We are not alone in our affordable housing crisis — nationally, for every 100 families that need one, there are 35 affordable homes available. Locally, one example will do: The most recent apartment complex built in the East End ended up with two supposedly affordable apartments out of a total of 163, while its website shows the lowest rent as $1,025 per month.
For a market zealot, the fact that demand exists that is not met by increased supply can only be the result of excessive regulation. But watching the Kabuki theater of property speculators, their lawyers, Council and its committees paints a different picture. Time and again the same sad tale plays out: The project can only be financed if we build more apartments in total but fewer affordable ones. Later there’s a tale of woe about how unexpected developments mean that they need to pack in yet more apartments and cut back even further on the affordable units. Council members profess to be heartbroken and approve whatever is put in front of them.
These performances have happened often enough that we can see some patterns.
We are near the end of a 10-year period when interest rates were zero for the privileged; unprecedentedly low for the rest of us. Now that interest rates are going up, hurdle rates for investments will rise in parallel — and fewer projects will be able to meet them. So if Council believes what we have now is a crisis, their vocabulary is going to be sorely tested by the situation in five or 10 years’ time.
“Unexpected developments” afflict amateurs. Professionals understand and hedge their risks, either financially or in their project design.
Suppose Council had enforced its own ordinances and rejected these deficient projects. What would we have lost? Very few affordable homes — they’re not getting built. Lots of homes for rich folk, whose cars and trucks clog up our streets. And lots of apartments — cough, cough — on Airbnb.
If a project falls short of its commitments, its managers have broken their contract with us, but it’s probably unrealistic to expect the city to police violations of the Unified Development Ordinances with the same vigor as violations of Section 19-85 for jaywalking. Simply repaying cash incentives received from the city is not enough: By then, the project has left noncompliant buildings as a giant middle finger in our midst for years to come. At the very least, anyone connected with it should be made to understand that they will not receive any further financial aid funded by our taxes.
Even if they included 50 affordable homes each — rather than two — it would take 100 projects to clear the 2014 estimate of our backlog. It’s time to stop sleepwalking into the future and accept that asking greed-driven property speculators to solve this crisis for us will never work. The way forward starts with understanding that the sugar high of property speculation and the accompanying trickle-down lies are not the answer: Up-skilling our kids is. Our future needs to be based on much more than just new buildings — jobs need to be created that pay well enough that the demand for affordable homes falls. And that begins with investing in public libraries, schools and out-of-school programs for our kids — and ourselves.
— Geoff Kemmish