Renew Lehigh Valley

1
Renew Lehigh Valley

• Providing Affordable Options for All
• Presentation by
• Kevin Nelson, AICP
• Development, Community and Environment Division
• U. S. Environmental Protection Agency

2
Young Professionals and Housing

• Brain Drain or Creative Class
• How other cities are handling things
• State of Housing (2006 Report)
• Costs of Housing
• Mortgage, Transportation, Energy
• Affordable Housing at Different Levels
• Smart Growth Solutions

3
Creative Class or Brain Drain
Courtesy of Richard Florida, The Rise of the
Creative Class and How Its Transforming Work
4
Success in Other Cities

• In Rochester, the issue was called the "Brain
  Drain
• "Ten years ago instead of having huge
  corporations, 10 percent of U.S. cities were busy
  investing in young professionals. Now, 10 years
  later, they're still in these cities, and the
  cities with large corporations are failing."
• Buffalo, Rochester and Syracuse face today.
• Yet, thriving cities such as Boulder, Colo., Los
  Angeles, Calif., and Portland, Ore., offered
  incentives to young professionals a decade ago
  and are today reaping the benefits of a vast
  array of businesses launched by those same
  professionals.
• West Virginia Housing Development Fund
• This would be an excellent opportunity for young
  professionals to get involved in the housing
  discussion which could potentially impact young
  professional for many years to come.
• Jack Rossi, chairman of the Alliance Board, said,
  "We must keep and support our young professionals
  who build our intellectual capital, a critical
  piece of a healthy economy."

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Keeping Young Professionals in Town

• Programs for keeping Young Professionals in town
  must include Affordable Housing
• Consider.Arlington County, VA
• Only 25 of Arlingtons police officers and 911
  Operators live in the County.
• Only 9 of Arlingtons firefighters live in the
  County.
• Arlington County Public Schools employs 1997
  teachers, yet only 814 live in th County
• Or Cape Cod, MA
• People in their 20s and 30s are finding it
  impossible to match their incomes to the cost of
  living. Many are giving up and leaving.
• According to the 2000 U.S. Census, between 1990
  and 2000 the number of people ages 20 to 24 on
  Cape Cod declined by 23.6 percent and the number
  of 25- to 34-year-olds dropped by 20.8 percent.

6
State of Housing, 2006

• Long Term Housing Challenges
• Skyrocketing prices
• Diversity of Mortgage Products
• More Deferred Principle Payments
• Excessive Share of Costs to Housing
• 1st Decrease in Homeownership Rate in 12 years
  68.9 in 2005
• (source 2006 State of the Nations Housing
  Joint Center for Housing Studies of Harvard
  University)

7
State of Housing, 2006

• Median House Price Exceeded the Median Household
  Income by at Least Four Times in a record 14 of
  145 metro areas, and by more than six in 14
  metros.
• Young adults will generate all of the expected
  growth in households immigration
• (source 2006 State of the Nations Housing
  Joint Center for Housing Studies of Harvard
  University)

8
Projections and Cautions

• Increase for young professionals made highest
  gains since 1993 higher trajectory for
  ownership
• New products have enabled young households to
  enter the market, but beware rising interest
  rates and high prices will pull down averages.
• (source 2006 State of the Nations Housing
  Joint Center for Housing Studies of Harvard
  University)

9
Renting vs. Owning

• Wealth Gap between owners and renters is
  enormous. Under age of 40 with incomes in
  20-50K range, owners have ten times the median
  net worth of renters. (source 2006 State of the
  Nations Housing Joint Center for Housing
  Studies of Harvard University)
• Costs of renting vs. homeownership

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What Does Housing Mean To You
Houses are more than bricks and mortar. They are
part of communities. People decide where to live
based on good schools, low crime, amenities,
jobs, character, friends and family.
50 YEARS AGO housing was part of vibrant
neighborhoods with many amenities
NOW housing is separate from commerce,
workplace, activities
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Impacts of Housing Location
Our communities have an impact on the environment.
Standard development with separate land uses
results in limited choices, auto dependant
society, less time for civic engagement
50 YEARS AGO less environmental impact as people
lived near work and could walk to school
NOW most trips are taken by cars, increasing
commuting times and decreasing family time
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Smart Growth Housing

• Smart Growth Principle 3
• Create a Range of Housing Choices and
  Opportunities
• Affordable Housing is an explicit goal of smart
  growth. Policies should be crafted to accommodate
  the need and demand for housing at the local,
  regional, state and national levels.

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We Need a Range of Housing

• To support smart growth communities
• For every lifestyle and income
• For the elderly
• For couples
• For families
• For singles
• For everyone

14
Trends and Housing Affordability
Population rise to over 400 million by 2050
where will people live? Supply is increasing
by just under 1 per year, not enough to meet
demand.
15
Trends and Housing Affordability
Jobs-Housing Balance
Huntley, IL

• Increase costs
• Production
• Maintenance
• Transportation
• Energy

• Land Use patterns disperse
• workers and homes
• Need more mixed use
• communities

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What is Affordable Housing?

• Generally accepted that no more than 30 of
  income for housing
• Affordability of a home should include
  transportation cost
• Housing should be decent and in good quality
  meeting health and safety considerations.

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What is Affordable Housing?

