Affordable housing models that could work?

[Frances]

15 minutes ago, Happy2BaMom said:

That's the way AirBnB started, but that isn't really the case anymore. According to AirDNA (a data & analytics company specializing in vacation rental companies; report available through link), only 38% of AirBnB listings are homeowners with a single listing. In some vacation hot spots, corporate ownership can be up to 90% of the listings.

Which is not to take away from the fact that 38% is still 38%, and those individuals should be exempted from any gov't requirements, restrictions, & taxes that should (IMHO) be applied to corporate & multiple-property ownerships.

I wonder what the % is for VRBO which was always intended to be full properties, not spaces in someone’s home or on their property? Personally, I think the dividing line should be between those who live in the house or on the property as their primary residence and rent out parts as as short term rental and those, whether individuals or corporations, who are using a property purely for short term renting. The latter is really no different than a hotel from a business perspective. Legally, I think it’s much easier to treat properties used for different purposes differently as opposed to treating different types of owners differently, but there are probably others here who are more knowledgeable.

[TechWife]

10 hours ago, frogger said:

That isn't how it works in my city. We do have community feedback and it can get really nasty. Even if the developers work with the comnunity to change different aspects the long drawn outprocess makes things costly. Time is money after all. They have shut down reasonable projects. They wanted to shut down the housing project I spoke of earlier in this thread but it made it through and actually made the whole neighborhood nicer. 

Unless your area has some weird laws, the  people in the community have the ear of the decision makers like town council members and are convincing them of their viewpoint, which is their right as a citizen. Elected officials taking into account the opinions of citizens is not the result of too much government involvement in the process, nor is establishing and adhering to zoning regulations. Those are all normal functions of government. 

[frogger]

14 minutes ago, Happy2BaMom said:

That's the way AirBnB started, but that isn't really the case anymore. According to AirDNA (a data & analytics company specializing in vacation rental companies; report available through link), only 38% of AirBnB listings are homeowners with a single listing. In some vacation hot spots, corporate ownership can be up to 90% of the listings.

Which is not to take away from the fact that 38% is still 38%, and those individuals should be exempted from any gov't requirements, restrictions, & taxes that should (IMHO) be applied to corporate & multiple-property ownerships.

Regardless of number of listings I do think they should be taxed as hotels as mentioned above but I did find the article confusing.

For one focusing on people with only one listing doesn't take it out of average joe territory. I know an electrician with 6 kids. When they moved out of their home they turned it into 2 listings because the layout allowed them to do so. Then in the summer they camp out at her sister's property and rent out their own home. Yes, they move out of their own home in the summer so they can make money since they are raising 6 kids on an electricians salary! So they would be people mislabelled by the article since they have three listings. Since they are moving out of their own home and camping they are not decreasing the number of homes available for long term living except for one house they could have sold instead. So the being super focused on making sure people have a single listing is weird.

Everyone I know that does it air b&b has multiple listings not one but they still aren't big corporations. 

I am curious. Does the article writer not consider a homeowner worried about management and fees giving the reigns over to a property manager an individual host? Should an elderly person for example be able to manage the bookings and such themselves or they are classified as a corporation then because they hired someone to take care of it for them? 

I could see vacation rentals in a ski town owned by a variety of people using one property management company for their individual places for example since they aren't there. If you classified that property management person as an owner then it will look like one corporation owns them.   Those types of vacation homes are more likely to be owned by wealthy people so maybe not average joes (though some may be) but it still seems a slight of hand article. It is probably some local who needed a job in a jobless ski town and realized he could manage other peoples property for a buck. I mean managing 20 some properties isn't reaching amazon proportions so I just don't honestly know what to make of it. 

 

[BusyMom5]

And to add to the drama that is AirBnB, those types of rentals are very popular with short-term tenants like traveling nurses, doctors, and other professionals who stay in one area for a few months at a time.  It does fill a need for professional housing.  I have several friends who have one to three Air BnBs.  They get a lot of situations like this:  elderly mom is sick,  daughter and her kids move in for a month to care for her, lots of traveling nurses and doctors, families considering moving to the area so they rent it for one month, families between houses- buying or selling.  There have been a lot that rent for a month or more.  Is this "short term?"  It's not vacationers- we aren't a vacation destination.  Most of the time it's people visiting extended family.  

[SKL]

I really like staying in an apartment or house type place on vacation.  Anytime you're traveling with more than 4 people, hotel options are more expensive than an average airb&b, with a lot less comfort and flexibility.  I don't want laws that make this option impossible.  I don't know how they're taxed, licensed, etc., but whatever laws are created shouldn't be such that the only beneficiaries are the hotel chains.

[Brittany1116]

So the first person in the article is spending 42.5% of her gross annual income on affordable housing. 😕

[Frances]

2 hours ago, BusyMom5 said:

And to add to the drama that is AirBnB, those types of rentals are very popular with short-term tenants like traveling nurses, doctors, and other professionals who stay in one area for a few months at a time.  It does fill a need for professional housing.  I have several friends who have one to three Air BnBs.  They get a lot of situations like this:  elderly mom is sick,  daughter and her kids move in for a month to care for her, lots of traveling nurses and doctors, families considering moving to the area so they rent it for one month, families between houses- buying or selling.  There have been a lot that rent for a month or more.  Is this "short term?"  It's not vacationers- we aren't a vacation destination.  Most of the time it's people visiting extended family.  

