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Archive for the ‘affordable housing’ Category

The Buffalo News’ recent investigations into City Hall’s housing policies raised some very important issues.

How much is too much to subsidize the construction of homes in the city?

Should developers receive these subsidies? Or should homeowners receive these subsidies?

Should private developers be relied upon for the development of these homes or should non-profits?

These are important questions that City Hall should spend more time thinking about as they move forward with projects like Sycamore Village. However these types of questions do not begin to challenge the ideal upon which this kind of housing policy rests: homeownership.

There are obviously many benefits to homeownership and for many people it is probably ideal.

Unfortunately homeownership is not a very affordable option for many people in Buffalo.

Homeownership requires homeowners to have a very steady and relatively high level of income. As the UB Regional Institute’s new report Playing an Insecure Hand: Low-Wage Workers in the New Economy points out, an increasingly large number of people in Buffalo are only finding inconsistent low-wage work. This kind of an income prevents many people from getting past the high upfront costs associated with buying a home. Further, even if one is able to get a mortgage, the costs associated with maintaining a home can be high. Many home owners are thus at risk of falling into foreclosure.

The Buffalo News’ report bears this out:

“Of the 431 subsidized homes that resold among the 1,500 [that have been subsidized by the City], more than half — 231 — were foreclosed upon, with most — 184 — involving the original subsidized owner. These foreclosures basically wiped out the $4 million in publicly funded subsidies the 184 foreclosed owners received.”

Obviously homeownership is a risky proposition at best for many people in the city.

Even renting is unaffordable for most people! According to the US Census Bureau’s American FactFinder, 55.8% of renters in Buffalo spend over 30% of their household income on rent. HUD states that the “generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing”.

Additionally, according to the Homeless Alliance’s statistics, roughly 2000 people cannot even afford rent on any given night and as a result are homeless.

Bearing all this in mind, should homeownership be the main focus of our housing policy?

We believe that it is time for our community to broaden its outlook on the housing situation in Buffalo beyond homeownership and begin to focus housing policy on making housing affordable to all people.

PS: For a great discussion of the development of federal housing policy and issues with its emphasis on homeownership as a guiding principle see Thomas Sugrue’s article Why the New American Real Estate Dream is Renting.

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“Mr. Donovan, tear down this house. And this one. And this one. And that one over there. That’s the message federal Housing Secretary Shaun Donovan should take with him from his visit to Buffalo last week.”

So begins a recent Buffalo News editorial on HUD Secretary Shaun Donovan’s visit to Buffalo. Demolishing vacant housing seems to be the preferred policy for resolving Buffalo’s housing crisis.

However, vacant housing isn’t Buffalo’s only housing crisis. Nearly 2,000 individuals and families in Buffalo cannot afford housing and as a result are currently homeless. This number does not reflect the many more that may be doubled and tripled up with friends and family or who are otherwise precariously housed and may be in danger of losing their homes.

It is a paradoxical situation: increasing housing vacancy rates along with increasing numbers of homeless individuals. How did Buffalo get here?

This graph from the Western Regional Advocacy Project’s report Without Housing tells part of the story:

Beginning with the Reagan Administration and continuing to the present, HUD’s subsidized housing budget has been slashed yearly. Thousands of units of affordable housing have been lost.

These cuts correspond to the dramatic increase in the number of homeless individuals in the 1980’s and the steady increases in homelessness since then.

Mr. Donovan must hear about both sides of Buffalo’s housing crisis: the vacancy as well as the homelessness.

He must hear that plans to revitalize or restore Buffalo’s housing stock must make the development and preservation of affordable housing a central priority. Otherwise this twisted paradox of a housing crisis will continue to hinder any attempt to revitalize this city.

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According to a recent Buffalo News article the New York Power Authority is working on a deal with Yahoo!, the Internet giant, to bring them into WNY.  The speculated deal would include giving Yahoo! power discounts totaling $101.2 million over the next 15 years.  The plant Yahoo! is planning to build would create 125 jobs, which means that New York Power Authority would be spending $809,940 over the course of the contract for every job created.