• Affordable Housing decent quality housing that
  low-income households (those whose income is
  below the poverty level or below 50 percent of
  the median income for their area) can afford to
  occupy without spending more than 30 percent of
  their income or that households with slightly
  higher incomes (50 to 80 percent of the median
  income) can similarly afford.
• (From Growth Management and Affordable
  Housing Do They Conflict?, Brookings Institute,
  2004)

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What is Affordable Housing?

• Housing is categorized in many different ways.
  Some examples are
• Workforce Housing
• Public Housing
• Below-Market Rate Housing,
• What I Can Afford Housing,
• Moderately Priced Dwelling Units
• Assisted Housing
• Subsidized Housing
• Market Rate Housing
• Housing must be affordable relative to the home
  seeker.

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Barriers to Affordable Housing

• Production Supply and Demand
• Conversion to Owner Occupied
• Costs of Raw Materials
• Availability of Land
• Lack of Resources
• Decrease in public and private funding
• Government Regulations
• Exclusionary Zoning Practices
• Impact Fees
• Development and Approval Process
• Community Opposition
• NIMBY
• Local, Regional Resistance
• Property Values Advocates

20
Production Supply and Demand

• Real Capital Analytics reports condo converters
  has risen from 6,000 in 2002 to 16,000 in 2003,
  42,000 in 2004 instead of new construction.

In Worcester, Mass., "a growing number of
investors are helping to meet the regional demand
for affordable housing by converting aging
multifamily homes into condominiums," reported
The Boston Globe.
News Brief on Housing Costs --- According to
National Association of Home Builders economists,
the increases in wholesale wood and metal prices
over the past year could add about 5,000-7,000
to the cost of building an average-sized home.
21
Production Supply and Demand

• Urban Growth Boundaries do not cause a rise in
  home prices
• Price of land increases (50 of total cost) occur
  in places with and without UGB
• More population projected
• Development process inhibits supply of housing
• Infill is seen as a solution

22
Government Regulations
Exclusionary Zoning Practices
Development and Approval Process
Impact Fees

• In some communities fees can be up to 80,000 per
  unit, without increasing the supply of affordable
  homes

• Standard bulk regulations make moderate sized
  homes illegal

• The development process is time consuming and
  costly for developers, prohibiting the profit
  potential of housing

23
Community Opposition

• Effects of Mixed-Income, Multi-Family Rental
  Housing Developments on Single-Family Housing
  Values -- Mixed Income Housing has no effect on
  home values in communities where built, according
  to the Center for Real Estate at MIT. In
  Massachusetts, this supports the efforts of the
  Chapter 40B program.
• Home Equity Assurance Program -- Village of Oak
  Park, IL has program where it will pay property
  owners adjacent to multi-family developments if
  their home values decrease. No funds have needed
  to be distributed.

24
Housing and Smart Growth Connection

• Smart Growth Housing Provides Environmental and
  Community Benefits
• Compact communities provide mix of
  interest
• Walkable Communities provide health benefits
• Creation of convenient 24-hour neighborhoods

25
Housing and Smart Growth Connection

• Smart Growth Housing Provides Environmental and
  Community Benefits
• Use of Existing Infrastructure
• Preservation of Communities
• Supports transportation options

26
Housing and Smart Growth Connection

• Smart Growth Housing Provides Environmental and
  Community Benefits
• Accommodate Natural Resources
• Expands range of housing type and location
• Infill development preserves greenfields
  agriculture lands
• Brings housing closer to jobs

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Housing and Smart Growth Connection

• Published in 2001
• Distributed over 10,000 hard copies and
  thousands of downloads over the Internet from
  EPA, SGN website and KnowledgePlex
• Updated case studies

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Policies and Approaches for Implementation

• Land Use Planning Strategies
• Ex. Flexibility in Land Use Regulations
• Tax-Based Strategies
• Community Strategies
• Subsidies for Affordable Housing

Carpenter Village, Cary, NC Revised ADU Code
Photos courtesy of City of Cary, NC
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Policies and Approaches for Implementation

• Land Use Planning Strategies
• Tax-Based Strategies
• Ex. New Market Tax Credits
• Community Strategies
• Subsidies for Affordable Housing

Roseland Ridge Apartments, Chicago, IL Photo
courtesy of AIA Chicago
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Policies and Approaches for Implementation

• Land Use Planning Strategies
• Tax-Based Strategies
• Community Strategies
• Ex. Design Innovations
• Subsidies for Affordable Housing

Noji Gardens, Seattle, WA Infill Use of
Manufactured Housing
Photos courtesy of Manufactured Housing Institute

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Policies and Approaches for Implementation
For young people, childless couples and
empty-nesters, city living can be particularly
appealing. "There's so many things you can do in
the city without getting in your car. You
couldn't say that a decade ago."

• Land Use Planning Strategies
• Tax-Based Strategies
• Community Strategies
• Marketing Programs
• Ex. Focus on housing stock

AFTER
Photos courtesy of City of Harrisburg
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Allentown Strategies

• Allowing Accessory Housing and Home Businesses in
  single-family neighborhoods and encourage reuse
  of unused commercial and residential structures
• Allowing home occupations in single-family
  neighborhoods under certain conditions
• (referenced in Regulatory Barriers
  Clearinghouse, www.huduser.org/rbc)

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Housing Resources
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Contact Information

• Kevin Nelson, AICP
• US EPA
• Development, Community and Environment Division
• 202-566-2835
• nelson.kevin_at_epa.gov
• www.epa.gov/smartgrowth