Housing News Roundup: May 4, 2015
Where a Child is Poor Impacts Future Earnings
A new analysis of the earning records of millions of families with children has determined that where a child is poor can matter just as much as whether they’re poor when projecting their chances of escaping poverty. “The data shows we can do something about upward mobility,” said Raj Chetty, a Harvard professor economist who co-authored the study. “Every extra year of childhood spent in a better neighborhood seems to matter.” Of the U.S.’s 100 largest counties, Baltimore City fared the worst. A related article offers an interactive map and geographically-personalized story comparing income mobility in the reader’s county with nearby counties and the nation as a whole.
In One Baltimore Neighborhood, $130M in Investments and Still Poverty
Two decades ago, developer James Rouse and city officials started investing more than $130 million in Sandtown-Winchester — the Baltimore neighborhood that was home to Freddie Gray, whose death in police custody triggered protests, rioting, and a nearly weeklong city-wide curfew. However, today there is little to show for it, with unemployment, poverty and crime rates among the highest in the city. Those familiar with the neighborhood cite the crack epidemic, labor market weaknesses, and an emphasis on building housing without a complementary focus on human capital. “In many cases, people have to be connected to their own ability to change their lives,” said Diane Bell McKoy, a top aide during Mayor Kurt Schmoke’s administration. “That kind of work calls for longer-term solutions than we are prepared to deal with in our political cycles.” Stefanie DeLuca, a Johns Hopkins University sociologist who has studied the neighborhood noted, “Having a well-maintained home doesn’t get at the larger issues that prevent self-sufficiency. The labor market and drug markets really destabilized Sandtown.”
Source: Washington Post
In Minnesota, Helping the Homeless Ages 55 and Older
Minnesota shelters are struggling to meet the needs of adults ages 55 and older, which is the state’s fastest-growing homeless demographic. The struggle to pay housing and health costs means that people this age who become homeless are more likely to stay that way. “You’re not 30 anymore. You can’t go out and get a better job or get a better education,” said Karla Bauer, of 360 Communities, a Dakota County-based nonprofit.
Source: Minneapolis Star Tribune
NYC Court Ruling Could Be Bad News for Affordable Housing Stock
New York City could be out thousands of affordable housing units after a court ruled that an Upper West Side landlord can rent apartments for periods as brief as seven days, such as through Airbnb. “This decision is a huge setback for affordable housing in the city,” said Marti Weithman, an expert on single-room occupancy (SRO) hotels and tenant law. “It allows landlords of permanent residential buildings to rent rooms out to tourists instead of New Yorkers.” The city has approximately 30,000-35,000 SROs, most of which qualify as affordable housing. The ruling applies to a subset of these units. The city can appeal the decision.
Source: New York Post
Buffet: Earned Income Tax Credit, Not Minimum Wage Hike, Answer to Income Inequality
While calling the nation’s income inequality “extraordinary,” billionaire investor Warren Buffet said raising the minimum wage would be “a form of price fixing” that would actually hurt the poor. “I don’t have anything against raising the minimum wage but I don’t think you can do it in a significant enough way without creating a lot of distortions,” said Buffett, who believes a hike in the federal minimum wage would lead to a loss of jobs. Instead, he backs changes to the earned income tax credit. “The earned income tax credit is much clearer,” he said last year. “That puts more money in the pockets of people who are working for low wages.”