Municipal Housing

municipal houseing.PNG

In the previous post I discussed the importance of voting yes for prop 10 in November. This legislation will give more autonomy to cities like Redlands. I also discussed the PHIMBY alternative to YIMBY and NIMBY as a path forward that will help our local housing situation. Since that post, I have heard from residents in Redlands about their thoughts regarding housing. Two things were clear, for those of us who rent, the rent is too high compared to our income and for those looking to grow their families and invest in a home to own, the housing market makes this largely unattainable for even higher wage earners in our neighborhood.

So what can we do? We can start right away by preventing further development of luxury homes. Take for example, a development that is planned for the donut hole of District 1, The Crossings . This development is being built on unincorporated land controlled by the county. While density and mixed retail and residential use are positive things, apartments are at market rate, at around $1500 per month for 1 bedroom yet the median household income in the surrounding area (our district) is $46,211. Of course, it’s even more difficult for a single person to afford rent so it’s no wonder why so many millennials are living with their parents. As you can see from the chart below, the share of more expensive properties has increased rapidly over a 15 year span.

share of properties vs monthly cost

 

Fortunately there is a path forward but it means that we need to reimagine what housing is. Housing is a basic need and should be treated as such. That’s why I’m a proponent of Municipal housing. Unlike older models of public housing in the US, we need to view municipal housing not as a last resort for the poor and the homeless but something that’s desirable for the many. Unlike section 8 housing that uss mean-testing, everyone would be eligible for municipal housing.

How do we pay for this project?

A housing researcher Peter Gowan has done a study on municipal housing (read the full report here for more a more detailed description of the plan) he explains in an article:

How would it work? Municipalities would borrow money, use the money to build housing, and then rent out the resulting units. The money could be borrowed from municipal bond markets or from the federal government at the Treasury rate. Additional funds could be secured through capital grants from the federal government that mirror the outlays of the Low-Income Housing Tax Credit (LIHTC) program. The housing would mostly be built by construction companies, just as public buildings like libraries already are. The management of the building could be done in-house or through contracts with building management companies. Rents would be set high enough to at least cover costs, with some units rented at higher amounts than others based on income. Empty government-owned land should be used first, followed by redevelopment of blighted or abandoned buildings.

If Redlands were to construct housing under this model, not only could we get rent down to an affordable level, but in the long term a municipal housing authority could actually generate dividends that would further reducing rents and could be shared with the city to finance the next generation of municipal housing.

Eric Whedbee