Affordable Housing A False Panacea

Affordable Housing has found a prominent place in the public discussion over the last few weeks after housing advocates staged a rally near the lakefront to raise awareness.  Supporters argue that Jim Rouse wanted janitors to live next to CEO's and that Columbia is boxing out the former.  They further contend that their children can't afford to live in Columbia.  Housing advocates want "full spectrum" housing that general describes a diversity of housing prices and access points for various levels of income.

The real question is what do lower income families want?  And does affordable housing help them build wealth?

I have significant concerns related to Affordable Housing as we all know it, particularly what may crudely be referred to as "door-knobs" over "in lieu" payment.  For the uninitiated, when advocates use the term "doorknobs", they are saying an affordable housing unit needs to be actually built and sold as MIHU as opposed to some payment being made by the developer into an Affordable Housing Trust.

We all love the idea of affordable housing, little a, little h.  But homeowners who buy into Affordable Housing units, big A, big H, are trapped in financial purgatory. "Deed restrictions" on the resale of the property, that may run for as long as 99 years, prevent them from building wealth from the asset.  That means one of the core reasons for purchasing a home, and not renting, is absent.  Meanwhile, all of the burdens of home-ownership remain.

For that reason, and many others, I would never want my child to purchase an affordable housing unit.  I would also feel paternalistic in wanting that "janitor" to live next to a CEO knowing that they are there under very different financial circumstances with very few benefits for the experience.  Moreover, the conclusion that poor families transposed to rich or middle class neighborhoods help lift their station has had mixed results under academic scrutiny.  A recent study by Duke showed that young boys actually do worse under these circumstances.

Probably the best circumstance for affordable housing would be for a certain percentage of Columbians to agree to sell their houses at below market rate.  I say that with no sarcasm slight sarcasm intended.  That, in effect, is what we are asking of land developers except we could do our part without the deed restrictions that destroy the purpose of affordable housing.  Yet, I doubt passion for this cause runs that deep.

Have a great Monday doing what you love.