Monday, July 22, 2013

Why concentrate 'affordable' and subsidized housing in poor communities?

Originally posted on July 18th. I am going to keep reposting this because I think the dialogue is so important. If you can, please comment. Your voice needs to be heard -- regardless of your stance on the issue. -- The Advoc8te

I'm serious. I really am asking.

Not that I don't think 'affordable' housing (I put "affordable" in quotes because its relative) or subsidized housing is important but why should the focus be here in Ward 8 where we are so low on the economic spectrum? I suppose I don't see the logic in concentrating Section 8 housing in a ward where unemployment hovers around 25%, there is only one chain grocery store for 73,000 residents, and where public transportation is "spotty" at best. I'm not even going to address the issue of crime and education in Ward 8. The issues related just to jobs, food, and transporation are major challenges to a family already living on the edge.

Wouldn't it make more sense to designate more subsidized and "affordable" housing (whatever that means) in more affluent and retail rich neighborhoods where program participants would have more opportunities to graduate out of these programs? Wouldn't it make more sense to designate housing for 'lower income' residents in places where there are less than average lower income housing options? Places where people really are being priced out systematically across the board? Call me crazy but it seems to me there is a greater need for "affordable" housing in Georgetown than in Anacostia, the latter just got its second sit-down restaurant today!

In my immediate Congress Heights neighborhood the highest rents advertised are those being paid by Section 8 vouchers -- that pretty much dictates the market rate rentals surrounding where I live. And as the once thriving condominiums of 2007/2008 fail, their units are reverting back to public housing complexes one Section 8 renter at a time. If there is ever a problem that is one that should be addressed quick, fast, and in a hurry it is that. We have renters, turning into homeowners, turning into bankrupt renters (if they are so lucky). I have posted examples on this blog before of two-bedroom condos in Ward 8 that were first sold in 2008 for nearly $200,000 and now sit on the market for a paltry $35,000. If a $35,000 two bedroom condo is not 'affordable' I don't know what is. The mortgage on that condo (less than $200/month) would be less than the condo fees.

If I recall correctly, Councilmember Marion Barry once said that only 24% of Ward 8 residents are homeowners. Let me repeat, only 1 in 4 Ward 8 residents own their home! If those stats are true, it would seem to me we don't have so much an affordable housing problem as a homeownership problem. Rentals are by their definition temporary, that is their blessing and their curse. You can live in an apartment for 10, 20, or even 30 years but if you are renting you are not guaranteed that apartment for life, you are at the mercy of the landlord and he would totally be within his rights to raise the rent (although thanks to current tenant laws not so quickly).  The benefits of being a renter is that you can also move when you want, and you typically aren't responsible for maintaining the property beyond normal wear and tear. It's a trade off and part of that trade off is that you don't have a financial stake in your home beyond the landlord/tenant laws. I have yet to see a rental apartment be bequeathed in a will and no matter how you do your taxes I am pretty sure rent payments are not tax-deductible. There are reasons people want to graduate from being a renter to being a homeowner, namely the ability to build equity.

If we want to avoid the rapid, systematic, forced financial displacement of existing residents who want to stay in their current neighborhoods (what some people call 'gentrification') then we must empower and prepare renters into becoming homeowners! The answer is not to make more cheap housing, faster and then cluster that housing together. That is not how you build thriving communities, that is how you create generational poverty.

I think one of the reasons why I despise 'gentrification' discussions (and as a general rule refuse invitations to comment on the subject) is because I feel those discussion are pretty typical and pretty pointless. That's right I said it, I think talking about 'gentrification' is a complete and total waste of my time. The power is in action -- our action --  and not words.




When I was growing up by father used to say me all the time (and I mean all the time), "you are a woman and you are black, you are going to have to work twice as hard to get half as far in this world." I know for a fact many of my friend's parents told them the same exact thing.

