Tales of 40b

The Campaign to Protect our Affordable Housing Law, has, as several of their members, people who live in 40b affordable housing units across the state, showing which housing developments they live in.

I thought I'd take a look at the housing developments.

One of the members lives at Elmwood Village in North Reading. There were 35 townhouse units built there, with 7 of them being "affordable." Those 2-bedroom units all go for $184,000 and are available to first-time home buyers who earn 80% of the median income in North Reading, or less, according to the town's website.

I checked out Realtor.com's listings in North Reading for homes that cost less than $184,000 and found 13 listings (some of them quite cute!), out of 73 total listings in North Reading -- and not a single one of them, as far as I'm aware, would be considered "affordable housing" in North Reading. So, to be accurate, approximately 18% of all the listed homes for sale in North Reading cost less than the seven "affordable" units at Elmwood Village. Furthermore, while North Reading is technically under the 10% state threshold for affordable housing, 18% of their properties currently for sale cost less than the "affordable" units. Wouldn't that mean that almost 20% of North Reading's property on the market is actually affordable, at least compared to whatever metric the state uses for its 40b policy?

Lest anyone think this phenomenon is unique to North Reading, let's check out some of the other "affordable" housing units out of people on the 'coalition for affordable housing.' Take a look at The Ridge Luxury Apartments in Waltham (note how the coalition to protect affordable housing left off the fact that these are luxury apartments). It has 264 units, with a state-required minimum of 25% 'affordable' units... which cost $1,500 a month for rent for a 1 bedroom. It's "affordable" only compared to the other units at the complex. Finding prices for apartments for rent is a bit tougher than homes, but there's literally 73 in the area of Waltham for $1,500 or less, and I found at least 11 at that price or less for rent in Waltham at this site. Few, if any, of those would be considered "affordable" under 40b, as it applies to the 10% threshold.

That's just a small slice of the picture. If people want to look into the other towns and communities, they'll probably see a similar picture. The only town which didn't have a number of homes below the sale price was Marblehead's The Reserve at Oliver's Pond development, which is including 5 affordable units amongst its 15 homes other condos on the market for over $600,000. The affordable units were going for $156,000 and there were only three homes more affordable than that in the town. A town like Marblehead really needs a whole lot more affordable housing -- the town's 500 units away from the state's goal of 10% -- but this 40b approach shows just how frustrating the law is for cities and towns under the threshold. Yes, it created 5 new units toward the 10% goal, but it also created 15 new units against it. For all intents and purposes, this doesn't really get the town any closer to the promised land.

People should be opposed to NIMBY zoning laws that try to prevent ordinary citizens from being able to afford living in the communities of their choice -- and there's a place for a policy like 40b, but it needs to be severely tweaked before election day, or voters should vote to repeal. In fact, as the Wicked Local article I just linked to says, the state has another, friendlier and smarter affordable housing law -- Chapter 40R, which establishes "Smart Growth" zones. However, that's not where developers make their bread and butter -- and, at the end of the day, that's what this is really about.

40b on the Chopping Block?

A friend just asked me to join a 'protect affordable housing' group on Facebook, to which I thought, "affordable housing is in trouble?" I googled to see what it was about... and found out that Chapter 40b is heading for the ballot. This, I'm sorry to inform my old friend, is a good thing -- though I'm not excited that the proposal is to repeal 40b and not reform it.

While I'm generally anathema to ballot questions, this is really one of those times where it makes sense. Why? There are too many powerful interests on Beacon Hill who try to squish any reform of Chapter 40b every year. None of the reform bills ever see the light of day, getting a vote in the full house -- they're all squished in committee.

This, despite the fact that people widely admit there are deep and serious flaws with Chapter 40b. The biggest flaw of which is while 40b allows developers to go into cities and towns and ignore their own zoning regulations, in favor of many units on postage stamps, the law doesn't actually increase the percentage of units in the town with affordable housing, for all intents and purposes, because the developers only have to make 25% of their units be affordable. 40b only kicks in if towns have less than 10% of their housing considered affordable under the guidelines of 40b. Now, if developers had to make 75% of their units be "affordable," making a real dent in a town's number of affordable units, that may be a different story, but that's just not the case. So, not only do developers get to ignore the town's zoning, but they don't even have to get a town any closer to reaching the minimum requirement for affordable housing.

Another huge problem with chapter 40b is 'affordable housing' is essentially defined as affordable for someone who earns 60% of that community's median income. In many towns across Massachusetts, that's still a very, very tall order to be "affordable" to many people wishing to live in those communities. If you're a single mother of two, making $50,000 a year, trying to get your kids into the Brookline school system, you're not going to have much luck with the state's 'affordable housing' bill. Furthermore, in many of those communities, you'll see dozens or hundreds of homes for sale that cost less than the "affordable units," but aren't considered "affordable" by the state for purposes of the 10% threshold.

