REwired
REwired RSS FeedRSS

new REwired blog header
Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Investments Lending

The poverty housing industry is a problem

We need to develop affordable housing in all communities

February 26, 2016

As a Supreme Court ruling on housing policy loomed and unflattering depictions of the affordable housing industry circulated, I prepared for a relevant American Bar Association panel on housing policy. We explored incentives for creating affordable housing in “high opportunity areas” rather than concentrating such projects in distressed, low-income, minority neighborhoods. Fair housing advocates and nonprofit affordable housing developers, normally natural allies, generally differ on how to go about building affordable housing in these desirable locations. As deputy general counsel of a non-profit that fosters housing development through a network of nonprofit housing developers, my views are heavily influenced by the developer camp.

As I honed my remarks for the ABA panel, I happened upon a term of derision, the “poverty housing industry.” It is supposedly an alliance of large nonprofits, politicians, state and local housing authorities and grass root organizations that justify and enable the concentration of affordable housing in high poverty areas. 

The term does a disservice to numerous nonprofit developers, large and small, doing affordable housing the right way, and for a long time, in distressed communities. In an age of limited funding, any discourse that fails to convey the full picture and motivations of practitioners in this space impedes much needed development. The term detracts from a fair-minded discussion to resolve policy issues around affordable housing placement.

Rather, the nub of the conflict and the roles played by well-meaning advocates and well-meaning developers is crystallized in the Supreme Court case, Texas Department of Housing and Community Affairs (TDH) v. Inclusive Communities Project (ICP).

ICP, a fair housing advocate that helps disadvantaged minorities move from distressed areas, argued that TDH, the state’s housing agency, violated the Fair Housing Act (the “Act”) by disproportionately awarding tax credits to affordable housing developments in distressed minority communities. The end result was a concentration of such housing in these neighborhoods and a disparate impact on minorities. TDH argued it didn’t intend to discriminate and that ICP must show intentional discrimination by TDH. The Supreme Court agreed with ICP and held that a disparate impact analysis was permitted under the Act.

Fair housing advocates were elated, believing it would be easier to prove discrimination. Conversely, developers feared it would be harder to get affordable housing built in distressed areas or elsewhere if housing agencies shied away from supporting development in distressed or lower-opportunity neighborhoods.

We need to develop in all communities.

We need more affordable housing, and not only for the poor, but for nurses and teachers that qualify for affordable, mixed-income housing. Too many “high opportunity” communities vigorously resist affordable housing. Tasked with garnering community approval in a “high opportunity” area versus a more welcoming, distressed or lower-opportunity community, the developer will choose the path of least resistance. In any event, we must push for more housing in “high opportunity” areas because that’s where tenants will find jobs, better educational opportunities and safer environments, but at the end of the day more housing must be built, wherever it can be sited.

Affordable housing must not be built on an island.

Affordable housing must not be isolated, built on an island. It should positively affect the community, incorporating elements like mixed-income housing, community centers and retail opportunities.

Developers should collaborate with other nonprofits to provide “housing plus” on-site services like adult learning and after-school tutoring. These services are investments in communities, families, and particularly children.

Housing developments in distressed neighborhoods are often associated with public schools with low test scores. These underperforming schools should be adequately resourced and improved, but we must also adequately resource:

  • “Housing plus” efforts at housing developments (including public housing)
  • The provision of housing vouchers for families seeking educational opportunities for children in high opportunity areas
  • Programs that transport children to communities with better educational opportunities
  • Charter schools with the independence to try different approaches. It is not enough to suggest that all kids trapped in a poor school environment should sink or swim together in a failing school, awaiting a renaissance that may never come.

And similarly, housing developments in high opportunity areas must be integrated into the community. Besides the features described above, these developments should incorporate parks, and attractive architecture and landscapes. Mixed-income developments should be given high consideration. The income mix will provide for a more sustainable and community-acceptable project.

Affordable housing done right is being built in both distressed and high opportunity areas.

For decades many nonprofit housing developers have been doing housing the right way, which often entails offering housing with services that help tenants help themselves, and ensuring a harmonious integration of the development into the surrounding community. These developers are “known entities” in the community. This familiarity facilitates their work in both distressed and high opportunity areas, and it furthers their long-term aims to lift individuals and communities.

For decades Foundation Communities in Austin, Texas, has developed affordable housing communities and today it owns and operates 18 communities, offering services like daycare, financial counseling, and medical care.

It will construct the first affordable housing development in downtown Austin in 40 years, a $20.5 million development consisting of 135 single adult, efficiency apartments and on-site benefits such as health services and financial counseling.

For decades The Neighborhood Developer (TND) has created affordable housing in distressed parts of Chelsea, Massachusetts, for its lower income population. Its strategy is to develop 20% of single-family homes on a block, to create affordable housing with the added benefit of attracting market-rate buyers for the remaining homes, bringing greater stability and investment block by block.  Property values have increased.

Building on its long-term community investment and a strategic goal to graduate to larger projects, TND partnered with the city of Chelsea, its residents and a for-profit developer on a $73 million dollar mixed-income, transit-oriented project to transform the formerly blighted Box District. It offers over 200 units of affordable and market rate housing, a public park, resident services, and Connect, a collaborative of nonprofits offering financial education and skill development.    

For decades, Project Place has offered its homeless clients meals, case management services and employment opportunities. After neighborhood gentrification, Project Place recognized a need for affordable housing, and so it sold its mortgage-free building and built a new facility in a grittier area, in near proximity to downtown Boston, jobs and public transportation. It won community approval for an $11 million, mixed-used project that included 14 efficiencies for homeless people.

Project Place learned some fundamental truths many years ago after it polled its clients on their pressing needs and sought to address them. Without a stable home, it’s hard to bathe consistently, to provide contact information when applying for a job, to focus in school, to get a good night sleep, to do what most of us take for granted.  So, Project Place, like many nonprofits, stretched and embarked on a mission to build housing where and when it could.

Let’s celebrate any and all efforts to build “done right” housing in all communities that will have it, and knock down barriers to construction in those that should have more of it. 

Comments powered by Disqus