My dad didn't say that to hurt me. He said that to help me. He wanted me to know the world into which I would be going out into and he wanted me to be prepared to kick it in the teeth with my awesome. The fact that the deck was stacked against me wasn't nice, it wasn't fair, hell, it wasn't even legal but that was the world into which I (his first-born) was going to have to live. And because of that I always worked twice if not three or four times as hard as everyone else because I knew that I would have to work against a lot of preconceived notations and I was competing against a lot of people with advantages I didn't have.  My dad knew I wasn't going to be able to change what those people thought or what those people did so he wanted me to be in the position where I had some options. He wanted me, his first-born daughter, to be prepared. My mother was the same way. She told me (and showed me by example) that the only way I was ever going to be able to climb out of poverty was by getting a good education. Going to school and getting good grades wasn't something I was supposed to do, it wasn't a way to pass the time,  it was something I was going to have to do if I wanted some good options. If I wanted to be able to call the shots I was going to have to get a good job. If I wanted to be able to tell someone, "don't let the door hit ya where the good Lord split ya!" I was going to have to own my home.

You can rail, rally, and scream about it all day but you are never going to stop people from buying homes where they want to live and where they can afford. The old saying may be, "never say never" but I am going to say it here.  It is NEVER going to happen, period. DC is never going to pass a law that says that Sally can't buy a house in Ward 8. DC is never going to pass a law that says Tom can't sell Sally that house in Ward 8.  And nothing is going to stop Tom from taking the proceeds from that Ward 8 sale and buying a condo in Ward 3.

What we can (and should be doing) is encouraging and empowering Tom's neighbor Bill to be in a place economically where he can own his home too -- assuming that is what Tom wants to do. If Tom owns his home Tom can be in a much stronger position to stay in his current neighborhood (if that is what he wants). Tom also has the option to take advantage of rising home values and sell that home and move someplace else. By owning his own home Tom now has options.

Don't let this post fool you. I believe in Black people, I believe in poor people, and I  definitely believe in poor Black people being one myself. I believe we have the skill, the desire, and the determination to rise to any challenge if we want it bad enough. We are The Dream. We don't have to lower the bar ---  even if we may have to work up to it.  There is nothing wrong with needing a hand up, as long as the other hand isn't either pushing us down or encouraging us to lie down all together.

At some point we must (and should) stand on our own two feet. They literally take us where we want to go.

I know their hearts may be in the right place but some well-intentioned people/nonprofits/government agencies/media treat poor people like they are eternal children.  I don't like that.  I really want those in a position of power and access to stop fooling poor people into thinking they are incapable of taking care of themselves and therefore they shouldn't even try. I want the collective 'us' to stop lying to people who are disadvantaged by telling them that they can be renters who are treated like homeowners. It's just not true. I want my neighbors currently living in subsidized housing to be the kings and queens on the economic chess board, not the pawns.

And to my dear Ward 8 neighbors who I love so very much, we need to face some cold hard facts.

We need some financial diversity in Ward 8. Now.

If we want to have a shot at making our communities financially viable and independent, so they can compete in the regional marketplace, we need a strong and diverse economic and political base.  We need lower, middle, and higher income residents to attract and retain small, medium, and large businesses that will provide jobs, job training, and services to the immediate community. Stop falling for the okie doke. The answer is not apartments that cost less, the answer is jobs (and more jobs) that pay more and for that we need the holy grail of all community based holy grails: significant economic development.

We have to move from being victims to being victors. We need to become the heros of our own story and stop waiting for someone else to come in and save the day. There is no magic bullet. We have to make our own magic. In 2006 I realized that I had missed the train on buying in Shaw/LeDroit park where I went to college. I hadn't noticed that the neighborhood was changing, I was too busy getting my drink on in Republic Gardens. I was shopping but not really buying anything of value.  I realized if I wanted to have a financial foundation in my sixties I was going to have to own something in my thirties and it would be smart to own something in a neighborhood that was "on the rise."

