Posts filed under 'Housing'
At 7 p.m. sharp (in three minutes), with David Wluka of the Massachusetts Association of Realtors and a developer who is seeking to use the market to produce housing for folks in the 65 to 80 % of median income range.
Discussion covers:
- the continued impact of regulations that restrict supply;
- the arguments made by municipalities (impact on property values and, ugh, we cannot afford the schools costs that come with kids!); and
- how cities can address these issues (long-term contracts with municipal employees, pension reform, and insuring employees through the Group Insurance Commission).
Munis, if you have problems, come to Pioneer. We have the solutions. Just look at what Springfield’s been able to accomplish.
5, 4, 3, 2, 1…
July 3rd, 2007
Is what’s good for Springfield also good for Amherst? Friend of Pioneer Peter A. Gagliardi, leader of nonprofit housing developer HAP, Inc., has found that where one stands on affordable housing depends on where one’s property sits.
Qualified families in both towns languish on waiting lists for decent homes, yet Springfield welcomes new construction, while Amherst fought a HAP project in court for five years.
Gagliardi is the author of both a Pioneer housing paper and one of the best “Dear Deval” pre-inauguration Globe op-eds. He’s also a veteran, having slogged for decades through the mud hidden behind good intentions and pretty speeches about affordable housing.
As proven by Gagliardi’s experience, as well as his research, those who would increase the housing supply face a very different task in wealthier single-family-home communities than they do in the city. The lesson is that unless state-level regulations and incentives can adapt to this market disparity, those waiting lists will only get longer.
June 21st, 2007
Subsequent to a number of emails on the post mentioning Tom Waits, which ranged from deranged and delightful to slightly frightful, I have decided to push the celebrity mention scheme for drawing traffic to the blog. Here goes:
Paris Hilton
Lindsay Lohan
Brad Pitt
George Clooney
Please note that, henceforth, in accordance with Pioneer General Laws, Chapter 39B, Section 3(a)4.t: All blog entries forthwith must begin with, or within the first 17 1/2 words utilize celebrity names according to the provisions set forth in the present statute. No more than two names shall appear in the blog title, which shall appear at the top of the blog entry. Up to three names can appear in the first 17 1/2 words of the blog entry, unless one or more names appears in the blog title, at which point you will need to go to court and be sure to pay the Clerk of the Court $40 unless the judiciary decides that it is unnecessary. The names are to be chosen from among a list of up to 123 3/4 names determined by the Commission for Celebrity Naming (CCN), which will be composed of 13 1/3 individuals, 3 of whom will be appointed by the Governor, among whom 3 will actually be chosen by the State Police Officer standing guard right outside the Governor’s Office; 4 of whom will be selected by the Senate President, among whom will be one sister-in-law of the Senate President’s Education Advisor, one sycophant film-maker who is best known for the number of buttons missing from his shirt and how the last one miraculously is always just below the length of his beard, … more.
For those of you who are interested, our P.G.L. statute for celebrity cribs is in the subsequent chapter and has been largely unused because of the fact that most citizens of Pioneerland have been unable to get past our Chapter 40A, which is only slightly shorter and less complicated than the Massachusetts version.
June 13th, 2007
Sunday Globe’s real estate section didn’t get it right about age-restricted housing:
“Right now, there’s no question 55-plus housing is driven by demographics.”
No question — baby-boomers are driving demand for modest housing in traditionally scaled neighborhoods. The question is — Are baby-boomers really demanding houses that they can only re-sell to people 55 years and older, or is something else driving the market for such deed-restricted houses?
According to Pioneer’s survey of local zoning regulations, just over half of the communities in eastern MA have zoning for age-restricted housing (96 of 187 municipalities). Often, the only way to build neighborhoods of traditional density is through the 55+ zoning.
While some seniors are looking for neighborhoods where there are no children, it seems that the real driver of 55+ residential projects is restrictive zoning.
Lynnfield’s Master Plan states: “Another means of increasing the tax base in Lynnfield is development of age-restricted housing. These developments have a positive fiscal impact because they do not produce any school-age children.” It is perhaps this assumption that is driving 55+ building, not demographics.
The region could use more traditional neighborhoods – for seniors and families alike.
June 10th, 2007
According to Commonwealth Magazine’s 2007 spring edition, the Patrick administration is a receptive audience for Pioneer’s policy paper, Housing Programs in Weak Market Neighborhoods: Developing the Right Tools for Urban Revitalization, written by Peter Gagliardi. The report details how well-meaning state policies may actually hurt the revitalization of poorer communities. The study finds that most state programs are intended to ensure affordability in the state’s heated housing markets. In neighborhoods with weak housing markets, vacant properties, abandoned buildings, and aging infrastructure, these programs are counterproductive: restricting homeowners’ equity, discouraging the sale of redeveloped properties and concentrating poverty.
The good press is encouraging. Much work remains to get the right set of policy tools in place for urban revitalization. Pioneer continues the effort.
June 4th, 2007
Veronique de Rugy of the American Enterprise Institute. Why?
I’ve long been a booster of small business creation and the need for government to improve the general business climate. The problem is the debate has morphed into a maniacal focus on access to capital. That is important, but the folks in the small business cheerleading squad, generally because they lack strong experience in business creation (otherwise they wouldn’t be doing what they are doing…), ignore the numbers.
Along comes Veronique with a tremendous article in the Cato Institute’s magazine Regulation, which deconstructs the practices of the multi-billion dollar Small Business Administration. (The SBA provides government-sponsored loans and loan guarantees, as well as technical assistance and advocacy to and for small businesses.)
