Eleven Years Into the Ten Year Plan, Affordable Housing Crisis Persists

February 21, 2015 Asheville , City - County Gov. , Columnists , News Stories 3052 Views
Eleven Years Into the Ten Year Plan, Affordable Housing Crisis Persists

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Affordable Housing –

The minutes from the Asheville City Council evoked that image. Each member of council was given a chance to share their priorities and goals for the next fiscal year. Gordon Smith is an advocate for the poor. During recent council meetings, his modus operandi has been to rattle off statistics, ask developers to provide more units at rents subsidized in perpetuity, and then vote against projects when developers refuse.

Reasons developers give include the need to realize a profit. If they are seeking conventional financing, as opposed to a government subsidy, they need to convince the bank that they can repay their loans. In 2010, the city adopted a Land Use Incentive Grant, which would award developers breaks on taxes and/or fees and permitting should they score a number of points for incorporating Smart Growth features into their projects. The city had had a few inquiries, but nobody bit. What the city was offering in exchange for New Urbanist trappings could only leave developers in the hole.

At a recent meeting of the Housing and Community Development Committee, developer Harry Pilos suggested council get some grad students to do some mathematical modeling to consider such things as land costs, costs per square foot, capitalization rates, and costs of financing in developing city policies. He added the cost of building in Asheville was 30 percent higher in Asheville than elsewhere in the state.

On a recent broadcast, WWNC 570 AM’s drive-time host Pete Kaliner spoke with former Asheville developer Mike Summey. Summey said he and other developers refuse to build in Asheville anymore because the design review process was, in not so many words, hapless. Even two decades ago, Asheville had a bad reputation for making up the rules as designs went through the approval process. They would stay within the rules only to be told their expensive plans did not harmonize with the next board’s sense of aesthetics. And once building got underway, each successive inspector had different ideas about what needed to be ripped out and moved.

Then, council became extremely progressive. After a group of bright architects fresh out of college with ideas to change the world planned all the latest ideas into a development for the Thoms Estate, council, just a little behind the curve in environmentally-sensitive design, demanded so many changes, the firm could no longer afford to build the houses, but sold the lots as “envelopes.” It was suggested at a council meeting that the Hendersonville Road Walmart include stairs in its parking lot for pedestrians. The developers objected. A typical customer could be a mom pushing buggy full of groceries with a baby in it. Council even demanded a podiatrist’s office include parking for a certain number of bikes.

After investing 30 percent more than is necessary on scrapped plans, greenwash, and whimsy; there is little left in developer’s notoriously deep pockets for offering units below market rates. If the bank’s lending policies and the developer’s personal bank account can’t foot the bill, it could be paid by foregoing maintenance and improvements or, more likely, jacking up the rent for the developer’s other apartments. When the middle is eliminated by making some rents too high and others too low, the result is, on a small scale, what progressives refer to as gentrification. And the city just commissioned a study to analyze gentrification. Entitled “Alternatives to Gentrification in the East of the Riverway,” its recommendations included inclusionary zoning, Tax Increment Financing (TIFs), and a community-controlled, tax-funded land management brokerage.

Inclusionary zoning is just a fancy way of saying the city will require a percentage of all new residential development to be affordable to low- and moderate-income households. In Asheville, low-income housing might coincide with definitions of affordable housing, with annual rents not in excess of one-third of the wages of households earning at most 80 percent of Area Median Income. Moderate-income would then correspond to workforce housing, with rents below one-third of the wages of a household earning between 80 and 120 percent of AMI. The official AMI for Buncombe County is currently $56,000.

Problems inherent in inclusionary zoning are similar to those for any market distortion. When people have to pay more than they want or can afford for a commodity, they will settle for other products, buy from a more reasonable seller, exit the field, or perhaps come up with some form of evasion not considered by the planners. Old rent control policies, like those that still afford the rich and famous dirt-cheap rent in NYC, have supposedly been fixed. Although there are books on the subject, one of the most compelling arguments against rent control is the volatilities associated with the bursting of the housing bubble. Should a landlord be required to rent for free amidst massive layoffs? Even if government pays the subsidies, its money comes from taxpayers, some of whom will be unable to pay both the marginal tax increase that pays the subsidies and rent within the city limits.

TIFs are tax breaks on future development. They assume the new project and those involved with it add no burden to city services for the term of the agreement. What’s more, they are speculation that has been described as “socializing the risk and privatizing the gain.” If a project is so ineligible for conventional lending it must seek financing from government, it is already high-risk.