A couple of quotes from the article about the potential deal:

  • Referring to the amount being spent on each new job, “‘It’s exceptionally high, even for high-tech,’ said Greg LeRoy, a national expert on economic development subsidy programs.”
  • “‘There are a few other deals we’ve seen over the years in that neighborhood, but it’s stratospheric. It doesn’t have much company,’ said LeRoy, executive director of Good Jobs First, a nonprofit research and advocacy group based in Washington, D.C.”
  • “‘On a number basis,’ said Power Authority President Richard Kessel, ‘this doesn’t look like the greatest deal in the world, but we can’t look at the numbers alone.'”

Power Authority President Richard Kessel is correct; we can’t just look at the numbers.  We also have to look at what kinds of jobs these are and where they will be located. As far as location, Yahoo! is looking at building its plant in rural areas like Cambria, Lockport or Pembroke.  What kinds of jobs will these be?  An interviewee in the article described these jobs as “high-tech”.  This means they are sure to require at least a bachelor’s degree or some training.

A quick look at the NFTA’s website shows no public transportation to Cambria or Pembroke from Buffalo and no morning bus runs to Lockport from Buffalo. There also does not appear to be any scholarship or training programs for interested but unqualified workers associated with the deal. There will basically be no way for a low-income individual living in Buffalo to get a job at this potential plant if they do not have all the required qualifications and even if they do have the right qualifications, there will be no way for them to get to the job if they do not own a car, which is impossible for most low-income people.

If the deal goes through, this publicly subsidized plant will not create living wage jobs for the 1/3 of Buffalo that lives in poverty.  This is not to say that communities like Cambria, Lockport, and Pembroke don’t need these jobs but could that $101.2 million do more good for more people in our community if it were given to a company that agreed to locate close to the areas that need the jobs most?  To companies that will train some of the city’s thousands of unemployed workers?

If the city, county, or state ever hopes to end poverty and homelessness in Buffalo, it must make poverty its most important focus.  In deals like the one being hashed out with Yahoo!, our administrators and elected officials must ask themselves if huge deals like these will create good jobs close to the communities that need the jobs most.  Looking at the Poverty Challenge Budget it becomes clear that one of the major things that keeps people in poverty is their low-income.  Many of the jobs that are available in the city are service sector jobs that pay very little, are often part-time, and offer few if any benefits.  If the majority of jobs in a community pay poverty-level wages, then the majority of people in that community will stay in poverty.

Another aspect of the Poverty Challenge Budget that is sure to keep people in poverty is transportation.  Using private transportation (or owning a car) will automatically blow your budget and put you into debt.  But most of the decent paying jobs are outside the city, in places where there is little or no viable public transportation.  The job that may help you get out of poverty is then out of reach becasue you can’t afford the transportation to get there and you have to settle for the minimum wage jobs in your neighborhood (which are harder than ever to find becasue of the current recession).

You could go down the list of items and expenses in the Poverty Challenge Budget starting with the low-income (due to the lack of jobs or the existence of only low paying jobs in your community), the high cost of rent/utilities, the cost of transportation, the cost of cell phones (very necessary for prospective employers to call you back) and see all the expenses that keep 1/3 of Buffalo in poverty.  If our public officials ignore the poverty level budget and don’t address the need for living wage jobs, affordable rent, affordable transportation, etc. then thousands of people in Buffalo will continue to be impoverished.

The Yahoo! deal is another decision being made by public officials that does not have ending poverty as a  primary concern or even as any concern at all.  Deals that will create the kinds of jobs that will allow people to get out of poverty must be the ones we consider first if we have any desire to end poverty in Buffalo.  The $101.2 million deal with Yahoo! is a deal that is being created without any concern for the thousands of impoverished people in our community. (more…)

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That may seem like a ridiculous question.  Part of the reason I came to Buffalo was because I thought it was probably the most affordable place to live in the state*.  But the Center for Housing Policy‘s recently released report entitled Paycheck to Paycheck serves to remind us that for many working people, owning a home or even renting a 1BR apartment in Buffalo is unaffordable.