The article, The SBA’s Justification IOU, will not make fans of the agency happy by presenting evidence of its minimal impact and wrong-headed focus, but for Massachusetts the money quote is:
“Of all the unsuccessful businesses [in the 1992 Census survey], 71.7 percent of owners cited inadequate cash flow or low sales as a reason for failure while only 8.2 percent said a lack of access to business loans/credit contributed to the end of their businesses.”
Big picture takeaway? We are not going to address the need for small business creation where we need it most (core urban neighborhoods) with a continued focus on access to capital. The focus has to be on bringing folks with money back downtown. The housing reforms in the Housing Bond Bill, based in great part on Peter Gagliardi’s Pioneer white paper, will pilot a way to do just that. They are not enough, but they are a start.
May 29th, 2007
This year’s collapse of mortgage lending—also rendered as a crisis, a bubble bursting, the inevitable result of misguided policy x, and so on—has gotten a lot of press recently.
In response, some have called for more regulation, tighter credit, or another solution that’ll make the problem worse. In welcome contrast, this Springfield Republican story highlights the first requisite of a healthy marketplace: well-informed buyers and sellers.
HAP, Inc. led by Pioneer author Peter Gagliardi, helps both lenders and borrowers know exactly what they’re getting into.
HAP’s “Yes You Can” homebuyers’ fair offers good rates and clearly stated terms to borrowers—but only those who’ve taken the time to learn more about home finance. In turn, HAP introduces those educated buyers to lenders—but only those willing to offer good rates and clearly stated terms. Gagliardi describes them as “the kind of lenders we’d like our clients to do business with, not the kind of people that play bait-and-switch or lure people into mortgages that they can’t afford.”
Before either the state or the Feds make another attempt to fix the housing market, they should consider HAP’s example. A market is a game for buyers and sellers; at best, a third party can help both sides play by the rules, and then step aside.
May 15th, 2007
Just below the surface of most land-use/housing debates is the cost of educating children. A lot of towns effectively zone out many types of affordable housing because they don’t believe they will receive property tax benefits high enough to educate the children who would live there.
The UMass Donahue Institute takes a stab at answering this question based on actual cases from a number of metro Boston communities.
I’d crudely summarize their findings as a matter of cost allocation methodology. You have three choices:
- Marginal Cost of New Housing — attempts to determine what new expenditures were required by the town for the new housing units. Very easy to determine for most services (e.g. did the police respond to any calls? If not, no marginal cost), except for education. Tends to produce the lowest cost of new services for housing units.
- Per Capita Cost — Allocates the average cost of services to the units. For example, each new kid is costed out at the average cost to educate a student in that town. Produces the highest cost per new housing unit.
- “Fair Share” Approach — allocates the cost of services on a per unit. In this approach, education costs are spread out evenly across every unit of housing, new and existing.
The Donahue Institute study is advocating for the “Fair Share” approach which produced more mixed results in terms of the ‘cost of new housing’ versus property tax income. I’m not sure most towns would accept this argument, but I’m curious if this moves the argument about new housing forward. The Boston Globe certainly thinks so.
May 11th, 2007
Martha’s Vinyard and Nantucket residents are advocating for a new levy on home sales to pay for affordable housing. State lawmakers are now debating this proposal for the islands.
Lawmakers, developers, and housing advocates have been debating variations on this kind of policy for some time. Pioneer’s research shows that over half of communities in eastern Mass have zoning policies that either mandate or encourage developers of include affordable units in new developments, or pay a fee in lieu of building the affordable units. As of 2004, 11 cities and towns in eastern Mass required that a certain percent of new houses in ANY development be designated as affordable.
Some developers and real estate experts question the legality of such policies, known as inclusionary zoning. A coalition of planners, municipal officials, and housing advocates known as the Zoning Reform Working Group would like to pass legislation that explicitly authorizes communities to pass such laws.
On the one hand, inclusionary zoning policies can provide deep integration of affordable housing with market-rate houses in the neighborhoods. In addition, with limited public funds (federal, state and local) available for development of affordable housing, these policies provide a creative mechanism for building it. On the other hand, such policies can drive up the cost of building market-rate housing. Moreover, in a slow housing market, the requirement to include below-market rate houses can make residential projects uneconomic altogether, reducing development of needed market-rate houses.
While housing prices remain sky-high in Massachusetts, expect debate over such policies for some time. What are the best ways to ensure there are homes affordable for households at all income levels, on the islands and everywhere else?
May 9th, 2007
The indispensable Amy Dain reports from the provinces:
Today the Metropolitan Area Planning Council (MAPC) released its recommendations for the future growth of the region. Its goals for increased housing choice are right on.
Implementation will be no easy task, though. A recent report from Pioneer and Rappaport Institutes has shown that the current system of housing regulation does not allow for many needed types of housing to be built. To learn more about your community’s regulations, look here.
The MAPC plan calls for new apartments, townhouses, and condos near town centers, as well as more modest single-family houses for people who either cannot afford or do not need McMansions. The plan estimates that over half of the new moderately priced housing would be in suburban towns, providing more opportunities for lower income families to live anywhere in the region.
Great idea, but the cities and towns of eastern Mass have created zoning rules that make it very hard to build anything but single family homes on large lots. The incentives and mechanisms are not in place for localities to adopt rules in concert with the regional plan.
MAPC has promised an implementation plan to be released this fall. Localities on their own will not act to allow the market to meet the range of housing needs in the Commonwealth. State action is needed to let the market do its job.
Pioneer recommends the state adopt incentives to localities, exemptions from local zoning for certain compact projects, and new regulatory tools for municipalities.
May 1st, 2007
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