There's a whole lot of flaws with Chapter 40b in Massachusetts, and powerful special interests have kept it that way. The only question I have is if a full-scale repeal is the answer. I wish this ballot question reformed Chapter 40b, rather than repealed it. We have a severe need of affordable units in Massachusetts, just to keep our best, brightest and most hardworking young adults here in the state. However, it's fair to say that not only is Chapter 40b failing miserably to do that, but it's primary interest at this point is clearly not to create affordable housing, but allow developers to bypass town zoning laws to make even more money.

Perhaps the only way to move ahead on real affordable housing policies that work in this state is for the people to rise up and say no to this broken, special-interest state law. Maybe at that point, we'd be able to create something both more effective at addressing the problem and fairer for communities.

The Housing Market: Willing or Able?

The Globe says there are people who could buy homes... but just aren't. I look around local real estate and there's plenty of available homes for rock bottom prices. I saw one condo a stone's throw from the beach in Lynn (in the Diamond District) for 40k. It was small and a 1 bedroom, 1 bath, but still, that's 1 or 2 year's salary for a condo less than a 2 minute walk from the beach. The mortgage on that would be less than a lot of people's rent. That wasn't the only 1 bedroom condo in Lynn for 40k -- and some of them were much bigger (though, without the beach).

But is it really a bad decision for someone who may want a house and could hypothetically afford one to stay away from the market? Many people who aren't unemployed or underemployed (14% of the country) are afraid of losing their jobs. A lot of those people have good reason to be. None of those people should be burdening themselves with homes that could endanger them in the future.

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Slightly off topic, but I'm not sad to see the housing market crash at all. My parents bought the house I live in for ~25k in the 1970s -- less than what my Dad actually earned as his yearly salary (granted, he played in the NFL back then). I remember going to college and thinking I'd never be able to buy a house, short of being married.

Now, I look at the market and see hope. If I weren't one of the above 14%, I would be calling up the local real estate agent to see that Diamond District condo, looking forward to walking my dog on the beach on a daily basis. Alas.

Sonia on LeftAhead!

Note: Sonia is the first in a series of candidates we're welcoming onto LeftAhead as the local election season heats up. If you're a candidate running for something and want to discuss the issues and the race with people who actually care, send me an email and we'll book you for one of our upcoming shows. We're looking forward to hearing (from) you.

Today, we had a very special guest, Sonia Chang-Diaz, on at LeftAhead. Lynne, Mike and I took up all kinds of issues during the podcast and asked Sonia for as many details as possible. Lots of tough questions and issue specifics were asked, and we got some pretty good answers.

Sonia is particularly thoughtful on the core issues facing urban areas such as education and housing; I also found what she had to say about taxes toward the end very refreshing. Lynne was at least slightly concerned about the new debt this state is taking on through the recently-passed (and soon to be signed) transportation bond bills. While Sonia hasn't made a cost-benefit analysis on the transportation bond bill yet, she also shares some of Lynne's worries. Here's a window to Sonia's soul re: tax philosophy.

I always look with a weary eye on taking on debt. How does our tax policy work? One thing we [at the Massachusetts Budget and Policy Center] always try to get out there and give people a good grounding on is the theories of fairness that are generally recognized when talking about tax policy... one of the theories is the 'use principal' - the idea that the people who use the goods should pay for them. Generally speaking... the use principal is not the fairest... I think it would strike people silly to structure a system that only the people who use a police system should pay for it... if you get mugged, you're charged a fee. That's not how the public system should work.

That's why generally the use principal is not one that should be our guiding principal when talking about taxes. But, the big exception to that ... is longterm infrastructural costs - for things like roads, bridges... that are going to be used over multiple generations in a state, where in no cases does it make sense to share costs across time and not just across the population that currently exists as a state.

Pretty nice drapes on that window, huh? If only the Republicans in D.C. got that principal on things like a certain war in a certain part of the country which is being bought and paid for by people my age (23) and younger, maybe the world would be a better place. Sometimes a bond bill makes sense - and I've actually come out in favor of Governor Patrick's bond bill, because in the long run doing these projects now will save money (and lives) over inflation in the long run. But we need more thinking on Sonia's line, as a whole, across the state and country. With that, she made for a very nice guest and I'm hoping people will listen.

Also: Included in the tags are all the issues we hit on the show.

A Home Out of a Horror Movie?

I'm not sure I could be friends with someone who lives here.

Isn't it at all possible that Greater Boston could develop affordable homes, preferably no where near malls (never mind connected to them)? Can't we learn anything? If we want to attract all the young talent we develop here, we need affordable places for them to live. We don't need - at all - places like "Nouvelle at Natick." How was that article front page news anyway?

