Gentry from the block

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D.A. Ridgely
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Re: Gentry from the block

Post by D.A. Ridgely » 06 May 2018, 20:55

Jadagul wrote:
06 May 2018, 18:03
Houston's no-zoning is somewhat exaggerated; it does have things like parking minima and building setback requirements. It would be very illegal to build Manhattan-style there.

But Houston is also a weird comparison because land isn't as scarce there as it is in much of the coast, and also it just isn't as pricey there. The thing I think we mostly agree on is that building skyscrapers when land and housing are cheap and abundant is usually silly.

DAR: In most of DC, there are local zoning restrictions that are actually substantially tighter than the federal city-wide limit.
But not having to do with building height, per se. That's to say that anyone wanting to build high-rise condominiums along Foxhall Road or Capitol Hill will never get permits and zoning waivers while putting up the same building anywhere in Anacostia will be a comparative snap.

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Re: Gentry from the block

Post by nicole » 21 Jun 2018, 16:27

New proposal here in Chicago from Rahm:
The mayor wants to create the Chicago Opportunity Investment Fund, which would provide low-interest loans to developers who buy multifamily buildings in high-cost neighborhoods. Those loans will come with a caveat: 20 percent of the apartments must be priced affordably for at least 15 years.
https://www.wbez.org/shows/wbez-news/ch ... 2d50f7608e
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JasonL
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Re: Gentry from the block

Post by JasonL » 21 Jun 2018, 16:49

My sister could have written that proposal.

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Re: Gentry from the block

Post by JD » 21 Jun 2018, 17:41

nicole wrote:
21 Jun 2018, 16:27
New proposal here in Chicago from Rahm:
The mayor wants to create the Chicago Opportunity Investment Fund, which would provide low-interest loans to developers who buy multifamily buildings in high-cost neighborhoods. Those loans will come with a caveat: 20 percent of the apartments must be priced affordably for at least 15 years.
https://www.wbez.org/shows/wbez-news/ch ... 2d50f7608e
Oddly enough, there was an article I saw the other day that essentially blamed New York's version of this policy for New York's shortage of affordable housing. I couldn't quite understand the reasoning, though.
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Re: Gentry from the block

Post by Jennifer » 21 Jun 2018, 19:34

JD wrote:
21 Jun 2018, 17:41
nicole wrote:
21 Jun 2018, 16:27
New proposal here in Chicago from Rahm:
The mayor wants to create the Chicago Opportunity Investment Fund, which would provide low-interest loans to developers who buy multifamily buildings in high-cost neighborhoods. Those loans will come with a caveat: 20 percent of the apartments must be priced affordably for at least 15 years.
https://www.wbez.org/shows/wbez-news/ch ... 2d50f7608e
Oddly enough, there was an article I saw the other day that essentially blamed New York's version of this policy for New York's shortage of affordable housing. I couldn't quite understand the reasoning, though.
I haven't read that exact article, but have seen the argument made before--basically, that in the already super-high-price cities, there's already an abundance of rich-person housing, whereas affordable housing is in shortage; building new housing wherein four out of five units are only affordable to the rich does not solve the problem of a city where there's already too much housing out of reach of ordinary people.
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Re: Gentry from the block

Post by nicole » 21 Jun 2018, 20:25

Well, part of the point of this is that it’s specifically not about new or rehabbed development. New and rehabbed development of 10 units or more already requires 10% of units to be affordable, or for the developer to rehab an equivalent number of affordable units within 2 miles, or for the developer to pay a fee into an affordable housing fund in lieu of creating new affordable units. The new loans would be just for purchase (and not rehab) of existing multifamily units.
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Re: Gentry from the block

Post by tr0g » 22 Jun 2018, 09:24

nicole wrote:
21 Jun 2018, 20:25
Well, part of the point of this is that it’s specifically not about new or rehabbed development. New and rehabbed development of 10 units or more already requires 10% of units to be affordable, or for the developer to rehab an equivalent number of affordable units within 2 miles, or for the developer to pay a fee into an affordable housing fund in lieu of creating new affordable units. The new loans would be just for purchase (and not rehab) of existing multifamily units.
I would be mildly curious as to how many developers just say screw it and pay the fee vs. how many actually build/rehab the affordable housing.
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 10:24

tr0g wrote:
22 Jun 2018, 09:24
nicole wrote:
21 Jun 2018, 20:25
Well, part of the point of this is that it’s specifically not about new or rehabbed development. New and rehabbed development of 10 units or more already requires 10% of units to be affordable, or for the developer to rehab an equivalent number of affordable units within 2 miles, or for the developer to pay a fee into an affordable housing fund in lieu of creating new affordable units. The new loans would be just for purchase (and not rehab) of existing multifamily units.
I would be mildly curious as to how many developers just say screw it and pay the fee vs. how many actually build/rehab the affordable housing.
I believe it is more popular to pay the fee. At least, it is popular enough that people are complaining about it now being a "loophole." But I do hear about lots of development with X affordable units as well. Those developments may be further pushed toward that because they're looking for zoning variances.
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Re: Gentry from the block