We get lots of traveling nurses here and there are plenty of full basement apartments in homes or accessory dwelling where they can rent. Before VRBO and AirBnb even existed, people here rented out these kinds of spaces for traveling workers, legislators during session, visiting family, etc. and continue to do so. Month to month apartment leases are also not uncommon here.

In a very nice upper middle class neighborhood here a landlord didn’t know her month long renters through VRBO were running a drug operation until the police raided the premises and found a huge stash of drugs, money, and guns. No one called to let her know after the raid, not the police nor her property management company. A neighbor of the short term rental who had previously had to deal with problem renters called her. Incidences like this would be far rarer if the owners and renters were on the same property. In the newspaper article about the incident, police interviewed said people using VRBO and AirBnb for this purpose are becoming increasingly common and they always choose entire houses in upscale neighborhoods.

While I infinitely prefer AirBnb type places to hotels when traveling, we now only rent those where the owner resides on the property due to the devastating impact on housing affordability and availability almost everywhere. I’m not talking a room in someone’s home, but a separate apartment type situation either in the basement or elsewhere on the property. I realize even these types of places could provide long term housing if not being used short term, so are not without issues.

Edited January 20 by Frances

[Frances]

1 hour ago, SKL said:

I really like staying in an apartment or house type place on vacation.  Anytime you're traveling with more than 4 people, hotel options are more expensive than an average airb&b, with a lot less comfort and flexibility.  I don't want laws that make this option impossible.  I don't know how they're taxed, licensed, etc., but whatever laws are created shouldn't be such that the only beneficiaries are the hotel chains.

I don’t think hotel chains are the only beneficiaries when say a jurisdiction doesn’t allow entire homes (or apartments in big cities) to be used for short term rentals. Often neighbors are very relieved to no longer have to deal with parties, loud noise, police calls, excessive trash, etc. Having the owner on the property prevents most of this from happening. Not to mention more houses available for locals to buy or rent long term, the main thrust of this thread.

Edited January 20 by Frances

[Ottakee]

One housing option I would love to see is turning an old nursing home into efficiency suites.   The double rooms with the bathroom between could become a living/kitchenette area on one side and a bedroom on the other.

These could then be marketed to older residents who are independent but don’t need space and could benefit from handicap accessibility.    Other residents could include adults with mild disabilities that are ready for their own place but not a house or full apartment.  Young professionals could also live there.

Tuen there would be an onsite manager.  The commercial kitchen could be used to provide one hot meal a day and a stocked fridge for lunches, etc.  Depending on the area, it could also be open as a cafe to the public.

The offices could be used for a social services worker that could be there to help with social security, Insurance, food cards, and all of the other paperwork people need help with.

public bus stop at the door for transportation.

 

i have big dreams……just no money.

[Heartstrings]

5 minutes ago, Ottakee said:

One housing option I would love to see is turning an old nursing home into efficiency suites.   The double rooms with the bathroom between could become a living/kitchenette area on one side and a bedroom on the other.

These could then be marketed to older residents who are independent but don’t need space and could benefit from handicap accessibility.    Other residents could include adults with mild disabilities that are ready for their own place but not a house or full apartment.  Young professionals could also live there.

Tuen there would be an onsite manager.  The commercial kitchen could be used to provide one hot meal a day and a stocked fridge for lunches, etc.  Depending on the area, it could also be open as a cafe to the public.

The offices could be used for a social services worker that could be there to help with social security, Insurance, food cards, and all of the other paperwork people need help with.

public bus stop at the door for transportation.

 

i have big dreams……just no money.

I follow a woman on TikTok who buys old hotels and turns them into small apartments.  She purposely keeps the rent pretty low and a lot of her tenants are on section 8.  She's working hard to make money for herself while also benefiting the community.   

[happypamama]

There's a place near us that is doing a hybrid hotel/dorm/apartment model from a hotel/conference center. The first floor is traditional hotel rooms, while the second floor is studio apartments with almost full kitchens (cooktop, dishwasher, full fridge, microwave, no oven) and your own full bath, furnished or unfurnished. Lots of shared amenity space and flat rate basic utilities. It's way more affordable than apartments around here, and you get more privacy than renting a room in a shared house. It reminds me of the college dorms but a step up, and I think DH and I could have lived there easily as newlyweds. And they offer leases of any length from one to eighteen months. They even allow small pets and have storage lockers. I think it's a really great idea for helping people get back on their feet, downsize, first apartment, traveling workers, etc. 

[KSera]

7 minutes ago, happypamama said:

There's a place near us that is doing a hybrid hotel/dorm/apartment model from a hotel/conference center. The first floor is traditional hotel rooms, while the second floor is studio apartments with almost full kitchens (cooktop, dishwasher, full fridge, microwave, no oven) and your own full bath, furnished or unfurnished. Lots of shared amenity space and flat rate basic utilities. It's way more affordable than apartments around here, and you get more privacy than renting a room in a shared house. It reminds me of the college dorms but a step up, and I think DH and I could have lived there easily as newlyweds. And they offer leases of any length from one to eighteen months. They even allow small pets and have storage lockers. I think it's a really great idea for helping people get back on their feet, downsize, first apartment, traveling workers, etc. 

