Housing at Risk

Affordable Housing Options

     The question of “affordable housing” is how to allow more people of lower income to live comfortably in a neighborhood, while preserving the qualities of neighborliness and community.
     Over its 12-year history, the Small Property Owners Association has confronted this question many times. We have concluded that by far the cheapest and most available housing is private rental housing, which needs to be preserved and worked with, not against.

Consider just two facts:

Fact No. 1. Private rental housing in Cambridge, Massachusetts, can be purchased currently for about $50,000 per unit. That’s the approximate average sale price per unit including a proportion of the land, according to the Cambridge Assessors Office. Even luxury private rental housing seldom exceeds $80,000 sale value per unit. Most of this housing is older housing.

Fact No. 2. Meanwhile, the rock-bottom construction and land cost in Cambridge is $125,000 per unit for brand-new housing deliberately built for low-income occupants, whether it is set-aside housing in private developments or government-funded housing. This housing is so costly that it must be subsidized in some way both initially and on-goingly to supplement tenant incomes. It is usually exempt from property taxes, so it also costs additionally in lost municipal revenue.

We are using Cambridge prices as a readily available example. The same relative difference between old and new construction values will occur in any American city.

The problems associated with new construction that is deliberately targeted to lower-income occupants are many:

1. Heavy government subsidies entail loss of local neighborhood control.

2. New construction does not fit the character of an older neighborhood.

3. The new construction must be denser than surrounding private housing in order to improve the high cost ratios involved.

4. So-called “mini-ghettoes” of low-income persons may not fit into the local community. Even tenant advocates in Cambridge have said they do not like the fact that this type of new housing places low-income people out of natural communities.

We suggest that private rental housing is by far the best alternative and needs to be worked with.

Here are some suggestions.

1. Encourage the preservation of private rental housing in its current condition. Besides keeping rent levels lower, preserving housing as it is encourages historical and community values. There are many forces, especially laws, that discourage preservation and could be changed. I could talk for hours on this topic.

2. Support low-income persons in existing private rental housing with direct tenant subsidies. This gives every local owner control of the number and quality of tenants accepted. This spreads low-income persons out. This ensures a greater degree of community between low-income and non-low-income persons. More tenants can be supported more cheaply, easing the taxpayer burden.

3. Increase the attractiveness to owners of renting to lower-income persons. Here both state and federal laws really need to be changed. The biggest danger to any rental property owner is nonpayment of rent, which is, of course, a greater risk with lower-income people. Federal law often imposes stricter rental standards and conditions, especially “just cause” eviction requirements, than state laws require, leading owners to avoid federally subsidized tenants. In addition, the laws in many states make renting to low-income tenants especially hazardous, since they cannot be easily evicted. Low-income tenants are more likely (or are perceived as more likely) to not pay their rent, and a nonpaying tenant all too often means costly protracted eviction proceedings, months and months of forever-lost rent, and, yes, damaged apartments — because the laws often allow tenants to stop evictions by reporting code violations. Money is diverted away from the housing at the very same time that the housing is being damaged by the occupants, a process that is turning many lower-income neighborhoods into war zones. SPOA supports rent escrowing as a fair way to stop this housing abuse and to encourage tenants to be responsible neighbors.