The report compares the wages of 60 occupations with the wages necessary to afford the cost of an average home ($100,000 including all associated costs) or the Fair Market Rent for a one-bedroom or two-bedroom apartment in different states and metropolitan areas.  Housing  is usually considered affordable if it amounts to 30% of your budget.  For example, CHP calculates the income needed for a one-bedroom apartment by multiplying the Fair Market Rent for a one bedroom apartment by 3, which would roughly give you the income needed for that month to afford the apartment.  That monthly number is then multiplied by 12 to get the yearly income necessray.

The report found that while the wage necessary to afford a home decreased (much of that having to do with declining home prices) the wages for many occupations, construction-related occupations in particular, still are not high enough to afford a home and in severe cases a two-bedroom apartment.  Fair Market Rents continued to increase in most areas, which is very troubling given the big increases in unemployment and that renting is usually the more affordable option for low-income people.

The homeownerhsip and rental information for Buffalo, a town that most people consider a very cheap place to live, is also very troubling.  Fair Market Rent for a two-bedroom apartment increased from $704 in 2008 to $723 in 2009, a 2.7% increase.  Even more disturbing are the number of service sector wages that are not high enough to afford a one or two bedroom apartment, let alone a home.

Consider these graphs which show the income needed to afford a home, one bedroom, or two bedroom apartment in Buffalo along with the incomes of a selection of service sector occupations (which represents a large portion of the employment available in Buffalo):

Annual Income Needed to Afford a Home

homeownership 1

Other occupations that did not earh enough to afford a home included: hairdresser, home health aide, housekeeper, janitor, laundry worker, nursing aid, office clerk, packager, parking lot attendant, receptionist, retail salesperson, school bus driver, security guard, stock clerk, stock mover, telemarketer, and wait staff.

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The narrative surrounding the foreclosure crisis of the past year has tended to focus primarily on the foreclosure of homes that were owned by the people who lived in the them.  This article shifts the focus to the rental properties that have been foreclosed upon.  Many of the tenants of these rental properties do not have very high incomes (which is one reason they have to rent instead of own a home) and after the foreclosure they are usually left without a home and do not have very much to fall back on.  People like Yolanda James will burn through the resources they have left until they eventually become homeless.

The article also highlights how rental property foreclosure disproportionately affects communities of color which already have been devastated by economic and racial inequalities for decades.  It also calls for a rethinking of the “ownership society” ideal which the federal government tends to put the majority of its funding into.  Affordable and secure rental housing is crucial for low income families and individuals who do not have the ability to put up the money to own a home yet.  Any effort to end poverty and homelessness must incorporate this type of housing into its plan.

Foreclosure Crisis Hits Poor Renters Hard: Evicted Families Have to Fight to Live Together

By Michelle Chen, ColorLines. Posted May 26, 2009.

Last fall, Yolanda James and her three children were lost in their own city. After foreclosure had forced them from their South Los Angeles apartment, they ran into closed doors at every turn. Aid agencies offered referrals to other offices, but no relief, and neither the shelter system nor the city’s high-priced housing market had room for them. James burned through her welfare money to pay for motel rooms and later resorted to sleeping with her children in their car.

“I was, like, two or three different people at one time,” she recalled. “I had to get on the grind, to hustle, to make sure my kids–when they get out of school, I could feed them, or I could take them somewhere to shower and bathe for the next day.”

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Unfortunately New York, a city that is home to some very progressive Housing First programs (like Pathways to Housing), is also home to some very backward ideas about how to end homelessness.  This article is about Mayor Bloomberg’s recent decision to enforce a 1997 state law that requires residents who are staying in one the city’s publicly run shelters “to pay a certain portion of their income”.  People like Dacosta who are working a minimum wage job and trying to pick themselves up by the boot-straps are now going to have to pay hundreds of dollars to stay in the shelters.  This is money that could be saved up for a security deposit or to pay off debts or loans.  People like Dacosta will never be able to get ahead if they cannot save up money to make the transition out of a shelter.

Bloomberg’s decision to enforce this law is a great example of social welfare policies that support a person only enough to just get by.  With these kinds of policies all it takes is one emergency and the person is locked into a spiral of debt that they may never be able to get out of.  Social welfare policies should help a person establish a firm base from which they can make real progress to get out of poverty.  Guaranteeing that a person will have a home, regardless of income, is an important way to establish a firm base.   Bloomberg’s policy will only hamper the efforts of anyone attempting to get out of poverty.