We have quite a few like this in our nearest city, but boy are they expensive for a space that’s often less than 200 sq ft! 

[TechWife]

1 hour ago, Ottakee said:

One housing option I would love to see is turning an old nursing home into efficiency suites.   The double rooms with the bathroom between could become a living/kitchenette area on one side and a bedroom on the other.

These could then be marketed to older residents who are independent but don’t need space and could benefit from handicap accessibility.    Other residents could include adults with mild disabilities that are ready for their own place but not a house or full apartment.  Young professionals could also live there.

Tuen there would be an onsite manager.  The commercial kitchen could be used to provide one hot meal a day and a stocked fridge for lunches, etc.  Depending on the area, it could also be open as a cafe to the public.

The offices could be used for a social services worker that could be there to help with social security, Insurance, food cards, and all of the other paperwork people need help with.

public bus stop at the door for transportation.

 

i have big dreams……just no money.

A friend proposed to me that when our area "grows up" and the population ages, that the schools could be turned into retirement & nursing homes. Here, if a nursing home is empty, either the license got pulled by the state and they haven't sold the building yet or the building is in such bad shape that the nursing home relocated and it needs to be torn down.

[scholastica]

1 hour ago, Ottakee said:

One housing option I would love to see is turning an old nursing home into efficiency suites.   The double rooms with the bathroom between could become a living/kitchenette area on one side and a bedroom on the other.

These could then be marketed to older residents who are independent but don’t need space and could benefit from handicap accessibility.    Other residents could include adults with mild disabilities that are ready for their own place but not a house or full apartment.  Young professionals could also live there.

Tuen there would be an onsite manager.  The commercial kitchen could be used to provide one hot meal a day and a stocked fridge for lunches, etc.  Depending on the area, it could also be open as a cafe to the public.

The offices could be used for a social services worker that could be there to help with social security, Insurance, food cards, and all of the other paperwork people need help with.

public bus stop at the door for transportation.

 

i have big dreams……just no money.

This is a great idea! 

[SKL]

9 hours ago, TechWife said:

A friend proposed to me that when our area "grows up" and the population ages, that the schools could be turned into retirement & nursing homes. Here, if a nursing home is empty, either the license got pulled by the state and they haven't sold the building yet or the building is in such bad shape that the nursing home relocated and it needs to be torn down.

The elementary school I attended was transformed into low-income housing (or perhaps transitional housing) at some point.  Interesting idea.  I haven't visited it to see how the floor plan works.

ETA - looked it up, and apparently it's been sold to be used for a parochial school again.  No idea why.

Edited January 21 by SKL

[Carrie12345]

20 hours ago, Frances said:

I don’t think hotel chains are the only beneficiaries when say a jurisdiction doesn’t allow entire homes (or apartments in big cities) to be used for short term rentals. Often neighbors are very relieved to no longer have to deal with parties, loud noise, police calls, excessive trash, etc. Having the owner on the property prevents most of this from happening. Not to mention more houses available for locals to buy or rent long term, the main thrust of this thread.

To me (me, me, me), STRs are zoning nightmares. My old house is in a large, private development that allows STRs, and my new house is in an un-gated private development that doesn’t allow anything shorter than a 6-month lease, both in a township that has very little regulation on STRs at the moment.

For me, me, me, it’s a personal ick. An income producing business that impacts neighbors in a residential zone is technically banned, but vaguely worded. Meanwhile, I tried to buy 16acres of commercial land but wasn’t allowed to live on it. How does that make sense?

If commercial = no residence, how can residential be allowed = commercial impact on neighbors?

IMO, STRs should be included in % of commercial planning at the very least. But the public does have a voice, and ours own a lot of STRs.

Also, when my house lists, I’m not legally allowed to discriminate against investors vs. families. That bites, imo. I want to be respectful of the current neighbors and of potential primary home-needers, but it’s considered unethical. 😳

[Mrs Tiggywinkle Again]

The middle school in my old town was transformed into apartments for low income, elderly people(and frankly the vast majority of elderly there are low income).  In fact they named it Middle School Apartments.  It was a huge expense to bring the 1905 building up to code and transform it into apartments though.

[Pam in CT]

I agree with SKL that -- as a traveler -- it's soooo lovely / more comfortable / more conventient / more affordable to stay in a house or apartment with a group > 4 than to stay at a hotel. Also with frogger that a lot of VRBO / airBnB listings are regular (albeit home-owning) folks, who may literally be moving out of their primary residences for a few days or weeks, to make a bit of money on the side.

The lens of what's-nice-for-travelers, or the lens of what's-a-nice-way-for-regular-joe-homeowners-to-earn-a-bit-extra, is a different question than the OP "what are affordable housing models that will work," though.  The OP centers a question around the needs of people who don't have access to a primary place to live, which is a different segment of people than EITHER vacationers or homeowners.  (Not to suggest that either vacationers or homeowners don't Also Matter, nor that public policy has to balance different interests of different segments that often pull in different directions or blah, blah, blah - just noting that, what we see as "good" depends on where we stand.)

