From the Archives: Concerns about the affordability of 'affordable housing' in Charlottesville

Publisher's note: This article was originally published on Examiner.com on April 6, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

This was my first article published on Examiner.com. Eventually I wrote about 500 articles that appeared on the now defunct news site over the six years between April 2010 and June 2016.

Concerns about the affordability of 'affordable housing' in Charlottesville
April 6, 2010 3:15 PM MST


According to a recent report in the Daily Progress, Charlottesville “has adopted a goal of making 15 percent of the city’s housing stock affordable for those making less than 80 percent of the area median income.”

An earlier Daily Progress article noted that raising Charlottesville’s affordable housing percentage from 10 percent to 15 percent “would require the city to commit an average of $1.7 million each year until 2025, or a total of roughly $25.7 million. This would be needed to add and preserve 2,350 affordable housing units.”

Charlottesville suffers many of the same problems that communities across the United States do.

Housing policy expert William Tucker once explained that "researchers estimate that zoning delays and building- code requirements add some $15,000 to $30,000 to the price a new home in many parts of the country. ‘Starter homes' -- simple, no-frills structures that first-time home buyers can afford -- are almost impossible to build in exclusive suburbs. Apartments are fought everywhere. . . . Then people wonder why we have an 'affordable housing problem.'"

We need to reframe the debate by removing the term "affordable housing" from our lexicon. "Affordable housing" is a weasel word that confuses more than it assists us in discussing housing policy. All housing is affordable to somebody. We should rather talk about low-income or moderate-income housing. That's the real issue.

Circulation of Housing

Over time, housing built for affluent people deteriorates and loses its value for the original owners. It then becomes available to lower-income groups. This scenario has been played out across the country. In cities like Philadelphia, Milwaukee, and Richmond, houses that were once mansions owned by rich people have been subdivided into apartments for low-income tenants.

Mayor Dave Norris and others would like to see a greater emphasis placed on low-rent units today, so that 10 percent of the county's housing stock falls into that category. Can you imagine what low-rent units built for 2010 will look like in 50 years? They will decay so rapidly that by 2060, they will be mere shells, inviting disintegration, grime, and crime. Such decay may happen even sooner.

The flexible and adaptable housing market provides better long-term prospects. Whenever a developer builds a rental unit for a middle- or upper- income tenant, he frees up a unit that tenant formerly occupied for a lower- income resident to move into. That resident's former apartment then becomes available for someone from an even lower income group.

Hazards of Government Intervention

When government intervention -- whether in the form of subsidies or rent control -- takes place, the housing cycle becomes disrupted. The supply of housing does not circulate fully or smoothly, driving prices up. This makes rents and mortgage payments higher for everyone.

"Affordable housing" by design has to be cheap or low-quality housing. If it isn't, the builder has to lose money on it (in the absence of a subsidy from taxpayers).

Government intrusion in the marketplace interrupts the circulation of housing that makes older units "affordable" (relatively less expensive) and brings new, higher-quality units onto the market. It may seem paradoxical, but if we want "affordable" housing in the future, we should be building "unaffordable" housing today.

Mayor Norris and his fellow council members are well-intentioned. It is good to make home ownership available to as many people as possible (provided that they can legitimately qualify for mortgage financing) and also to prevent homelessness.

Intervening in the housing market through subsidies and regulation of housing providers, however, will do little more than shift the problem either from one taxpayer to another or from one jurisdiction to another. After all, the housing market of the City of Charlottesville is not self-contained; it is integrated with the markets of Albemarle, Fluvanna, and Nelson counties. Other areas beyond those boundaries are affected, too.