Monday, January 20, 2020

Why affordable housing is scarce in shrinking Baltimore

Crime, transportation and housing are a trifecta of Baltimore's glaring, in your face deficiencies. The City's pathologies frequently go back to one of these three or a tangled combination of them.

Housing is particularly vexing: The ever shrinking Baltimore has tons of surplus housing and yet thousands are homeless. In spite of the oversupply housing cost is too high or income too low so tens of thousands crowd a waiting list for subsidized housing. The number has become so ridiculously large, that the Housing agency simply closed the list, whereby it doesn't matter whether people are clamoring to rent a designated "affordable" low rent unit or are trying to obtain a voucher which makes the rent affordable via subsidies for market rate units. Both are almost unattainable.
Meanwhile luxury housing towers rise, even though the City stubbornly fails to grow.
Luxury apartment tower on Light Street (Photo Philipsen)
The demand for affordable housing in Baltimore, particularly affordable rental housing, is well documented.  More than 3,000 persons are homeless and over twenty percent of all households are annually spending more than half their income on housing.    Most of these severely cost burdened households are poor.  Of the 51,360 households that fall into this category, 92% earn half or less of the area median income (AMI).  75% earn less than one-third of AMI.   For a family of four this is an annual income of less than $27,351.  Two-thirds of the severely cost burdened households earning half or less of AMI are renters.  Much of what is identified as a housing problem in Baltimore is really an income problem. (Baltimore Housing)
Area residents struggle for explanations and those responsible for housing, the Housing agency, split in two by a disgraced Mayor, is trying to solve the problem with more programs than anyone can follow or understand. The programs share one thing: They don't have enough funding.

At times the desire to shed light into the protracted problems sometimes takes curious turns. Last week the Baltimore Business Journal and the SUN reported about a $250,000 Fannie Mae grant to study how to provide housing for the homeless with a focus of school children and housing near schools. This fits nicely with a program called INSPIRE, which stands for Investing in Neighborhoods and Schools to Promote Improvement, Revitalization, and Excellence and has been in place for years. The most recent newsletter published to inform about inspire appeared in February 2018. Little progress was made in stabilizing housing around the Century schools slated for
Luxury mixed use tower on Light Street (Photo Philipsen)
renovation. The question is only, what is it that needs to be studied in this well understood nexus between schools and housing? $250,000 is not much money considering the estimated 3,000 homeless, but assuming that only a part of the homeless had children that needed to attend school, it could be a sizable chunk to provide direct aid instead of yet another study.
The median housing value in the Baltimore-Towson MSA increased 78.9% between 1990 and 2008, after adjusting for inflation. Median gross rent increased 19.2% during the same period. By comparison, after adjusting for inflation. real household income increased only 4.2%. (Housing Report)
Last year an article in the SUN touted Baltimore Housing funds to accommodate 50 homeless in vacant affordable units which the Authority owned. Wait, you would say, how do they have vacant units if there are so many on the wait lists? The answer is sad: There aren't enough funds to keep all public housing units in good repair. As a result ,and in spite of the exorbitant need, they remain empty and uninhabitable. How would putting the homeless into those units help, wouldn't they need to be fixed up for the same cost? The answer: To place the homeless, the Authority could tap into a pool of resources for the reduction of homelessness that was not available for regular renovation. The program started with $500,000, it isn't clear if it was continued and expanded as originally anticipated.
Abandoned rowhouses (Photo Philipsen)

Occasionally legislators also address the housing problem. In that vain and after much public debate the City and the County both implemented legislation that forbids landlords to deny renters based on the use of vouchers. Both jurisdictions watered the already mostly symbolic bills down by exempting small landlords from the prohibition of voucher discrimination. The bill may expand the amount of units available to voucher holders slightly, but it certainly won't relieve the voucher shortage.

More promising: In 2018 Baltimore created an Affordable Housing Trust Fund fueled by transfer taxes. Unless the economy tanks, the fund should gain about $20 million per year. That would generate about 4,000 units in 10 years. By comparison, the wait list was cut off at 14,000 applicants.
Metro Heights, Mondawmin affordable housing (Moseley Architects)

These examples show, that in Baltimore the housing shortage is fought around the margins and in increments not large enough to really make a difference. It feels like fighting ballistic missiles with fly swatters, Baltimore Housing's 2020 Action Plan notwithstanding. This is not to say that the actions in themselves are cheap. They are only small in comparioson to the enormity of the problem. In the last two years Baltimore Housing spent nearly $33 million each year on rehabilitation of the existing affordable inventory. Similar amounts were disbursed for new construction of affordable housing through tax credits, HOME funds and bonds, translating into about 250 new affordable units per year. For 2020 Baltimore Housing plans to assist funding for the construction of 266 units.

