Housing News Roundup: June 2, 2015
Restoring Philadelphia’s Multitude of Old Rowhouses
In the city of Philadelphia – where 38% of homeowners earn less than $35,000 a year – the answer to the problem of affordable housing may be repairing still-standing, yet-neglected rowhouses that dot the city. Two organizations are advocating for different approaches to finance repairs while preventing displacement. A “flip tax” proposal would increase the transfer tax if a property sells more than once in 24 months, adding funds to the city’s Housing Trust Fund. The Healthy Rowhouse Project would use a combined housing-health policy as the base for a range of new financing tools to help low-income homeowners afford repairs and maintenance. “Our brick rowhomes are those houses that the wolf couldn’t blow down in the three little pigs story,” said Karen Black, a former civil rights lawyer and current CEO of May 8 Consulting. “They can last another century if we take care of them, but because we have so many low-income homeowners, we have many people living in homes who don’t have the money to take care of them.”
Source: Next City
Retirees Struggling to Pay Housing Costs
Despite being several years removed from the housing collapse, many older Americans continue to have difficulty making housing payments, sometimes turning to their retirement savings to make up the difference. According to Federal Reserve data, the share of people 75 and older still paying off a mortgage increased from 8 percent in 2001 to 21 percent in 2011. This can lead to financial disaster “if their health deteriorates or their savings run short,” according to Business Insider. “They’re more likely to need help from the government, charities or their children. Or they must keep working deep into retirement.”
Source: Business Insider
Costs and Benefits of Proposed Changes to 421-a Program
New York City Mayor Bill de Blasio’s plan to change the city’s 421-a tax break by lengthening the tax abatement period and increasing affordable housing requirements would add $2.8 billion in costs over 45 years, raising the total to $9.9 billion. The changes are part of his effort to grow the city’s affordable housing stock. The revised program would subsidize 25,500 affordable units over a decade; the current funding level would add only 12,400 units, according to Deputy Mayor Alicia Glen. The per-unit cost would drop from an average of $573,000 to $391,000. “That still sounds like a lot of money, but we will have cut the cost to the taxpayer by a third and generated twice as many units under the program,” she said after speaking at City Hall hearing.
Source: Capital New York
Blind to the Income Gap
A cultural blind spot may be reducing U.S. political will to tackle the growing problem of economic inequality, according to a new study by Vladimir Gimpelson and Daniel Treisman. “The rich tend to think that they are poorer than they are, and the poor tend to think that they are richer than they are,” according to the paper. “Both believe they are closer to the national median than is, in fact, the case.” Income for the top 400 Americans climbed 53% in 2012. ”If the public does not know how high inequality is, we should not expect the actual inequality level to predict policy preferences and political behavior. But perceived inequality could still be politically important.”
Source: CBS News
Fair Share Workaround for NIMBY
Lower-income people benefit when living in higher-income areas – but that doesn’t necessarily mean that communities welcome them with open arms. “People basically said, ‘We’re in favor of affordable housing, but it shouldn’t be in a residential neighborhood,’” said Peter Gagliardi, of the non-profit HAPHousing, when discussing a community meeting about turning an old farmhouse into affordable housing in Amherst, Mass. “Some of the things that were said were on the hateful side. It happens often, it’s the Not In My Backyard Syndrome.” However, Massachusetts’ 40B state statute – which has spurred the construction of 34,000 affordable housing units since it was passed in 1969 – helps developers get around such objections and exclusionary zoning ordinances when proposing to build affordable housing in an area lacking its fair share. A Tufts study of 40B controversies found that residents’ concerns generally did not come to pass.