Define affordable housing. Or, how about work-force or attainable housing?
It”™s not that simple ”“ simply because there are so many different interpretations of these terms.
There are other factors that influence the definitions ”“ geography, median income, government involvement. While we may not agree on the terminology of it, however, few will dispute the need for it ”“ a lot more of it.
“However you define it, the key to work-force housing is that it must meet the needs of the people who provide the services we depend on ”“ teachers, police officers, nurses, firefighters and other public servants, as millions of Americans in the service and retail industries,” according to The National Association of Homebuilders.
Young professionals should be included on that list, those who find it easier and cheaper to live in New York City than in their former hometowns in Fairfield County.
“What we are building is not what young professionals need,” David Fink of the Connecticut Partnership for Strong Communities, a housing advocacy group, told staff reporter Bryan Yurcan in a story this week in the Real Estate Section (Page 26).
“They”™re voting with their feet. We”™ve lost more 25- to 34-year-olds since 2000 than any state in the country. If jobs are plentiful somewhere else, and housing is less there, why would you stay in Connecticut?”
Last month, the U.S. Census Bureau released figures that showed real median household income in the nation was up. In Fairfield County, median household income was $76,671. Not bad. However, in 2006, HomeConnecticut, a proponent of affordable housing, found that 154 of the state”™s 169 towns are unaffordable for a family earning the median income and trying to buy a median sales price home.
The median household income is nothing more than what it says, for when you break it down town by town, you find, as HomeConnecticut did, the income doesn”™t mean much when the median sales price can exceed $1 million, as it does in Greenwich, New Canaan, Westport and Darien.
The problem, not surprisingly, is that real estate prices burst through the stratosphere over the last seven years while wage growth lurched along, setting the stage for the housing stall, which was exacerbated by the mortgage defaults spurred by the subprime mess.
And all along taxes continued to rise, leading to an increase in bankruptcies and foreclosures; even mortgage lenders are filing for bankruptcy. Lenders have taken back 355,624 homes so far this year, according to Foreclosures.com.
The high cost of housing is hitting businesses, which are finding it difficult to attract young professionals who are turning down offers due to untouchable, or at least pocket draining, rental and mortgage payments. It”™s one of the reasons young people are leaving the state.
Â
The powers that be in Hartford, spurred by groups such as HomeConnecticut, passed an omnibus bill that included a section on Housing for Economic Growth Program. Under that section, which took effect July 1, the bill provides incentives to towns that zone land for developing housing mainly where transit facilities and infrastructure already exist. It goes on to state that at least 20 percent of the units must be affordable to “low- and moderate-income people.” And the bill defines those people as not earning more than 80 percent of the area”™s median household income and adds that a unit is affordable if it costs no more than 30 percent of a person”™s annual income to live there. And in closing a loophole, the bill rules that those affordable dwellings remain so for at least 30 years.
It”™s a start.
But, is making 20 percent of the total units affordable good enough?
Maui County in Hawaii didn”™t think so. The good people of the 50th state may have gone a little too far in the opposite direction.
The Maui County Workforce Residential Housing Policy requires 40 percent to 50 percent of all housing in a new development to be affordably priced; the median income there is $58,771. The policy affects any development of five or more residential units, as well as hotel or time-share projects of three or more units.
Can you imagine trying that in Fairfield County? Well, it”™s not flying too well right now in paradise where a Canadian developer is seeking a court order to block the county from imposing the law.
So, what exactly is the right mix for a community, how does one determine it and who should be in charge of overseeing its implementation? Perhaps Freddie Mac, after all, the stockholder-owned corporation that was created by Congress 37 years ago to ensure a “reliable supply” of funds to mortgage lenders in support of homeownership and rental housing, should be in charge. Habitat for Humanity”™s heart is in the right place, but doesn”™t have enough juice to turn things around.
It”™s in the business sector”™s interests to do more to ensure there is affordable housing here. If we complain we”™re losing quality candidates due to cost, then why not do something about it?
There”™s legislation on the table in Washington that would raise the limit for loans from the Federal Housing Administration, which in theory would boost the amount of money in the mortgage market. In addition, the legislation would use surpluses in the FHA to create an affordable-housing trust fund that would be used for home-buying grants.
The answer to creating affordable/work-force/attainable housing is elusive. Returning to company towns of old, where working, living and dying all happened in the same place, is not the sole answer. But it may hold a grain of an idea.
Â