Post by JasonL » 22 Jun 2018, 10:50

Not being a city guy, I really don't understand how you can ensure affordability when the fundamental value of the undeveloped square footage is way north of affordable. Is it just rent controlled forever?

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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 11:10

JasonL wrote:
22 Jun 2018, 10:50
Not being a city guy, I really don't understand how you can ensure affordability when the fundamental value of the undeveloped square footage is way north of affordable. Is it just rent controlled forever?
That, and restrictive covenants on mortgages for properties that were for sale. Technically it's not rent control though. It's controls on who can rent -- income ceilings. But those are paired with a table that says what the rents can be.
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 11:50

Additional Tribune reporting on this from today:
Most of the units that are being produced are too small for families who find themselves priced out. Housing advocates said that when rents go up and families go looking for a new home in their neighborhoods, they are having difficulty and are facing the possibility of having to move to a more distant, and sometimes more dangerous, neighborhood.

“The way it reads to me is, excellent, you’ve created affordable housing for entry-level Amazon workers,” said Leah Levinger, executive director of the Chicago Housing Initiative.

In the 1st Ward, which includes parts of the surging Milwaukee Avenue corridor, no apartments were created from the fees paid by developers since the start of 2016, city records show. In the 27th, which includes the West Loop — where the developers of two major projects paid fees to the city instead of building many affordable units last year — only three have been created beyond one building with single-room apartments.

In both of those wards, aldermen said they have pushed developers to build at least the minimum amount of required residences inside the buildings they want to put up, knowing that any fees they pay to the city will most likely wind up elsewhere.

“That money will never come back to my ward,” said Ald. Proco “Joe” Moreno, 1st.
...
In many cases, under the 2015 Affordable Requirements Ordinance, known as the ARO, developers putting up larger buildings were required to make 10 percent of the units affordable. Those developing in high-income areas and downtown could build one-quarter of those affordable residences either in their new buildings or within 2 miles of them, and they were permitted to make payments to opt out of constructing the other 75 percent of the units they were responsible for.

The Tribune analysis of city data from 2016, 2017 and the first quarter of this year — the latest available — shows that many developers still have chosen to build a minimum number of units in their buildings, and pay fees for the rest. In 2017 alone at least a dozen developers paid fees to avoid building more affordable units in or near their larger projects.

Those fees are paid into two funds, which the Tribune found are developing housing primarily away from the targeted gentrifying zones and instead in struggling areas including the South Side.
http://www.chicagotribune.com/news/ct-m ... story.html
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Re: Gentry from the block

Post by Warren » 22 Jun 2018, 12:27

What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 12:33

Warren wrote:
22 Jun 2018, 12:27
What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
Well, the new units are typically on the site of old units. They're not building new apartments on empty lots, for the most part.
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Re: Gentry from the block

Post by Painboy » 22 Jun 2018, 12:33

nicole wrote:
22 Jun 2018, 11:50
Additional Tribune reporting on this from today:
Most of the units that are being produced are too small for families who find themselves priced out. Housing advocates said that when rents go up and families go looking for a new home in their neighborhoods, they are having difficulty and are facing the possibility of having to move to a more distant, and sometimes more dangerous, neighborhood.

“The way it reads to me is, excellent, you’ve created affordable housing for entry-level Amazon workers,” said Leah Levinger, executive director of the Chicago Housing Initiative.

In the 1st Ward, which includes parts of the surging Milwaukee Avenue corridor, no apartments were created from the fees paid by developers since the start of 2016, city records show. In the 27th, which includes the West Loop — where the developers of two major projects paid fees to the city instead of building many affordable units last year — only three have been created beyond one building with single-room apartments.

In both of those wards, aldermen said they have pushed developers to build at least the minimum amount of required residences inside the buildings they want to put up, knowing that any fees they pay to the city will most likely wind up elsewhere.