On North Avenue new affordable units are going up at Walbrook Lumber site, in downtown a new development on Liberty Street was recently completed, construction begins on the 76 units for Four-Ten Lofts at the corner of Eutaw and Mulberry Streets, new affordable apartments were also completed near the West Baltimore MARC station on Warwick Avenue and near the Metro Station at Mondawmin. All of these developments are well designed and a far cry from the "projects" of old. Yet, they are not enough to turn neighborhoods nor enough to shorten the waitlist.
The L on Liberty Street (Fillat Architects)

The number of new new luxury apartments being built beats the production of affordable units by more than a factor of three. For the 250 new affordable units in 2019 nearly 800 new luxury units went online according to the BBJ.  In a city plagued by high crime, bad transportation, homelessness, an affordable housing shortage and a stubbornly high poverty rate near 1 in 5 households, way above the national average, this is a quite surprising proportion.

Some see this as a sign that the city is on the mend because investors have confidence in spite of crime and lacking transit and affluent people with many choices don't seem to mind city living. Others see this as a sign of an ever larger drift between the "two Baltimores" in which the rich live a happy life while the poor are begging in the streets. The disparate halfs take increasingly place in the same place. Beggars and squeegee kids assemble at the intersections right below glitzy new apartment towers and crime is no longer contained to Baltimore's ghettos.

The luxury buildings finished last year are prominent on the skyline and include One Light, the Liberty in Harbor East, Bainbridge at Federal Hill and the Anthem House in Locust Point. 414 Light Street, the tallest residential tower in the City is the most visible exponent of the luxury apartment wave and gives the appearance as all is fine with Baltimore.
Liberty tower Harbor East (Bozzutto)

Baltimore's housing situation has been well studied. For example in a 2012 regional report about access to affordable housing. Over the decades Baltimore has received large and small federal funding to remedy its housing. Nothing reverted the trends of shrinkage combined with an ever larger deficit of affordable housing. In fact, the large federal grants which came under the name of HOPE VI turned thousands of affordable units into the dust that remained of the infamous public housing highrises ringing downtown. New construction never matched the lost affordable public units. Even new funding for projects like Perkins Homes and Somerset don't add affordable housing. That they intend to fully replace demolished affordable units one for one is now considered progress. This will be achieved through increased density, mixing affordable units up with market rate housing.

In an election year the housing issue rises to special importance, especially for the Baltimore Mayor race and the presidential race. It is important to remember that Baltimore's housing problem isn't unique. Cities across the United States experience affordable housing shortages, growing segments of luxury housing and record numbers of homeless, whether they are growing or shrinking.
New affordable housing on Eutaw and Mulberry Streets (Moseley Architects)

In fact, the housing crisis is too large for the individual cities to solve it without significant federal aid. The response to the housing crisis must be multi-prong and include at least the following elements:
  1. increase in affordable housing production through increase of available low-income housing tax credits (LIHTC
  2. increase in available housing vouchers (HCVP) through HUD
  3. increase in the production of affordable units through inclusionary zoning and benefits agreements
  4. decrease in the demolition or re-purposing of existing affordable housing
  5. increase in assistance for low income home-owners so they can maintain their property
  6. increase in renter assistance for renters in danger of eviction
While items 1 and 2 require significant amounts of money, items 3-6 either come without cost to public coffers, or the benefits far outweigh initial cost. For example:
  • in Baltimore multi-familiy housing over 20 units receives a 10 year tax credit program regardless whether they are luxury, market rate or low income. Those tax credits should only be given if developers provide a certain percentage of affordable housing units
  • Baltimore still sees transfer of affordable housing into market rate housing or outright demolition of affordable housing without replacement. A policy of no net loss needs to be implemented through incentives and regulation
  • Many low income homeowners struggle to keep the dwelling units or houses in decent shape due to a lack of equity and loans, a condition that is largely a result of past redlining and the artificially low value of real estate in formerly redlined areas. Modest amounts of money would help those homeowners with repairs and prevent their homes to be become vacant and allow owners to stay healthier
  • Many low income renters are one paycheck away from eviction and homelessness. Aside from social justice issues, stable housing is key for reducing health care cost, achieve better education and allow residents to obtain or hold a job.  Small bridge loans allowing renters to stay in their dwellings would see huge paybacks. Renter protections need to be strengthened as well.
Four Seasons condo tower, Harbor East (Photo: Philipsen)
Neither federal aid nor decisive local housing programs are in sight though, unless the upcoming elections provide the necessary policy change.

On the federal level, presidential candidate Elisabeth Warren has one of the most comprehensive housing plans, suggesting to invest $500 billion in ten years, mostly by increasing construction of affordable housing. Booker, Harris and Castro, who also spoke about reparations to make up for the giant amount of wealth taken from African Americans through redlining, have since dropped out of the race.  Housing had briefly been such a hot topic in the presidential debate that CityLab had asked whether housing would be a decisive factor in the election.  Since then, foreign policy and impeachment have overshadowed housing on the national stage.

In Baltimore the indictment of the Mayor and rampant crime have blotted out any other topic. It is time to ask the candidates about their housing plans. Especially since housing, crime and transportation are all entangled.

Klaus Philipsen, FAIA

also on this blog:

One way to have fewer vacant rowhouses

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