New York Charges Rent for Working Homeless

Robert Stolarik for The New York Times
May 9, 2009

New York Charges Rent for Working Homeless

The Bloomberg administration has quietly begun charging rent to homeless families who live in publicly run shelters but have income from jobs.

The new policy is based on a 1997 state law that was not enforced until last week, when shelter operators across the city began requiring residents to pay a certain portion of their income. The amount varies based on factors that include family size and what shelter is being used, but should not exceed 50 percent of a family’s income, a state official said.

Vanessa Dacosta, who earns $8.40 an hour as a cashier at Sbarro, received a notice under her door several weeks ago informing her that she had to give $336 of her approximately $800 per month in wages to the Clinton Family Inn, a shelter in Hell’s Kitchen where she has lived since March.

“It’s not right,” said Ms. Dacosta, a single mother of a 2-year-old who said she spends nearly $100 a week on child care. “I pay my baby sitter, I buy diapers, and I’m trying to save money so I can get out of here. I don’t want to be in the shelter forever.”

City officials said the new rent requirement had been in the works since a 2007 state audit that forced them to pay back $2.4 million in state housing aid that should have been covered by homeless families with income. They argued that homeless people with income should be expected to pay for a portion of their shelter costs, a model that echoes the federal Section 8 housing voucher program.

“I think it’s hard to argue that families that can contribute to their shelter cost shouldn’t,” Robert V. Hess, the city’s commissioner of homeless services, said in a telephone interview Friday. “I don’t see this playing out in an adverse way. Our objective is not for families to remain in shelter. Our objective is to move families back into their own homes and into the community.”

It is unclear why the state law has not been enforced until now. New York’s situation is unusual, with far more working homeless families than elsewhere in the state, and higher housing costs than virtually anywhere in the country.

Anthony Farmer, a spokesman for the State Office of Temporary and Disability Assistance, said the new policy will eventually affect about 2,000 of the more than 9,000 families in New York City shelters. More than 500 families have been informed that they were expected to begin paying rent on May 1.

City officials said they started with families who are new to shelters, and would phase in the new approach over the next several months, including for people who are on welfare and are also working. They could not yet estimate how much it would raise.

A flier posted in one shelter last week warned residents in bold, underlined type, “Failure to make the required contributions could result in the loss of your family’s temporary housing.”

But advocates for the homeless said the new policy was punitive and counterproductive, and some shelter residents, in protest, have already refused to sign the documents acknowledging receipt of the rent notifications.

“Families have been told to pay up or get out,” said Steven Banks, the attorney in chief for the Legal Aid Society. “The policy is poorly conceived, but even more alarmingly, it’s being poorly executed. What is happening is that we have seen cases of families being unilaterally told, without any notice of how the rent was calculated, that they must pay certain amounts of rent or leave the shelter. We’ve already had a case of a survivor of domestic violence who was actually locked out of her room.”

Mr. Hess acknowledged that if a family does not pay the required rent, it could be told to leave the shelter, but he noted that residents can contest the rent required through a state hearing.

Ms. Dacosta, for one, said she had spoken with her caseworker and demanded a hearing. Martha Gonzalez, who is 49 and lives with her 19-year-old son in a rundown shelter in Fort Greene, Brooklyn, said she was informed last week that she owes $1,099 in monthly rent on a $1,700 monthly income as a security guard in Midtown. She said she planned to contest the rent demand in court.

City officials did not immediately respond to Ms. Gonzalez’s assertion that her rent would exceed half of her income.

Patrick Markee, the senior policy analyst of the Coalition for the Homeless, called the policy “impractical,” arguing that most working people who live in homeless shelters earn low wages and would be better off saving for a place of their own. “It’s going to make families stay in shelter longer because they’ll have fewer financial resources,” he said.

“They are taking money from them that could otherwise be used to help themselves get out of the shelter system,” agreed Arnold S. Cohen, the president and chief executive of the Partnership for the Homeless. “We’re dealing with the poorest people, the people who are the most in need, and we’re asking them to pay for a shelter of last resort. As a city and a state that has a history of social and economic justice, I think we can do better than that.”

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