Another idea Smith and the HCD are exploring is land banking. If adopted, the city would buy up lands in the name of blight and broker them to make sure they are used for affordable housing. It may be the city would partner with a nonprofit community land trust for real estate management. Mike Brown, who worked on the gentrification report, was described as “having expertise in the field of community asset creation and sustainability.” Quoting the minutes of an HCD meeting, “Mr. Brown offered community land trusts as a common strategy, which ensures that the community can control the future use and distribution of land/housing.”

The practice assumes the city or its assigns will be so expert in real estate, they are justified in undercutting for-profit realtors- even though the city has a track record of trying to force high-quality, low-rent apartments onto prime real estate. At a recent council meeting, Lou Bissette argued infill lots are often vacant because they have quirks that make them harder and more expensive to develop. Nothing was said about what would be done to make neighbors more accepting of the new kids on the block who, abiding by Smart Growth principles, block viewsheds, add traffic, and bring down property values.

Other ways of fighting the affordable housing crisis batted about included employer-sponsored housing, adding another $100,000 to the city’s Affordable Housing Trust Fund, and pushing more for a living wage. A couple ideas Smith advocated, allowing tiny homes and accessory workspaces, would actually work without raising prices elsewhere.

Food Policy –

Smith is also responsible for setting up the Asheville Buncombe Food Policy Council and the City of Asheville Food Action Plan. The United Nations used to take credit for originating the concept, which is now closely affiliated with global warming. Wikipedia describes it as, “the area of public policy concerning how food is produced, processed, distributed, and purchased;” and that is essentially the definition of socialism narrowed down to only the most essential of goods.

Name-calling aside, our sleeve is on fire. Phrases like “poor,” “hungry,” and even “food insecure” are out. The new phrase is “food hardship,” and one in five citizens in the Asheville Metropolitan Statistical Area is in it. Food hardship is defined as answering yes to the question, “Have there been times in the past twelve months when you did not have enough money to buy food that you or your family needed?” The 20 percent is on top of the national average of 20 percent of families nationwide being on food stamps, and kids in public schools getting two meals a day, five days a week from the federal government. Asheville is making the top ten on lists that gauge hunger in America. It is a creepy thought. Citizens of what used to be the wealthiest nation on earth can no longer handle the most basic element of subsistence without government.

On the bright side, the Food Policy Council has in many ways taken a libertarian approach to making food available. One of their action items is to “. . . amend the UDO as needed to remove barriers to local food production and distribution.” Other items call for deregulation to let people farm the land and do so commercially. More questionable action items speak of using the city’s resources and powers to promote growing what the city deems to be healthy foods, designing metrics for achieving food policy goals, and, of course, education and outreach.

Basic City Services –

Chris Pelly was not out of line. He wanted council to focus on basic city services. In particular, he wanted more money spent addressing the city’s backlog of sidewalk projects. He also wanted something done about leaf pickup. Citizens argue it is too infrequent while the DPW doesn’t think it’s worth the investment to appease them on this count. Pelly suggested contracting out for the service. Several years ago, the city looked into privatizing public works, and nobody would come to the table because they couldn’t even come close to the city’s level of efficiency.

Partnership

Mayor Esther Manheimer’s priorities and goals were recorded as abstractions, the most notable of which was “partnerships.” To explain the practice, it would be helpful to recall a lesson from secondary-school sociology: The amount worldly power is constant. It starts with the individual and is surrendered to government. That is, a person may be born with the power to talk, go to the house of worship he chooses, and tote a gun. If he decides it is better for his leaders to decide which is the correct church, if and when he can have a gun, and what he is free to express – he has given government those powers.

Socialism used to be a very ugly word in America because, by definition, it meant the private sector was turning economic power over to government. Rather than letting the farmer change his mind to become a blacksmith and trying his hand at an outrageous newfangled form of horseshoe, government would say what kinds of horseshoes should be made, how many, and by whom. When people with passion and skin in the game turn over decision-making control for their industry to centralized and less-informed bureaucrats, the result is stories like the chandeliers Nikita Khruschev complained were “pulling the ceilings down on our heads.” The manufacturers had to meet quotas for sales by weight of a product people weren’t buying.

Back to partnerships, that is the modern parlance for transferring more power from the private sector to government. Government has now taxed the people to the verge of revolt, as evidenced by the TEA (Taxed Enough Already) Party. So, it proposes working with existing businesses to further its work. As leaders branch into untraditional roles of government, like creating jobs, providing food and shelter, and being the masters of architectural design; there is no money left for police and fire protection and infrastructure. But government may continue its castles-on-clouds expansion so long as it can stand on the grounded shoulders of local businesses and other governments to provide services the general public agrees are necessary.

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