renter-occupied or available to rent, the researchers found
that rental deserts are overwhelmingly white and higher income, and the uneven availability of rental housing is correlated with measures of segregation. Neighborhoods located in municipalities with greater land use restrictions also tend to have a lower share of rental housing, pointing to potential policy levers for opening more areas to renter households.
Shared Equity Homeownership Model
An article in Next City by Alex Cabral of the Grounded Solutions Network explores the shared equity model as a mechanism to enable people to both attain and sustain homeownership.
In a shared equity home, owners keep all the equity gained through paying down their mortgage, plus they receive a share of the home’s appreciated value. The remaining share of appreciated value is stewarded by the shared equity organization and passed to the next homeowner to ensure lasting affordability.
The real estate investment fund model, meanwhile, has demonstrated its ability to scale up single-family rental management. By combining these models, we believe we can begin to disrupt the spiral of unaffordability and restore access to affordable rental and homeownership opportunities at scale.
Cabral says that this combined “‘Homes for the Future’ model removes properties from the speculative market and supports local communities in taking back ownership of their neighborhoods from institutional investors and corporate landlords. Unlike other philanthropic housing models, there’s no need for continued intervention or investment into a home to ensure lasting affordability.”
Other States
New York Mayor Adams Pushes “City of Yes” Housing Plan
The City reports that New York City Mayor Eric Adams is seeking to rally support for his ambitious “City of Yes” housing plan, arguing that the proposal is a once-in-a-generation opportunity to undo decades of racist, discriminatory zoning laws.
In a September 16 video kicking off the final push to enact the plan, Mayor Adams said, “In the 1950s and 60s, as the Civil Rights Movement was bringing down racist Jim Crow laws, New York City took a major step backwards. New zoning rules reduced how much housing could be built, especially in white, higher-income neighborhoods. . . . But the good news is, we can fix this. The ‘City of Yes for Housing Opportunity’ is our plan to update zoning to create housing for New Yorkers of all races and incomes in every neighborhood.”
The City Planning Commission is expected to approve the zoning plan on September 25 and send it to the City Council, leaving the mayor with only two months to convince Council members to approve it.
The administration claims City of Yes will create as many as 109,000 new homes by giving developers flexibility and especially by forcing low-density neighborhoods to accept more housing. The question is whether the weakened mayor can push his proposal through the Council or whether he will be forced to accept a watered down version that won’t do enough to make a dent in the city’s housing crisis.
The proposal, a text amendment to the city’s zoning laws, contains far-reaching changes to accelerate conversion of office buildings to residential use and creating a 20% density bonus for projects that add lower-cost apartments.
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Opposition centers on changes that would allow more housing to be built in low-density neighborhoods, including allowing five-story apartments building above retail stores and an increase in allowed density around transit stops.
San Bernadino Experiment Combines Solutions
A story by Rachel M. Cohen in Vox describes a housing experiment in San Bernardino, California, that aims to address affordability at every stage of the process — cheaper to build, cheaper to buy, and still affordable for the next resident.
The San Bernardino project combines factory-built homes, accessory dwelling units, and a community land trust to lower costs and increase efficiency. By streamlining construction, maximizing land use, and capping resale values, the project may offer a model for affordable housing.
Seattle’s Inclusionary Zoning Program Led to Less Construction
A new study finds that Seattle's Mandatory Housing Affordability (MHA) Program may be counterproductive. Implemented in 2017 and 2019 across 33 neighborhoods, Seattle's MHA program relaxed zoning regulations ("upzoning") while requiring developers to either reserve some units of each project as below-market-rate rentals or contribute to a citywide affordable housing fund. The authors found that “new construction differentially declined in the upzoned, affordability-mandated areas.”
Their analysis “reveals that developers intentionally avoided MHA-zoned areas — despite their upzoning — opting instead to build on nearby blocks without affordability requirements. The differential reduction in new housing permitting between MHA and non-MHA zones could be as large as 70%, with the low-rise multifamily segment driving most of this decline.”
The researchers’ findings “point to the potential for unintended consequences when density bonuses are too small or affordability mandates too onerous. In the future, we recommend policymakers pursuing similar inclusionary housing strategies implement both stronger upzonings (larger density bonuses) and lighter, more flexible affordability mandates.”