“That money will never come back to my ward,” said Ald. Proco “Joe” Moreno, 1st.
...
In many cases, under the 2015 Affordable Requirements Ordinance, known as the ARO, developers putting up larger buildings were required to make 10 percent of the units affordable. Those developing in high-income areas and downtown could build one-quarter of those affordable residences either in their new buildings or within 2 miles of them, and they were permitted to make payments to opt out of constructing the other 75 percent of the units they were responsible for.

The Tribune analysis of city data from 2016, 2017 and the first quarter of this year — the latest available — shows that many developers still have chosen to build a minimum number of units in their buildings, and pay fees for the rest. In 2017 alone at least a dozen developers paid fees to avoid building more affordable units in or near their larger projects.

Those fees are paid into two funds, which the Tribune found are developing housing primarily away from the targeted gentrifying zones and instead in struggling areas including the South Side.
http://www.chicagotribune.com/news/ct-m ... story.html
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Re: Gentry from the block

Post by Warren » 22 Jun 2018, 12:50

nicole wrote:
22 Jun 2018, 12:33
Warren wrote:
22 Jun 2018, 12:27
What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
Well, the new units are typically on the site of old units. They're not building new apartments on empty lots, for the most part.
Of course, but the old units are already gone. Whoever was living there has already been forced out. I don't understand why there needs to be "affordable" housing in all neighborhoods.
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Re: Gentry from the block

Post by Aresen » 22 Jun 2018, 12:58

Warren wrote:
22 Jun 2018, 12:50
nicole wrote:
22 Jun 2018, 12:33
Warren wrote:
22 Jun 2018, 12:27
What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
Well, the new units are typically on the site of old units. They're not building new apartments on empty lots, for the most part.
Of course, but the old units are already gone. Whoever was living there has already been forced out. I don't understand why there needs to be "affordable" housing in all neighborhoods.
This. It seems to me that attempting 'social engineering' when it comes to housing just makes ALL housing more expensive.
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 13:12

Warren wrote:
22 Jun 2018, 12:50
nicole wrote:
22 Jun 2018, 12:33
Warren wrote:
22 Jun 2018, 12:27
What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
Well, the new units are typically on the site of old units. They're not building new apartments on empty lots, for the most part.
Of course, but the old units are already gone. Whoever was living there has already been forced out. I don't understand why there needs to be "affordable" housing in all neighborhoods.
Yes, that's right. The neighborhood thing is a big thing. People don't want to have to leave their neighborhoods. It's an absurd idea that "working families" should be able to live in any neighborhood. Do I get to live in the Gold Coast just because I want to? No.
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Re: Gentry from the block

Post by Warren » 22 Jun 2018, 13:16

nicole wrote:
22 Jun 2018, 13:12
Warren wrote:
22 Jun 2018, 12:50
nicole wrote:
22 Jun 2018, 12:33
Warren wrote:
22 Jun 2018, 12:27
What is the thinking here anyway? I thought the horrors of gentrification was that people would be forced out of their homes that they've lived in for years. But these are new units so...? The problem is rich people will be able to get to their car without having to trip over a few working poor and thus confront the failings of society?
Well, the new units are typically on the site of old units. They're not building new apartments on empty lots, for the most part.
Of course, but the old units are already gone. Whoever was living there has already been forced out. I don't understand why there needs to be "affordable" housing in all neighborhoods.
Yes, that's right. The neighborhood thing is a big thing. People don't want to have to leave their neighborhoods. It's an absurd idea that "working families" should be able to live in any neighborhood. Do I get to live in the Gold Coast just because I want to? No.
Ah. So it's "The world should never change and the neighborhood I grew up in should remain the same with the corner store and Saturday matinee cinema just like it was when I was a scamp roaming these streets". I have no patience for that. How does something that nonsensical become policy?
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 13:52

Activists?
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Re: Gentry from the block

Post by Jake » 22 Jun 2018, 14:10

Warren wrote:
22 Jun 2018, 13:16
Ah. So it's "The world should never change and the neighborhood I grew up in should remain the same with the corner store and Saturday matinee cinema just like it was when I was a scamp roaming these streets". I have no patience for that. How does something that nonsensical become policy?
Because that's not how it's being presented to policymakers. (I'm going to speak with some authority on this, because we're dealing with this very issue hereabouts, and I'm one of the policymakers in question.) It's all about "there's an affordable housing crisis!" and "what are you going to do to address the crisis?"

