Charlottesville's 'Affordable Housing' Trap

The announcement that Charlottesville's City Council wants to increase the stock of so-called "affordable housing" by a significant fraction sent me back to look at one of my earliest blog posts.  Before revisiting that piece (which was the republication of an article I wrote in 1997, for what it's worth), let's look at this week's news.

Rachana Dixit wrote in the Daily Progress on February 1:

The City Council has agreed that Charlottesville’s affordable housing stock should increase to 15 percent of all city housing in the next 15 years.

“Housing is just as important as the other infrastructure we invest in in our community,” Councilor Holly Edwards said during the council’s meeting Monday.

Upping Charlottesville’s affordable housing percentage from 10 percent — the current amount, according to an affordable housing report completed by the city’s Housing Advisory Committee — 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, the report states.

Now, take a look at what I wrote on December 23, 2004, but replace references to "Arlington" and "County Board" with "Charlottesville" and "City Council," and fast-forward dates from 1997 and 2047 to 2010 and 2060. (Just thinking of those upper-digit years sends shivers up one's spine.)

Moreover, Arlington suffers many of the same problems that communities across the United States do. Housing policy expert William Tucker explained in Reason magazine 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.

Most low-income housing in Arlington was once owned or rented by middle- and upper-middle income residents. Colonial Village and Buckingham, for instance, were built almost 60 years ago to house well-paid New Deal bureaucrats who came to Washington from around the country and needed a place to live.

Over the past six decades, that housing has deteriorated and lost its value for upper-income people. It has therefore become available to lower-income groups. This scenario has been played out across the country. In cities like Philadelphia, Cleveland, Milwaukee, and Richmond, houses that were once mansions owned by rich people have been subdivided into apartments for low- income tenants.

County Board Member Eisenberg 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 1997 will look like in 50 years? They will decay so rapidly that by 2047, they will be -- as one homeowners' advocate so aptly put it -- "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.

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.

Little has changed in the past five (or even 13) years that would make me amend what I wrote back then, except to state it more baldly:  "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 transfer payment 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.

Even though Charlottesville is a small city and Arlington is about five times as large (and is an urban entity overlaid with -- or masquerading as -- a county-government structure), the problems and solutions remain the same.  The economic realities of the housing market apply across the board, whether we are talking about large cities or rural areas, suburbs or exurbs, Manhattan (Kansas) or Manhattan (Big Apple).

Mayor Dave Norris and his fellow council members are well-intentioned.  It is good to make home ownership available to as many people as possible, 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, and other areas beyond the our metropolitan area are affected, as well.




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Why No AAA for Homeowners?

About a week ago, I found myself in the ridiculously embarrassing predicament of locking my keys in my car -- not once, but on two successive days.

Consequently, for only the second and third times since I had become a member of the American Automobile Association, I called AAA for "roadside assistance" (although my car on both occasions was snugly in my driveway). AAA responded by dispatching Lethal Wrecker -- within an hour the first time, and within 100 minutes the second time. There was no charge for the unlocking of my car, as it is one of the benefits included in my AAA membership fee. The second time also required a battery jump, and that was also provided at no charge.

Yesterday I faced a plumbing emergency: A leak sprung from my hot water heater. (I won't go into the details of how it happened, but it turned into the most expensive "free" lawn-mowing my yard has ever had.)

With water flowing from the hole, I found that I could not turn off the spigot above the heater. Attempts to plug the hole with wine corks turned into comedy, as the water pressure increased and the corks flew 10 feet across my crawl space, with a spurt of water as if Moses tapped the rock with his staff.

I turned to the on-line Yellow Pages for help. I called up four plumbers -- this being about 7:00 p.m. on a Saturday -- and received four very different responses.

One, Virginia Plumbing, did not return my call at all. W. E. Brown called back and, without even surveying the situation, told me point-blank that I would need to buy a new water heater at a cost of $900 to $1,300. (I chose to pay my mortgage instead, and searched on.) Roto-Rooter said they could be here in three hours, and the basic fee would be $200, not including parts or labor.

My savior came in the form of AGS Services of Charlottesville. The plumber who returned my call said he could be at my house in 20 minutes, and the basic fee would be $75. (I called to cancel Roto-Rooter, who helpfully said if the other plumber doesn't turn up, he could still be there in three hours. Thanks, but no thanks.)

In the meantime, I called the City of Charlottesville to have the water turned off. To my surprise, the utilities office answered the phone immediately and a truck arrived within about 15 minutes to do the job.

As it turned out, the AGS Services plumber called back and said he did not have the necessary part for the repair in his truck, but he could pick it up first thing in the morning at Lowe's and be at my place between 9 and 11:00 a.m. I told him that was perfectly acceptable, and he did as he said, finishing the job within about 20 minutes after his arrival.

Last evening, during the calm behind the storm, I sat with my friends, David Brown and Richard Morrison, eating pizza and talking about the day's events.

"Why isn't there a Triple-A for homeowners?," I asked. In more than 6-1/2 years of owning and living in my house, this was the first time I had had to call a plumber. With no experience or knowledge of the market, I had to turn to the Yellow Pages and essentially pick out plumbers at random. I had no time to vet them or learn about their prices and reliability or their quality of workmanship.

David and Richard nodded in agreement with me. Wouldn't it make sense, we mused, for there to be a homeowners' version of AAA? With a large number of members, discounts could be arranged with contractors of all sorts -- plumbers, electricians, glaziers (for that baseball that crashes through a window), tree surgeons, pest exterminators -- who might be needed in an emergency.

This homeowners cooperative -- call it HAG: Homeowners Assistance Group -- could choose the contractors through a thorough vetting process, so that I (and other members) know that whomever is sent to deal with an emergency is trustworthy and economical.

Our conversation moved on to other topics, but the question stayed with me, which is why I am writing about it here.

If there is a homeowners' equivalent of the American Automobile Association, I would like to know. Is there? If there is, I'd like to join.

In the meantime, I would like to thank AGS Services for their prompt, courteous, high-quality, and budget-friendly service.