Locals fight to fund affordable housing
Proposed cuts in the 2007 federal Community Development Block Grant (CDBG) program budget may contribute to cities’ struggle to create more affordable housing. This year, President Bush asked for a 25 percent cut in the Department of Housing and Urban Development’s (HUD) request for more than $4 billion in CDBG funding, part of which can be used for affordable housing. However, the HUD appropriations bill, which is now in the Senate, includes about $3.9 billion, a slight increase from 2006’s $3.7 billion.
Larry Wuerstle, senior financial analyst for HUD’s Community Planning and Development Division, says that each city is receiving less funding because the number of recipients is increasing. CDBG grants cannot be used for constructing new affordable housing, he says, but they can be used to improve existing structures, buy land or to fund homeowners programs.
Other issues are contributing to the lack of below-market price housing. “Market forces — escalating housing prices combined with relatively stagnant wages — have caused a huge crisis for affordable housing in most cities,” says Julie Bornstein, President of the Los Angeles-based Campaign for Affordable Housing. In response, local governments are using zoning laws and economic incentives to encourage developers to build low- to moderate-income housing.
Austin, Texas, offers developers fast-track reviews of subdivisions and site plans, waives certain fees and provides surplus city property for below-market price housing as incentives to build affordable homes. “Developers have said that they had made a decision not to build inside the city limits in part due to the time it took to get through the development review process,” says Jacqueline Mayo, the city’s public information and marketing program manager.
In a similar tactic, the Sacramento, Calif., Planning Department offers free, pre-approved architectural plans to speed up developers’ applications for building permits, reducing costs, such as legal, architectural and engineering fees, soil tests, property taxes and holding fees. Those costs are passed to the consumer as higher housing prices.
Because land is often costly, high-density development is key to creating more affordable housing, says David Fink, policy and communications director of the Hartford, Conn.-based Partnership for Strong Communities (PSC). If developers can build more housing units on smaller pieces of land, he says, they can afford to offer a percentage of units below market prices while still making a profit. Boulder, Colo.; San Diego; Sacramento, Calif.; New York and other cities have changed zoning laws to allow more dense developments and require developers to offer a percentage of below-market rate units. Massachusetts has enacted similar measures statewide.
The PSC will present a housing package to the Connecticut legislature in January. Modeled on the Massachusetts affordable housing program, it is designed to address community opposition, which often is based on the perception that affordable housing is aesthetically unappealing, lowers property values and increases traffic congestion, crime and crowding of public facilities, according to the Campaign for Affordable Housing. By promoting denser developments, the PSC housing package would make it affordable for developers to set aside a percentage of their market price projects for below-market housing. That way, the entire development has the same aesthetics, and lower-income residents live alongside moderate- to high-income residents.
The San Jose, Calif.-based Housing Trust of Santa Clara County is drumming up support for Proposition 1C on the state’s November ballot, a $2.85 billion affordable housing and emergency shelter bonding package to assist low-income renters, first-time homebuyers and the homeless. In mid-October, polls showed that 53 percent of the public were in favor of the proposition, says trust Executive Director Taylor Dial. “The big challenge is helping people to understand that affordable housing is as much a part of infrastructure as are roads,” he says.
Annie Gentile is a Vernon, Conn.-based freelance writer.