 

We have a pretty sturdy state law that imposes a mandate that every town, even rural ones and even Gold Coast wealthy ones, are required to ensure that both a % of all new units, and a lower % of all total units, are "affordable" (defined in relation to state median income). It was widely and bitterly resisted by both rural and wealthy towns when it first was adopted and has been tweaked a couple times since in response to litigation, but it remains in place. Towns are free to meet the mandate however they choose -- my own, for example, has mostly met it through senior housing of various sorts, which meets the letter of the law if not its full democratizing and diversifying intent. But if towns FAIL to meet the %-of-total after a certain number of years subsequent to state warning, then there is a mechanism by which developers are able to more-or-less circumvent town zoning re height restriction, parking requirements and etc. The law is DESPISED by rural and wealthy towns alike but it definitely does nudge toward the approval of more (smaller and affordable) units in a geography where 2 acre lot 4+ BR $$$$  houses are otherwise the norm.

 

[goldberry]

11 hours ago, Carrie12345 said:

 

Also, when my house lists, I’m not legally allowed to discriminate against investors vs. families. That bites, imo. I want to be respectful of the current neighbors and of potential primary home-needers, but it’s considered unethical. 😳

What kind of law regulates that? Are investors now a protected class? That sounds crazy.

[KungFuPanda]

I feel rather lucky that short term rentals are disallowed in my county.  When we travel I do prefer a kitchen and bedroom, but I've always managed to find that in hotels with condo-type units or cabins/cottages.  We haven't traveled extensively in a long time and from my perspective, all travel arrangements seems so easy compared to sourcing accessible lodging.

[frogger]

16 hours ago, Carrie12345 said:

To me (me, me, me), STRs are zoning nightmares. My old house is in a large, private development that allows STRs, and my new house is in an un-gated private development that doesn’t allow anything shorter than a 6-month lease, both in a township that has very little regulation on STRs at the moment.

For me, me, me, it’s a personal ick. An income producing business that impacts neighbors in a residential zone is technically banned, but vaguely worded. Meanwhile, I tried to buy 16acres of commercial land but wasn’t allowed to live on it. How does that make sense?

 

It doesn't make sense.

Not only that but just adding multifamily without commercial will invariably create traffic congestion because people can't do a darn thing without a car if every single business must be far away in the "commercial zone" I can understand factories but why can't you have a coffee shop in the middle of a neighborhood. Wouldn't people want that? And then we cancel all home based businesses and require people to have space in two buildings when one would do and then say "there's no room" while we use up as much space as possible and mow down houses for more roads.  Zoning can be such a nightmare. If people are going to cling to zoning than at least try not to zone things as stupidly as possible.

Edited January 22 by frogger

[frogger]

I will add as a traveler with family, hotels are prohibitively expensive because I am required to get multiple rooms. Well, my children are mostly adults but back in the day when we traveled as a group. I do know people who simply didn't fess up to the number of people sleeping in a room but those of us rule followers, conscience about even unspoken lies had to pay for multiple rooms. 

[SKL]

5 hours ago, frogger said:

I will add as a traveler with family, hotels are prohibitively expensive because I am required to get multiple rooms. Well, my children are mostly adults but back in the day when we traveled as a group. I do know people who simply didn't fess up to the number of people sleeping in a room but those of us rule followers, conscience about even unspoken lies had to pay for multiple rooms. 

It's a tough one.  We have generally traveled as 5 people, including 2 kids.  Until recently, my kids could easily share one single bed, or all 3 of us could share a queen or king bed.  But there would be these silly rules.  I have no problem paying extra for the additional towels or whatever, but paying for a whole extra room....

Then there is the issue of the taxis ... it's practically impossible to find a taxi that holds more than 3 or 4 people in some cities.  But that's a whole other topic.  😛

[Bootsie]

I did a little bit of investigation of what it would take in my area to purchase a rental and provide affordable housing.  I can purchase a property for $200.000 to rent.  The median income in my area is about $33,000.  30% of that would be $9,900 I could charge and be within 30% of the median income.  The property taxes on the unit would be about $6,000 per year.  That would leave me $3,900 per year to cover other expenses (roofing, AC repair, fresh paint, etc.) and any profit.  Considering that I could put $200,000 in my savings account and earn 4% without risk or headaches and earn $8000 per year, I cannot see that it would be financially feasible to purchase and rent this property.  High property taxes are a barrier to providing affordable housing.

[KSera]

50 minutes ago, Bootsie said:

I did a little bit of investigation of what it would take in my area to purchase a rental and provide affordable housing.  I can purchase a property for $200.000 to rent.  The median income in my area is about $33,000.  30% of that would be $9,900 I could charge and be within 30% of the median income.  The property taxes on the unit would be about $6,000 per year.  That would leave me $3,900 per year to cover other expenses (roofing, AC repair, fresh paint, etc.) and any profit.  Considering that I could put $200,000 in my savings account and earn 4% without risk or headaches and earn $8000 per year, I cannot see that it would be financially feasible to purchase and rent this property.  High property taxes are a barrier to providing affordable housing.

