Thursday, March 3, 2011

When is Density just the Density of the Wealthy?

Urban housing density is great. However, there is density and there is density. The choice is not rentals/density versus NIMBYism/status quo, as Yglesias has presented the problem. The EMMCA blog explained the proposed design of the Hine Jr High site. Here I bring up a different set of issues. Density, even in mixed-income projects, can in actuality become the concentration of wealthy residents.

In the redevelopment of the Capper-Carrollsburg public housing site, there are far fewer rentals and many more single-family homes than before. The financial crisis has stopped the construction of the remaining rentals (321) that would merely replace the original number (707). No matter what you think about redevelopment, density has decreased there.

The developers of Hine Jr High have not stated 1) how many rentals (as opposed to condos) they will have and 2) how many low-income housing units they will have. Rentals matter because they can, though not necessarily, be more affordable than condos. At a meeting, the developers told me that they would have senior low-income housing, but other forms of low-income housing were not discussed. While senior housing can include a variety of income levels, more general low-income housing can be for those with households as high as 80% DC Area Median Income ($82,800). Workforce housing can go to those with 80-115% of DC Area Median Income (between $82,800 and $119,025 household income), while workforce rentals can allocated to those making between $50,000 and $60,000.

Most DC residents are priced out of market-rate units and likely out of any low-income units they build. According to a fall 2010 DC Fiscal Policy Institute report based on Census data,

District-wide, median incomes rose from $56,190 in 2007 to $59,290. However, the most significant income gains were made largely in an area comprising Wards 2, western parts of 6 and the southern half of Ward 1 (defined by the Census as “PUMA 5”). Median household income in this area rose from $60,000 in 2007 to $74,000 in 2009. In other areas of the city, incomes fell or remained stable.

These units would be out of the price range of full-time elementary school teachers ($49,781), LPN nurses ($38,941), security guards ($29,401), and cashiers ($19,757), as well as hourly LPN nurses ($15.72), security guards ($14.13), janitors ($11.57), and cashiers ($9.50) (Housing Policy in the United States 2010), as well as the thousands of interns and researchers who visit Ward 6 every year and single people more generally.

Cities around the world are competing with each other for tourism, businesses, and developer dollars. Cities are also competing to attract well-paid professionals, thus proving attractive environments for, in Richard Florida's words, the creative class, as well as the less-creative-more-well-paid class. We can see the creation of segmented housing markets, in which luxury rentals and condos exist in a fundamentally different market from workforce or low-income housing. As a result, developers have sought to cater to and take advantage of the increasingly well-off by providing more and more luxurious and costly urban residences. This means that the wealthy also need more money to compete for these residences, and thus their lives become more expensive. Without concerted effort, density might just lead to the dispersion of the poor/middle-class and density of the wealthy.

8 comments:

  1. I think there should be set-asides for critical working-class folks, to encourage them to live in the communities they serve. That means teachers, nurses, police, etc, etc...

    Unfortunately, "affordable housing" has long been a kind of Trojan Horse to provide housing for the extremely poor. So the teachers, nurses, police, and others still get priced out of the market, but at least we have concentrated batteries of poverty that end up adversely affecting their neighboring communities. The worst of both worlds.

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  2. Without concerted effort, density might just lead to the dispersion of the poor/middle-class and density of the wealthy.

    Ah, right. Here you go: just as I was saying. Providing housing for "the poor" and for "middle-class" are two entirely different things. One conveys a social cost, the other a social benefit. We should be working towards regional solutions to the problems of housing the poor. For too long, we've just assumed they'll live in the city and DC taxpayers will foot the bill, and the suburbs reap the benefits.

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  3. "As a result, developers have sought to cater to and take advantage of the increasingly well-off by providing more and more luxurious and costly urban residences."

    Well of course. They're developers (i.e. capitalists, i.e. interested in maximizing profit). IF the goal is to increase affordability / economic diversity of housing in the neighborhood, who should shoulder the burden? Should it be the developers? Should it be the ultimate owner (that is, should the designation of a housing unit as "affordable", be it middle- or working-class affordable, convey with the deed and therefore be binding on the seller and next owner)? Should it be the government?
    It's fine to say that there should be more "affordable" or "workforce" housing, but who should pay for it? If it the developer, then at some point, which of course will vary from project to project, the developer will just say forget it and not build the project at all. Would an empty development site like Hine be better than one full of wealthy folks?

    In my opinion, the key is not just to focus on the putative problem (here, there is not enough workforce or low-income housing), but also the solution: if that is the case, then who shoulders the cost of increasing economic diversity?

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  4. Hi Dan,
    My main intent with the article was to complicate the notion of density because everyone is talking about the benefits of urban housing density; there are many possible density outcomes. EMMCA talked about the various aesthetic outcomes. I was bringing up the various economic outcomes.

    You are right to ask these questions. The Hine developers have already agreed to build affordable housing within the site, so this means that they have already received money or will soon receive money from the DC and/or Federal Govt (in some form: direct subsidies, tax credits, low-interest loans, etc). How do these incentives actually work? What are the actual consequences in real projects? I don't know, but I'm interested to know.

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  5. Hi Dan,
    Good points -- and they raise two further questions. A relatively easy one: Why and at what price should taxpayers transfer common land to private developers?
    A relatively hard one: I don't think developers are a special class whose access to profit trumps the access of the majority of DC residents to decent housing. If capitalism is, as it seems to me also, unable to meet the housing needs of the majority of DC residents what is the alternative?

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