Short Takes From Around the Country
Next City says that activists in Minneapolis are finding creative ways to help protect unhoused residents — such as building yurts to protect unhoused individuals during Minnesota’s cold winters.
Pennsylvania Gov. Josh Shapiro has signed an executive order directing state agencies to develop a 5-year housing action plan to increase affordable units in the commonwealth, Bisnow reports.
In The Atlantic [gift link[, Jerusalem Demsas writes about how the U.S. Navy, at the behest of the City of Glendale, came to give Arizona Governor Katie Hobbs a reason to veto the Arizona Starter Homes Act, which sought to legalize smaller dwellings to address the affordability crisis straining the fast-growing state.
The Minnesota Reformer says Minnesota housing developers, religious organizations, social justice groups, environmentalists and others got behind a YIMBY policy suite with bipartisan appeal this year, but none of the coalition’s main priorities made it across the finish line. Now Minnesota YIMBYs are trying to chart a new path forward after an unsuccessful legislative session.
Calendar
September 23 — Next regular meeting of ANC 3/4G (Chevy Chase). Hybrid, on Zoom and in-person at the Chevy Chase Community Center, 7:00-8:30. The agenda is here. It includes “Discussion and Possible Vote on Resolution Concerning DMPED’s Proposed Disposition Process at the Chevy Chase Civic Core.” The draft resolution “calls on DMPED to ensure comprehensive community engagement in the Disposition process.” Register for Zoom attendance here.
September 23 — (Rescheduled) regular meeting of ANC 3E (Friendship Heights & Tenleytown), 7:30 p.m., online. Register for Zoom attendance here. A draft agenda is here. The agenda includes: “Discussion and possible vote on resolution regarding Wesley Theological Seminary application to amend the Zoning Code to permit Landmark Properties REIT to build a 9 story student apartment building on Wesley’s campus primarily for American University Students and to exempt Wesley and Landmark from Inclusionary Zoning requirements.”
September 24 — The D.C. Council’s Committee on Housing will hold a public roundtable entitled "Shaping Downtown DC: Strategies for Increasing Housing and Building a Vibrant Community." Residents can share testimony on strategies they would like to see implemented to revitalize the downtown economy. 10:00 a.m., Logan-Dupont Conference Room, Lower Level Conference Center, The Square, 1875 I St., N.W., and virtually via Zoom. Watch live online at https://dccouncil.gov/council-videos/ or https://youtube.com/@committeonhousingdc.
September 24 — Webinar, “Can Housing Policy Create Connections and Build Community?” Sponsored by the Joint Center for Housing Studies of Harvard University, the event will “explore how housing and neighborhood policies can create connections and relationships between people from diverse backgrounds in current and new mixed-income neighborhoods.” Sam Pressler (Harvard/UVA) will share a new report that provides a framework for government's role in strengthening connection in communities. 4:00 p.m. Register here.
September 25 — YIMBY Action hosts a discussion with The New York Times’s Ezra Klein to discuss how pro-housing laws can make communities across the country more affordable, abundant, and livable — if they actually get implemented. 7:00 p.m., MLK Memorial Library, 901 G St. N.W., and livestreamed. Details and ticket link here.
October 15 — Next regular meeting of ANC 3A (Middle Wisconsin Avenue), 7:00 at the McLean Gardens Ballroom and via Zoom.
October 15 — Next regular meeting of ANC 3F (Van Ness), 7:00-9:00 p.m., online.
October 17 — Montgomery County Planning Board speaker series: “Practitioner’s Panel: Implementation Successes and Areas of Focus.” Hear from developers and industry experts that have leveraged relaxed zoning and other creative tools to develop attainable housing. 5:30 to 7:30 p.m. at M-NCPPC Wheaton Headquarters, 2425 Reedie Drive, Second Floor Auditorium, Wheaton, MD, and livestreamed on the Planning Board website.
October 21 — Regular meeting of ANC 3/4G (Chevy Chase). Hybrid, on Zoom and in-person at the Chevy Chase Community Center, 7:00-8:30.
October 21 — Next regular meeting of ANC 3C (Cleveland Park and Woodley Park), 7:00-9:00, online.
To let us know of something we should add, please email christopher.vaden78@gmail.com.