I think this is harder to do on an individual level, though if someone has the money to invest, I expect in most real estate markets it would still turn out that’s quite a profitable investment over the longer-term. But by and large, it works out better for developers as there are tax advantages to developing affordable housing. It doesn’t even require the entire building to be affordable housing, but developer just needs to set aside a certain portion of the units in order to qualify for the tax incentives.

[Pam in CT]

For sure there's no one-size-fits-all-locations solution. The pros/cons balance for folks to consider moving to a particular place vary enormously, and the public policy issues within each particular place also vary enormously.

In my own general area (NYC exurbs, labor crunch in a state that has long had a state minimum well above the federal, with most jobs even in the service industry paying well above that minimum wage), the top pros of an individual or family moving to a particular town include jobs and quite good public schools; the major con is that you ab-so-freaking-lute-ly need one car per adult.  There are other pros (large houses and yards, great libraries, good municipal parks / trails / recreation, on train line to NYC though the trip is well over an hour so it's not easily commutable) and other cons (high COL, state income tax, very high property taxes that fund aforementioned schools); but the basic draw from an individual POV is jobs + schools. There's not a lot going on in our sleepy sweet bucolic scene that is terribly attractive to singles; and couples who work in the general area but don't have children are better off in one of the small cities with more restaurants and much-lower property taxes. So folks start to eye towns like mine when their eldest approaches kindergarten.

And often such young families do not yet need, and/or cannot yet afford, a honking 4+ BR house on 2+ acres for a zillion dollars. But that is how most of the town is zoned.  (We **literally** have two acre, single residence zoning in 90% of the land area of the town.)  Zoning changes that allowed smaller lots, smaller houses and/or multiple residence condos and/or multiple residence rental apartment buildings would enable more suitable housing for the population segment most eager to come here. And -- based on developer interest in the narrow 10% corridor that DOES currently allow for denser build -- I believe that in our case, if zoning allowed it developers would come.  ETA: to put it in market terms: there is a DEMAND for affordable housing here, but inadequate supply.

BUT.  Even aside from the very real if not altogether attractive NIMBY "retain the character of our town" political opposition to denser build, there are real infrastructure constraints. The town doesn't have public water lines or public sewers anywhere except the major artery road that cuts through town; all the schools and community buildings and senior housing and commercial buildings, along with the handful of existing condo complexes and rental buildings, ALL are clustered around that one artery. And there really ARE limits to how large a building can be sustained on septic and, particularly, private well.

So while at our state level there are calls, for example, to enact a state-level NIMBY override on municipal restrictions that would automatically allow families to rent out outbuildings and inlaw apartments  on their 2A lots -- which sounds so reasonable -- there really are reasonable infrastructure reasons why such zoning is in place.

 

There are other corners of the state, OTOH, where there are no jobs and the schools are lousy. In those places, there are many fewer reasons for folks to want to move TO them, and it's neither zoning nor the NIMBY that too often underpins zoning that is suppressing affordable housing. That's a different form of market failure -- it's not zoning or other interference that is impeding supply; there's just not much demand for folks to go there.

Edited January 22 by Pam in CT

[Bootsie]

53 minutes ago, KSera said:

I think this is harder to do on an individual level, though if someone has the money to invest, I expect in most real estate markets it would still turn out that’s quite a profitable investment over the longer-term. But by and large, it works out better for developers as there are tax advantages to developing affordable housing. It doesn’t even require the entire building to be affordable housing, but developer just needs to set aside a certain portion of the units in order to qualify for the tax incentives.

I have been looking in my area to see what types of property tax breaks there are for owners of property of affordable housing, and it isn't straightforward.  One of the issues is that the local government, school districts, and other taxing authorities would prefer for the property to be used in a way that will provide tax revenue for them.  

I did see that an affordable housing complex is being built in my area with some special funding--90% of the complex is one-bedroom, 7% is two-bedroom, and 3% is market-rate one bedroom units.  The cost per unit for construction is $190,000; this seems pricey given that there are a number of 3-bedroom homes for sell for about $200,0000 here.  

[Heartstrings]

2 hours ago, Bootsie said:

I did a little bit of investigation of what it would take in my area to purchase a rental and provide affordable housing.  I can purchase a property for $200.000 to rent.  The median income in my area is about $33,000.  30% of that would be $9,900 I could charge and be within 30% of the median income.  The property taxes on the unit would be about $6,000 per year.  That would leave me $3,900 per year to cover other expenses (roofing, AC repair, fresh paint, etc.) and any profit.  Considering that I could put $200,000 in my savings account and earn 4% without risk or headaches and earn $8000 per year, I cannot see that it would be financially feasible to purchase and rent this property.  High property taxes are a barrier to providing affordable housing.

That’s a very good point.  Where I am those taxes would closer to $2500-$3000.  Much more feasible. 

[KSera]

1 hour ago, Bootsie said:

I have been looking in my area to see what types of property tax breaks there are for owners of property of affordable housing, and it isn't straightforward.  One of the issues is that the local government, school districts, and other taxing authorities would prefer for the property to be used in a way that will provide tax revenue for them. 

