So, if we get the Hauk properties, the next question we have to face is what would we build on 8 acres of land once we tear down the 9 Hauk buildings plus 2 more buildings the City owns? Conventional wisdom is that we should create owner-occupied affordable housing (i.e. ownership, not rental). The reason for this is that people believe that homeowners somehow have a greater stake in the neighborhood. When you ask questions about if the ownership opportunities will be affordable to people who currently live in Allied Drive, the answers are kind of interesting.
A popular answer is, “You’d be surprised, some people in the Allied Drive area make $50,000!”. Let’s pretend that true and try thinking this through. In order for a family of 4 to make $51,240, 2 adults would need to work full time and make $12.31 per hour. This is 70% of the Area Median Income for that family of four. Under IZ, that would be a three bedroom home at $157, 807 or a condo that is even less expensive because you have to factor in the condo fee. (Problem is, with IZ we used a fictional 4.5 person household to arrive at the number, so the actual amount that a family could afford would have to be less than that.)
Another answer is, “well the Ellefson’s were able to build houses for $165,000 and they’re a private builder”. However, they forget to mention that the Ellefson project got several hundred thousand dollars from CDBG. Furthermore, those are starting prices. Some of the “affordable” homes have sold for over $200,000. Clearly not affordable to a family making $50,000.
Clearly, creating affordable ownership housing isn’t going to be easy. It can’t be the only answer. We need to create affordable rental housing as well. Perhaps using a “rent-to-own” type program like we have with the Urban League or Commonwealth Development can be part of the solution.
Finally, I don’t want to see us repeat what we did on Broadway-Simpson. There, we sold condos to families at a reasonable price, $105,000 – $115,000. Problem is, a few years later, those homes are no longer affordable. Some homeowners were able to sell those condos for $200,000 and make over $100,000 in less than 5 years. (Don’t get me wrong, I believe they should share in the equity, but I don’t believe they should get a windfall.) I don’t want us to see us invest money into homes for affordable housing, and then watch the affordability disappear, leaving us to invest in affordable housing . . . again! Sounds like a stupid investment to me.
Given the above, what is going to work for Allied Drive? I’m sure I don’t have all the answers, but I do know a few things.
a) If we invest alot of money into Allied Drive to create affordable housing, that housing should stay affordable for future families.
b) If we’re going to build over 1oo units, there are not that many families in Allied Drive that can afford to buy these homes, so we need to create rental opportunities for the people who currently live there.
c) When families are displaced, we need to make sure we provide adequate relocation services and funds.
Then, we have some other issues we need to deal with like what happens to the non-profits that are currently in the buildings we are tearing down . . .