What did I do?  I found a full-time job in addition to the full-time job I already had. That's right, I worked TWO full-time jobs at the same time (I worked day and night 6 days a week) for a year to save enough money to pay off my debts, clean up my credit, and then save for a down payment. In the meantime I read every financial literacy book for single women I could get my hands on (I highly recommend, "Girl Get Your Money Right"). In early 2007 I enrolled in a first-time homebuyer class being conducted by MANNA Inc. (a great nonprofit that helps people with affordable housing) and it was through MANNA that I found the condo where I live now. I closed on October 27, 2007. It was a very special day.

I am sure that someone (probably on this post) is going to accuse me of being a big bad 'gentrifier' who hates poor people but let me tell you, the grass isn't always greener on the other side.  I am a homeowner (good), with over $50,000 in student loan debt (bad), credit card debt (very bad) living in a condo that has lost about a third of it's value since I bought it in 2008 (uber bad).  Anyone who is struggling under the burden of 5 or 6 figure student loan debt will tell you that they wish they were just broke.  It's one thing to have no money, it is an entirely different thing to owe piles and piles of it with no way to pay it back. The stripper pole has never looked so good (or so I heard). ;) I am hopeful that one day home prices will rise again so I can sell my condo to earn enough money over my purchase price to give it all to the people at Sallie Mae, to satisfy my student loan debt once and for all.

There are a lot of working poor in Ward 8. Some of us buy our groceries with an EBT card and others with a Visa platinum credit card (until it is maxed out). We are literally in this thing together.

It is for that reason that I think Councilmember Barry was 100% correct that the focus needs to be on turning Ward 8 renters into Ward 8 homeowners. Now I don't necessarily agree the answer is to stop building apartment buildings (I think the opposite is true, we need the density). In order for Ward 8 residents to "be in the game" they have to know the rules. And the #1 rule to building long lasting wealth is to own what you have so you can build on it for today and tomorrow.

So coming full circle, do I think there is a need for "affordable" housing and subsidized housing? Absolutely.  I would just like to see it happen in places were those in the system have a legitimate shot of getting out of the system. They don't call it "poverty pimping" for nothing. The money is in the treatment, not the cure.

I want everyone who wants to,  to evolve from renter to homeowner.  I want everyone to have a job that pays a living wage. I want everyone to not only feel empowered but to be prepared. The only way I can see that happening is if our lower income residents have an opportunity to move up the economic ladder and the only way I can see that happening is through a well-paying job, access to services and amenities, and a quality education -- all within close proximity.  And if we are going to concentrate all of the programs here it would be nice to have some real economic development to go along with it and not just the promise of it. The loss of Walmart at Skyland wouldn't be such a blow if we had other irons in the fire.

Then again, as my father used to say, "you are going to have to work twice as hard to get half as far."

I guess we better get to work.


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10 comments:

StringsAttached said...

"We need some financial diversity in Ward 8. Now."

This post is amazing. Thank you.

That is the name of the game! Financial diversity is only going to help Ward 8! Individuals who are not willing to work towards a better Ward 8 shouldn't hold back those who are. Sadly there are individuals in the community that would prefer it to stay poor so they don't have to work to keep their homes.

Further, kudos to you for working so hard to pay off your debts and buy a home. Your story shows that one can achieve any goal with a plan, determination, and hard work!

Ward 8 is in desperate need of an advocate on the council who will help move Ward 8 past endemic poverty by attracting hard working individuals and businesses.

Anonymous said...

Awesome commentary. This should be in WAPA Local

ARC said...

This was a really wonderfully written post, and gets at the heart of everything that needs to be happening east of the River (and your own efforts are incredibly impressive!).

One note I would make regarding your initial question -- why can't we build affordable/subsidized housing in other markets? -- is that, at the moment, affordable housing is often the only type of housing that a developer can get financing for in Wards 7 and 8. At this point, "market rate" rents in Ward 8 are so close to what's classified as affordable (60% of Area Median Income, which is $104,000 for a family of 4) that a traditional construction loan to do the project wouldn't be feasible, because no bank will underwrite rents that are so considerably lower than more attractive neighborhoods. This leaves the developer with the only choice to look for tax subsidies instead, which will require the project be affordable, with rents capped at 60% AMI. Low Income Housing Tax Credits are often the only way to get a deal done in Wards 7 and 8 at this point. So, it isn't that developers wouldn't WANT to build market rate housing in Ward 8 if they could; it's that, at this time at least, they still can't get the traditional construction loans they would need to make the project viable. If market rate rents were to go up, then a developer could underwrite higher income on the project, thus getting them a better loan to build it, and then you'd start to see the mix of income that Wards 7 and 8 so greatly need.

h st ll said...

