Housing News Roundup: January 14, 2016
Vacancy Rate Rises, but New Stock Is Mostly High End
Low vacancy rates have been a common factor in increasingly unaffordable rents, but recent data show that the apartment vacancy rate is on the upswing. A closer look at the data suggest rising vacancies are concentrated among high-end properties. Due to the high cost of new development, the recent multifamily construction boom has led to a large number of new luxury rentals coming on line. The vacancy rate suggests supply may have caught up with demand in this market segment, when viewed nationally. While hot markets including Washington, DC, seem to have an endless demand for luxury rentals, developer Toby Bozzuto worries about the implications for the overall population. “Every new building we built is so expensive — the land, construction, labor — that the rents we have to charge to make a feasible return are high. So to what degree are we creating a tranche of housing just for the elite, and at what point does housing become unaffordable?” Indeed, many renter households are already cost burdened, prompting interest in “B markets” and more modest units. However, the high development costs are likely to continue impeding the creation of housing for today’s cost-burdened renters.
Opinion: Pediatric Brain Research Calls for Targeted Community Investment
With an average poverty rate of 22 percent, children are more likely than other age groups to live in poverty in the U.S. Family socioeconomic status has long been known to affect children’s health, but John Barnard of Nationwide Children’s Hospital describes emerging evidence that poverty also affects pediatric brain growth. A study of high-resolution MRIs of more than 1,000 people ages 3 to 20 years old found that family income had a large and significant affect on brain surface area. Brain surface area is associated with decision making, language, and memory. Other research has connected poverty with altered brain structure and poor school performance. The documented biological effects of poverty lead Barnard to call for “smart, targeted investment in healthy neighborhoods and communities, better early education programs and thoughtful, comprehensive public-health initiatives.”
Source: The Columbus Dispatch
Analyzing Segregation in America
Black-white segregation in America’s large cities is high but modestly declining in American cities, according to a Brookings Institution analysis of U.S. Census data. Using an index in which zero denotes perfect integration and 100 denotes complete segregation, most large U.S. metropolitan areas have segregation levels between 50 and 70. Racial segregation is often paired with socioeconomic segregation, which leaves African-Americans more likely to live in areas of concentrated poverty compared to whites. This reflects not choice but the legacy of redlining, restrictive racial covenants, and other discriminatory housing policies. Although housing discrimination by race is now illegal, African Americans continue to face barriers to integration, such as steering to majority African-American neighborhoods.
Source: BBC News
Requiring Affordable Housing Impact Statements
In land use approval processes, some cities are requiring developers to assess the likely impact on housing affordability. Ordinances in Atlanta, Austin, and San Diego already require affordable housing impact statements, and New Orleans and Pittsburgh may follow suit. In New Orleans, where the poverty rate is nearly 28 percent and rents have risen 50 percent since 2000, members of the city council introduced the bill to ensure that any zoning decisions about new developments consider the impacts on affordability for low-income residents.
School Choice and Chicago’s Neighborhood Schools
Under Mayor Rahm Emanuel, Chicago has expanded school choice and closed several neighborhood schools. During the 2015-2016 school year, 51 percent of Chicago Public School (CPS) students do not attend the neighborhood school. Students living within boundaries of a low-performing school have the highest rates of going elsewhere, while top-performing schools attract more than 90 percent of those living within boundaries. Reduced attendance at neighborhood schools may create a vicious cycle that impedes their capacity to compete with charters on equal footing. Sociologist Mary Pattillo of Northwestern University notes, “Once you get this phenomenon of so few neighborhood kids going to the school… you have fewer and fewer information sources about the quality of the local public school.” There may also be implications for neighborhoods and for children left behind in schools with waning enrollment.
Source: Chicago Tribune
Hope and Reality May Collide in Public Housing Demolition
The Tindall Heights Housing Project in Macon, Ga., is slated for redevelopment, and resident Auset Reaves couldn’t be happier. She and other residents will be issued Tenant Protection Vouchers (TPV) to move elsewhere. A college student and a parent of school-age children, Reaves says, “it’s going to be better cause my son’s going to be able to go to a better school.”However, in Macon, most properties that accept vouchers are concentrated in struggling school districts. Since the value of the voucher is based on mid-level rents for a whole metropolitan area, the market rents near stronger schools often exceed the voucher’s value. Residents’ advance planning for the move is further impeded by a lack of information on properties that accept TPVs.