The tax incentives I'm familiar with are from the federal government via HUD https://www.taxpolicycenter.org/briefing-book/what-low-income-housing-tax-credit-and-how-does-it-work

Actually, now I'm seeing a current story from today on this: Affordable Housing Gets Boost in Congressional Tax Reform Proposal

[Melissa in Australia]

10 hours ago, Bootsie said:

I did a little bit of investigation of what it would take in my area to purchase a rental and provide affordable housing.  I can purchase a property for $200.000 to rent.  The median income in my area is about $33,000.  30% of that would be $9,900 I could charge and be within 30% of the median income.  The property taxes on the unit would be about $6,000 per year.  That would leave me $3,900 per year to cover other expenses (roofing, AC repair, fresh paint, etc.) and any profit.  Considering that I could put $200,000 in my savings account and earn 4% without risk or headaches and earn $8000 per year, I cannot see that it would be financially feasible to purchase and rent this property.  High property taxes are a barrier to providing affordable housing.

We have done this. Bought a cheep older house to rent. It is one of the lowest rents in the town. After paying property and water  rates. Out total income is $5000. Then because DH is on a disability pension he gets his pension docked because he has an income. So that is reduced to $ 3000. Income from the rental. It has been ok- ish . Until the current tennents. They backed a ute into the fence, breaking the concrete post. DH had to fix it. A few hundred dollars .

They signed an agreement when they went into the house that they would keep their one dog outside. It is a fenced yard and has open shedding for the dog. They decided afterwards that they would get more dogs and currently have 5 very large dogs inside. They rang us the other week to say all the carpets are ruined and could we pull them up and maybe put down hardwood flooring 🤣( hysterically laughing) as if we could do that while they were living there. As soon as their lease expires they will be homeless. No way do we want to have such destructive tennents. We can't afford it

Edited January 23 by Melissa in Australia

[Bootsie]

8 minutes ago, KSera said:

The tax incentives I'm familiar with are from the federal government via HUD https://www.taxpolicycenter.org/briefing-book/what-low-income-housing-tax-credit-and-how-does-it-work

Actually, now I'm seeing a current story from today on this: Affordable Housing Gets Boost in Congressional Tax Reform Proposal

This tax credit is actually being used by a wealthy developer in financing the project in my area that I mentioned.  This lowers the federal income tax this developer would have to pay, but it does not eliminate the property taxes owed on property.  

[KSera]

1 minute ago, Bootsie said:

This tax credit is actually being used by a wealthy developer in financing the project in my area that I mentioned.  This lowers the federal income tax this developer would have to pay, but it does not eliminate the property taxes owed on property.  

Right. I should have clarified it's not a property tax exemption or reduction. That's why I was saying it works better for a developer and not so much on an individual level (though my understanding is there's some way that developers can sell these credits and they can indeed be used for single family housing.

[Melissa in Australia]

The state government here purchases some houses in new developments for "affordable housing"  sounds good in theory but in reality -- humans

While I was in hospital the lady in the bed beside me was telling me about the apartment she lives in. She bought into a small apartment block, 4 stories high with mostly single middle aged women. It was marketed to that group. It is new,  3 years old. 2 of the apartments were bought by the department of human services as affordable housing. She said one was let to a man that turned the apartment into a meth lab. It was a dramatic story of when it was busted. And she said the apartment was pretty damaged 

The other apartment was let to a person who worked from home. Sounded great until they all found out that she was a prostitute and bringing her clients home all hours of the night.

So people like the idea of having affordable housing for homeless but don't really want to be living right beside  them

[scholastica]

Article in NYT about housing costs in NY. 

[prairiewindmomma]

Acreage goes for about $1,000,000/acre here. The only feasible solution for affordable housing, imo, is density. Our zoning laws have been changed to allow infill, and currently as there are NO open lots in my city, what land that is being opened is being opened for apartments. Nearly every new unit being opened is an apartment. I would LOVE to see condos being built > apartments so that people have a chance to rate lock and to build equity. 

[Carol in Cal.]

I have been impressed with the Habitat for Humanity projects locally.

[Carrie12345]

So many points I want to quote, but it’s too much, lol.

The issue does need to be separated into “affordable” housing (if that’s 30% full-time workers) and “low income” housing (if that’s serious poverty/otherwise unhoused) in order to address from multiple angles/root causes.

I don’t think (?) anyone believes that every individual small town has to have bungalows and giant apartment buildings or million dollar homes for $700/mo, so that can be scratched. But we do have to look at how we got here in order to look ahead, or any proposed solution will fail eventually.

It would help to have more landlords accepting section 8, or whatever programs apply locally. And expand them.

It would help to build more government housing AND RUN IT APPROPRIATELY.

It would help to have incentives similar to how the suburbs were created. Revisit the many YouTube’s on that.

But none of these things are sustainable if we don’t address inflation on all fronts, wage stagnation (or drop, with inflation), and overall greed. And then there are, of course, the social issues of isms, addictions, education, mental health, judgment, etc.

If 2025’s rent or mortgage of $2,000 (just for an easy number) is 2035’s $3,500, we’re right back to square one. If we keep building a society of sick people, none of it even matters.

[Pam in CT]

re housing isn't a single "good" in the sense that microeconomic theory postulates

3 hours ago, Carrie12345 said:

So many points I want to quote, but it’s too much, lol.