Excellent article, but I think you know why the housing choice voucher program (the accurate name for sec 8) recipients are often in W7 &8. The voucher won't cover enough for most WOTR wards. For a 1bd they will pay up $1310. And if you up that limit than you can subsequently help a lot less people with housing subsidies.

See here:
http://www.dchousing.org/docs/payment_standards.pdf

Now, IZ should help with this and new affordable housing is being created whenever these new large buildings WOTR go up. However, that is just getting off its feet...

h st ll said...

Now, that being said - why haven't more of the current housing choice voucher recipients been able to increase their incomes and move to unsubsidized housing? We need to help people get jobs that pay at least a living wage (as you alluded to). What is DC getting for the $130 million we spend a year on job training? Surely not enough...

Carlene said...

@ARC I've never thought from that perspective when it comes to development. Thanks for sharing!

The Advoc8te said...

@ARCH

"One note I would make regarding your initial question -- why can't we build affordable/subsidized housing in other markets? -- is that, at the moment, affordable housing is often the only type of housing that a developer can get financing for in Wards 7 and 8. At this point, "market rate" rents in Ward 8 are so close to what's classified as affordable (60% of Area Median Income, which is $104,000 for a family of 4) that a traditional construction loan to do the project wouldn't be feasible, because no bank will underwrite rents that are so considerably lower than more attractive neighborhoods."

I say again, "there is no business like the poverty pimping business."

Thanks for that information it is spot on with what I am seeing and totally tracks with how we got in this mess.

kayvan farchadi said...

I like the argument and agree for the most part. However, do you feel like your condo was a good investment after what happened to the value? With condo fees and improvements, are you ahead of where you would be if you were just renting? On an individual level, unless a property's value is rising 2-3% a year average, renting appears to be a better financial decision.

Also, in DC you have certain protections from your landlord that you do not have as a homeowner from your bank (the ultimate landlord).

UNLESS, you are renting some part of it out, which I think is the way to go. I purchased a property in Ward 4 about 3 years ago and I know what without rental income, it would not have been a viable investment for me, even with a rise in property value. Esp in DC where houses are so old - so many expensive issues come up (roof, HVAC, electrical, pests, etc.) plus insurance and FHA fees (I assume most people would use first time home buyer program). But, improvements you make to a home to collect rental income are tax deductible as well, which is nice.

Maybe residents could pool money to buy and rent places to other residents and actually be decent landlords, while building equity? I'm sure some ppl are trying to do this.

But all this being said, if units are going for 35K, and a total initial investment of around 9K can get you a $200 monthly payment - that sounds like a sound financial move to me.

Mari said...

I agree with Kayvan renting helps a lot. I rented out the extra bedroom in my house to a slew of different short term renters while I was single. At one point their rent covered my entire mortgage. At one point, then I renovated and with the extra loan it became 1/2 of the mortgage.
A lot of people don't factor that option in when buying, if you have the space and the patience, rent out that space to keep it affordable for you. Several single homeowners on my block have renters (basement & extra rooms)to help cover to mortgage. Living alone or living with a non-paying adult loved one costs money. Renting a room provides 'affordable' housing to someone and makes it more affordable for you. I know it isn't for everybody, but you have to ask can you afford to live alone?

Unknown said...

There is no reason for subsidized rent like Section 8 for able bodied adults. As you have noted it distorts the market. The irony is without Section 8 rents in Ward 7 and 8 would probably decline. Since it's the market standard in the area.

If any government aid is to be provided it would be better to get folks to own a home. A building full of owners no matter the income is far better than renters.

Maybe if folks vote more critically instead of automatically Dem things will change. Probably not though.