This blog deserves a new tag: Things that make me go 'ugh.'

Gov Patrick: New Green Policies

I'm sure many of you will read about Governor Patrick's new plan on sustainable energy; hopefully, it will make as much sense to everyone else as it does me.

The best idea of the lot:

Other changes encourage the creation of “pedestrian-friendly” districts and neighborhoods that mix commercial, civic, cultural, educational, and recreational activities with parks and homes. In housing, the principles call for building homes “near jobs, transit, and where services, including water supply, are available.” In addition, the principles would “foster the development of housing, particularly multifamily and smaller single-family homes.”

Also included are the removal of affordable housing and land preservation grants that were actually having the opposite effect - go figure.

Governor Patrick determined that the Commonwealth Capital Scorecard did not properly apply to these grant programs, and could actually discourage some affordable housing projects and undercut attempts to protect the Commonwealth’s most valuable habitat land.

I'm a fan. There's nothing better this state could do than reexamine how we do housing - and try to create more housing in more efficient ways. There's no reason why we can't create better housing in this state that a) makes things more convenient, b) is less expensive, c) is an improvement over what they otherwise had available and d) is energy-efficient. It'll take serious investment in infrastructure, but we can do it. Best of all, the cities and areas that need help the most would probably get it.

Born Again Town Centers

I want to hear more about this: a loose plan that calls for more redevelopment around town centers. I'm a hard-core proponent of revamping what we already have, instead of just building further and further away from the metropolitan area. Let's encourage more low and medium income housing, a reduction of energy costs, environmental friendliness and more public transit. Let's also encourage the vibrant culture these areas are filled with that McMansions with hour-long commutes to get anywhere will never offer.

Of the many places I eventually may consider moving to, I seriously dig the idea of those nifty lofts that were once old factories in brink cities like Lynn and New Bedford. We need to encourage the development of the old urban centers of smaller cities and even towns; it's a life that would well suit me. One of the keys to fostering a better environment for these cities is to get new people willing to move into them - quality, affordable housing, surrounded by lots of culture (restaurants, galleries, theatres, etc. ) is one way to do that. With more people, of mixed income, moving into these areas - suddenly communities will see all-around improvements. Everything's linked to housing, from the schools our kids are enrolled at to the commutes we choose to live. All of those things can be improved if there's some serious planning at the state and local levels, focused on revitalizing town and urban centers. Hopefully reports such as the one I linked will lead to more revitalization of towns and cities in ways that just make sense across Massachusetts.

Gov Patrick Proposes Changes on Foreclosures

I'll let you all analyze it, but here's part of his press release:

Proposed Legislative Action

• The criminalization of mortgage fraud
• Prohibiting abusive foreclosure rescue schemes
• Creating a mandatory pre-foreclosure filing notice with a copy to be filed with the Division
• Establishing a central repository of foreclosure notices at the Division; and
• Updating various provisions of the laws that currently govern the foreclosure process.

Consumer Advocacy/Education Action

• Enhancing the Division’s mortgage hotline. The Division will partner with the National Consumer Law Center and NeighborWorks to implement a process whereby homeowners can call the Division’s toll free number and be directed to appropriate resources for assistance.
• Implementing an awareness campaign designed to encourage homeowners having difficulty maintaining existing payments to seek immediate assistance by actively promoting the Division’s toll free number and NeighborWorks 24 hour foreclosure prevention hotline.
• Developing a list of reputable foreclosure counselors that homeowners calling the Division’s mortgage hotline can be referred to and
• Developing a listing of lenders willing to assist homeowners who are at risk of foreclosure.

Regulatory Action

• Increasing the net worth/bonding requirements for licensed mortgage lenders and brokers. This action will raise barriers to entry thereby ensuring that companies with a limited financial stake cannot secure a license to do business in the Commonwealth.
• Increasing licensing and examination fees for licensed mortgage lenders and brokers to increase enforcement capabilities and create a mortgage fraud unit.
• Increasing the education and experience requirements for licensed mortgage lenders and brokers;
  Adopting a statement on subprime lending parallel to the draft federal guidance currently out for comment

Partnerships Action

• By building on the partnerships between government, non-profit organizations, and industry created during the process of crafting the Mortgage Summit Report, the Division of Banks and other partnering entities can establish subcommittees or small working groups from members of the working groups and others within state government to focus on specific issues including:
• Reviewing and identifying false, deceptive, and misleading advertising practices
• Reviewing sales practices of real estate brokers and salespersons that refer clients to mortgage lenders and brokers
• Improving the existing process of mortgage disclosure
• Improving existing pre and post closing consumer education
• Creating a web site on financial education; and
• Developing a foreclosure intervention mortgage program.

The Globe Talks Starter Homes

Hopefully something will be done on the issue. It'd be nice to be able to afford a house before I'm 40.