The issue does need to be separated into “affordable” housing (if that’s 30% full-time workers) and “low income” housing (if that’s serious poverty/otherwise unhoused) in order to address from multiple angles/root causes.

I don’t think (?) anyone believes that every individual small town has to have bungalows and giant apartment buildings or million dollar homes for $700/mo, so that can be scratched. But we do have to look at how we got here in order to look ahead, or any proposed solution will fail eventually.

It would help to have more landlords accepting section 8, or whatever programs apply locally. And expand them.

It would help to build more government housing AND RUN IT APPROPRIATELY.

It would help to have incentives similar to how the suburbs were created. Revisit the many YouTube’s on that.

But none of these things are sustainable if we don’t address inflation on all fronts, wage stagnation (or drop, with inflation), and overall greed. And then there are, of course, the social issues of isms, addictions, education, mental health, judgment, etc.

If 2025’s rent or mortgage of $2,000 (just for an easy number) is 2035’s $3,500, we’re right back to square one. If we keep building a society of sick people, none of it even matters.

Right.  There really isn't a single "good" called "housing" that can be evaluated in normal supply and demand terms.

Not only is the housing sector the **definition** of what economists call "sticky" demand and supply curves-- there are HUGE financial and other costs to simply swapping from one "housing" to another, that isn't the case for really any other "good" (as well as huge upfront capital costs and other "barriers to entry" on the housing supply side) -- but where people live is inextricably bound to a huge number of critically important other "goods."  The proximity to schools, the quality of those schools, the proximity to employment, the type of employment, the salary/wages of that employment, the tax structure not merely on housing itself but on also on income etc, the overall cost of living in different areas, the availability (or not) of public transportation or train lines to city employment hubs.  For some individuals/families, the proximity to health care or even specific medical specialists are determinative of where they can live. Other individuals/ families housing options are limited by their need to be close to particular sector centers (high tech, finance, biotech, aerospace) or military bases or other clusters. Doctors -- (particularly OB/GYNs  even before Dobbs, immensely more so now)-- have to consider what economists refer to as "externalities" like insurance costs and litigation risks in determining where they establish practice. And on and on.

People don't need "housing" in a vacuum; they need a LIFE THAT WORKS, and housing is one **but not the only** essential part of what really is a sequence of moving interconnected parts.  Not individual one-off "goods" that can be addressed separately.

 

Even today there are parts of the country where COL is low and housing costs are low and taxes are low compared to places like mine.   But unless there are stable jobs and good schools and access to reasonable medical care and ~~a life that works~~ people can't just pick up and move there. 

(Otherwise immigrants like my English and civics students -- who are well past other "sticky" reasons why moving is hard -- would.)

[Arcadia]

On 1/19/2024 at 10:55 AM, Mrs Tiggywinkle Again said:

30% seems huge to me, like I can’t imagine it.  Is that an actual liveable amount or just what the government considers, and is not really accurate for everyday people trying to make ends meet.

I just sat down and figured it out; our mortgage is 8.6% of our grossly monthly income.  We put over 30% right now in retirement and other savings, so that does bring down our net, but I can’t imagine paying more in mortgage and still have money leftover for life things.  

 

On 1/19/2024 at 7:39 PM, Frances said:

I don’t think most people paying 30% or more of their income for housing are putting much if anything towards savings or retirement.

When my husband was earning $79k pre tax in 2006, our mortgage was $32.4k, so about 41%. Take home pay was about $2k biweekly. He maxed out the 401k employer matching and we put a few hundreds into emergency savings every month. Fun money was the birthday money I get from my parents every year. Year end performance bonus was a few thousand and that went into emergency savings. 

On 1/19/2024 at 8:43 PM, Melissa in Australia said:

Here retirement, or superannuation is paid by employers. A percentage of weekly income 

People paying 50%  or so of income on rent aren't living the high life of holidays involving flying, going on cruises or things like that. At least the ones I know personally aren't. 

Here and in my country of origin, retirement is “contributed” by employer and employee. At my COO, it’s compulsory at the national level (CPF) while here my husband can opt out (401k). We were building up emergency savings in case of retrenchments so our family vacations (low cost road trips) were all paid for by my parents. 

[Arcadia]

My neighbor bought homes in cities that are more affordable to rent out and he says they are approved as section 8 housing. He is the kind of landlord that doesn’t increase rents so his tenants tend to stay until they buy their own homes or they are relocated elsewhere. So maybe increasing the number of section 8 housing would help as a partial solution.  
The majority of new developments in my region are rental apartments and the rents are high. The rents are still lower than a mortgage (plus property tax and HOA) for a similar size condo. 20% of apartment rental units are affordable housing units 

Below pics are from an apartment complex in a nearby city that publish the info for 2021

[KSera]

7 minutes ago, Arcadia said:

Below pics are from an apartment complex in a nearby city that publish the info for 2021

More Section 8 housing and vouchers would definitely help. Your chart above illustrates how hard it is for people at the lower end of the income scale, even when they are working full time. Using the 1 bedroom low income rent example, a landlord can charge up to $1512 per month. Many landlords will require proof of income being at least 3 times rent, which in this case means $4536 per month. This would be $54,432 per year. That basically means those one bedroom low income units are available only to those households making $54,000-$64,000 per year. Our experience in trying to help a low income young adult find housing is that most rentals either didn't allow a cosigner or they would take the cosigner's income into account for income qualification as well, meaning the young person no longer qualified for low income housing if they had someone willing to cosign with them due to not making enough to meet the salary>3 times rent requirement. Even though that cosigner's income doesn't belong to the young adult at all. Very, very frustrating.