Some background: my state (Oregon) is a major "destination" state right now. It's filling up like California did, so property values are climbing. We also have relatively restrictive building codes, and a shortage of people in the trades (electricians, carpenters, plumbers, etc.). This means we've got increased demand chasing after a relatively stable supply, so prices, naturally, go up.

Those who own their own homes are seeing their property values increase, and their property taxes aren't going up hardly at all, because some ham-handed citizen initiatives from back in the '90s made our property tax system weird and stupid... but also strictly limited increases to "official" property values for tax purposes. So people who own homes are generally okay with this.

People who rent, however, are seeing their monthly rent increase, as that flood of newcomers means that there are far more applicants for any given vacancy, so whenever a lease term ends, there is of course a rent adjustment upwards. This means that people already in the "I can only afford cheap rent" bracket are getting priced out, as the "cheap rent" is now several hundred dollars a month more than it was five years ago.

If people were rational, they'd take that as an economic signal to move somewhere else... somewhere that isn't becoming California II. But instead, they want their local/state government to repeal the laws of economics and magically change supply and demand to make the rents cheaper.

So what we should be doing, IMO, is to reduce those restrictive building codes, stop trying to shunt everyone into a four-year degree program, and allow building to happen... but in the meanwhile, people in rental properties are going to have to look elsewhere. There isn't a magic bullet for this stuff. Unfortunately, many of my fellow policymakers (we are, remember, elected based on how well we do campaigns, not how well we understand econ) think, "There aren't enough cheap homes? Well, we need to incentivize people to build more cheap homes!" or "We need to force people to rent out more expensive homes at cheap prices!"

So we get shitty and stupid and counterproductive policies, because most folks never learned how to look beyond immediate, first-order effects.
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Re: Gentry from the block

Post by Warren » 22 Jun 2018, 14:16

Jake wrote:
22 Jun 2018, 14:10
It's all about "there's an affordable housing crisis!" and "what are you going to do to address the crisis?"
Yeah, that part of it I can follow. It was specifically the "You must have so many low income families living in the basement of your luxury high rise" that was confusing me.
I suspect that the people you're dealing with want projects.
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Re: Gentry from the block

Post by Jake » 22 Jun 2018, 15:30

The low-income families in the luxury high rise thing is just another stab at the "we need people to rent out more expensive homes at cheap prices" side.

The plan goes like this:

Step 1: Make it impossible (or nigh-impossible) to build a luxury high rise without some percentage of low income units.
Step 2: Affordable housing for all!

It's a plan that's simple, straightforward, and almost certainly won't work... except in the same way that the broken window fallacy "works". I know I don't have to explain the problems with rent control to any Grylliader, and this plan has many of the same failings. It also adds a new failing, which is that by making some percentage of the rents artificially low, it makes it harder for the developer to make back their money on the project, which means that some percentage of projects never get built in the first place, thus exacerbating the overall housing shortage. But all of us politicians get to point to one of the few projects that actually appear and say, "See, we're helping!" and nobody can point to all of the other projects that didn't get built to counter our claims... because there's nothing to point to.
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Re: Gentry from the block

Post by Jennifer » 22 Jun 2018, 16:46

As I mentioned upthread, I have read many arguments from people who agree "the rent is too damned high" but also oppose such measures as "set aside a percentage of new housing for the poor." Most of those arguments are on places such as Metafilter comment threads (the most bleeding-heart lefty member of the Gryll would be far on the right-wing spectrum there). I think much of their opposition comes from the mistaken belief that current affordability issues (and yes, I do agree with the Mefites that in far too many American cities "the rent is too damned high," it's just that I completely disagree with their proposed solutions to solve the problem) are NOT an example of "what happens when there's no free market," but "what happens when the free market is thwarted."
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Re: Gentry from the block

Post by nicole » 22 Jun 2018, 17:27

Another thing that’s happening here, and there’s some about this in the Trib article I posted earlier, is that not only are developers focusing on (quasi-)luxury units, they’re also focusing heavily on studio and one-bedroom units. Around the corner from me, a large three-story building was converted from 3- to 4-bedroom units to 1-bedrooms. It’s hard to imagine they’re not going overboard on housing stock for young people vs. families, but who knows.
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Re: Gentry from the block

Post by Highway » 22 Jun 2018, 18:10

Developers aren't idiots. If they're converting the things, then they're pretty sure there's a market for them. They see the prices things go for. They know what price they're probably going to get for all of their units. And they'll probably get it.
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