[Arcadia]

14 minutes ago, KSera said:

More Section 8 housing and vouchers would definitely help. Your chart above illustrates how hard it is for people at the lower end of the income scale, even when they are working full time. Using the 1 bedroom low income rent example, a landlord can charge up to $1512 per month. Many landlords will require proof of income being at least 3 times rent, which in this case means $4536 per month. This would be $54,432 per year.

Here, 1 bedroom units are typically three adults sharing. Minimum wage is $17.60 here. So two adults would be able to share a 1 bedroom unit. The example rental complex I posted has washer and dryer in every unit. The median household income for that zip code is $182,920.

[KSera]

1 hour ago, Arcadia said:

The median household income for that zip code is $182,920

Which makes it even harder for those who are down at the low end. When the median income is that high, there is less affordable housing and a lot more people in that in between, moderate income zone that can afford the affordable units that are available.

It’s definitely a lot more workable when someone is able to have multiple adults who can all work full time sharing a rental. Unfortunately that’s not doable for every person.

[KSera]

double post

Edited January 24 by KSera

[Bootsie]

Housing prices have risen significantly more than median household income in the US in the past two decades.   What is driving that?  The increase in housing prices is correlates with the rapid increases in the money supply, especially in the past 4 years.  The rapid growth in the money supply results in inflation, which is being seen in housing prices.  Tackling increased housing prices, means tackling inflation, which means tackling the rate of growth of the money supply.  

 

[Arcadia]

32 minutes ago, KSera said:

Which makes it even harder for those who are down at the low end. When the median income is that high, there is less affordable housing and a lot more people in that in between, moderate income zone that can afford the affordable units that are available.

It’s definitely a lot more workable when someone is able to have multiple adults who can all work full time sharing a rental. Unfortunately that’s not doable for every person.

I do understand. My immediate area is more of a high density residential area with regards to rental apartments and the expectation is that singles would have roommates. It is also common for two couples to share a 2 master bedrooms unit because it’s cheaper than renting a one bedroom unit. 
 

Do you think it is worse in a college town where the college is not a commuter college? DS19’s college zip code has a median income of $91,551 ± $471 (US Census). His dorm fee is about $1.3k per month for a bedroom in an on campus 4 bed 2 bath unit. For off campus 4 bed 2 bath unit managed by the college, it is about $1k per month. Supply of dorm rooms are less than demand though it is not as bad as some other college towns we know. 

[Heartstrings]

52 minutes ago, Bootsie said:

Housing prices have risen significantly more than median household income in the US in the past two decades.   What is driving that?  The increase in housing prices is correlates with the rapid increases in the money supply, especially in the past 4 years.  The rapid growth in the money supply results in inflation, which is being seen in housing prices.  Tackling increased housing prices, means tackling inflation, which means tackling the rate of growth of the money supply.  

 

That sharp jump during 2020 makes me think a big driver is people wanting to rearrange living conditions after the pandemic.  The growth in homeschooling and work from home might be driving a desire for larger homes, as might college age kids staying at home longer, if there’s truth to the increase in divorces after 2020 then that’s a lot of people needing to set up new households.  It seems like homesteading has increased in popularity which might mean people are buying houses with more land. 

A lot of corporations like Zillow were buying up houses during 2020, often outbidding individuals significantly which also contributed to price increase by driving up comps as well as rents.

Inflation has slowed in recent months so that seems to be sorting itself out.  Other countries are having higher inflation than we are, I wonder if their housing costs are going up too?  

 

House prices were trending up prior to 2020 and the inflation we have now, that probably shows all if the underlying issues we’ve discussed such as lack of building in general, etc.

Edited January 24 by Heartstrings

[Arcadia]

3 hours ago, Heartstrings said:

Other countries are having higher inflation than we are, I wonder if their housing costs are going up too?  

Housing costs are going up too in my country of origin, including the government subsidized housing that about 80% of the population lives in. Its always ranked as the top few most expensive country to live in though. 

[Heartstrings]

48 minutes ago, Arcadia said:

Housing costs are going up too in my country of origin, including the government subsidized housing that about 80% of the population lives in. Its always ranked as the top few most expensive country to live in though. 

Thank you!  I always like to know whats going on in other countries to see if something is unique to the US.  Generally if it's unique to us I figure our governmental policies are to blame but if it's also happening in other countries then it has to be something broader. 

[Arcadia]

6 minutes ago, Heartstrings said:

Generally if it's unique to us I figure our governmental policies are to blame but if it's also happening in other countries then it has to be something broader. 

For my country of origin, the dynamics are probably similar. People want to sell high because many are doing sell to cover for their next home purchase. The real estate agents like my cousin are all too happy to drive home prices up as he is on commission. Demand also outstrips supply because the government is building subsidized housing slowly to keep their cost low and to not saturate the property market. If housing prices plateau or dip, that would affect the property tax coffers.