This week, we ran a three-part series on what we mean by “housing affordability.”
1. In The way we measure housing affordability is broken, Daniel Kay Hertz writes about the problems with the most common way “affordable housing” is interpreted: as housing costs that make up no more than 30% of household income. Three major problems include a) equity issues, because lower-income households may be less able to spend 30% of their income on housing than higher-income households; b) a failure to include other place-based costs, like transportation; and c) a failure to consider the quality of housing purchased – including the characteristics of the surrounding neighborhood.
2. In Residual income: a better way of measuring affordability, we suggest an alternative to the 30% ratio. The “residual income” approach, championed by University of Massachusetts – Boston professor Michael Stone, suggests that a household’s “housing budget” should be determined by subtracting their other necessary expenses from their income. We like this method because it takes a “capabilities approach” – it asks what we want people to be able to do, like be able to buy healthy food or work-appropriate clothing, and then builds an affordability standard around that level of quality of life.
3. Finally, we ask: What about homeowners? It turns out that owner-occupied housing creates some complications for “affordability” that rental housing doesn’t. In particular, when people buy rather than rent, they’re getting two kinds of goods: shelter and an investment vehicle. That suggests that we need to make some adjustments when we apply affordability questions to homeownership.
The week’s must reads
1. This week, Politico released a special issue on America’s transportation problems. The entire thing is worth reading, but we would highlight “Overpasses: A love story,” which zooms in to Wisconsin to examine how departments of transportation prioritize massive, incredibly expensive new highway projects over maintenance of existing infrastructure, or more efficient transit.
2. Sticking with transportation, the New York Times‘ architecture critic Michael Kimmelman reviews the city’s experience with its enhanced bus routes, called Select Bus Service, and declares the initiative a success. SBS generally involves some combination of bus lanes, off-board fare collection, and more widely-spaced stops – which can all be bought for pennies on the dollar of a major urban rail (or, for that matter, highway) project. SBS routes have seen faster service and increased ridership, but Mayor Bill de Blasio has been slow to expand them across the city.
3. While Marietta, Georgia is tearing down low-income housing in a rerun of the bad old days of urban renewal, Colorado is moving in the opposite direction. The Denver Post covers how municipalities across that state are questioning the powers given to redevelopment authorities, including eminent domain. Littleton has already passed a referendum reining in its RDA; a similar measure is on the ballot in Wheat Ridge this fall.
New knowledge
1. San Jose State University’s Mineta Transportation Institute released a report looking at transit from a cost-benefit perspective. Among the findings: the benefits of transit projects can vastly exceed costs in small towns, not just large cities; transit can pay for itself in congestion relief in medium-sized and large cities; and many cost-benefit analyses understate the benefits of transit from increased safety and fewer car crashes.
3. In CityLab, Richard Florida writes about a new study on the link between public transit and gentrification in New York City. While transit-accessible neighborhoods tend to be wealthier than those with less access, the study did not find a strong link between transit access and change in average neighborhood income – suggesting that the connection between transit service and gentrification is less robust than is sometimes argued.
The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.
Our goal is to help you keep up with – and participate in – the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.
If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.
The Week Observed: July 24, 2015
What City Observatory did this week
This week, we ran a three-part series on what we mean by “housing affordability.”
1. In The way we measure housing affordability is broken, Daniel Kay Hertz writes about the problems with the most common way “affordable housing” is interpreted: as housing costs that make up no more than 30% of household income. Three major problems include a) equity issues, because lower-income households may be less able to spend 30% of their income on housing than higher-income households; b) a failure to include other place-based costs, like transportation; and c) a failure to consider the quality of housing purchased – including the characteristics of the surrounding neighborhood.
2. In Residual income: a better way of measuring affordability, we suggest an alternative to the 30% ratio. The “residual income” approach, championed by University of Massachusetts – Boston professor Michael Stone, suggests that a household’s “housing budget” should be determined by subtracting their other necessary expenses from their income. We like this method because it takes a “capabilities approach” – it asks what we want people to be able to do, like be able to buy healthy food or work-appropriate clothing, and then builds an affordability standard around that level of quality of life.
3. Finally, we ask: What about homeowners? It turns out that owner-occupied housing creates some complications for “affordability” that rental housing doesn’t. In particular, when people buy rather than rent, they’re getting two kinds of goods: shelter and an investment vehicle. That suggests that we need to make some adjustments when we apply affordability questions to homeownership.
The week’s must reads
1. This week, Politico released a special issue on America’s transportation problems. The entire thing is worth reading, but we would highlight “Overpasses: A love story,” which zooms in to Wisconsin to examine how departments of transportation prioritize massive, incredibly expensive new highway projects over maintenance of existing infrastructure, or more efficient transit.
2. Sticking with transportation, the New York Times‘ architecture critic Michael Kimmelman reviews the city’s experience with its enhanced bus routes, called Select Bus Service, and declares the initiative a success. SBS generally involves some combination of bus lanes, off-board fare collection, and more widely-spaced stops – which can all be bought for pennies on the dollar of a major urban rail (or, for that matter, highway) project. SBS routes have seen faster service and increased ridership, but Mayor Bill de Blasio has been slow to expand them across the city.
3. While Marietta, Georgia is tearing down low-income housing in a rerun of the bad old days of urban renewal, Colorado is moving in the opposite direction. The Denver Post covers how municipalities across that state are questioning the powers given to redevelopment authorities, including eminent domain. Littleton has already passed a referendum reining in its RDA; a similar measure is on the ballot in Wheat Ridge this fall.
New knowledge
1. San Jose State University’s Mineta Transportation Institute released a report looking at transit from a cost-benefit perspective. Among the findings: the benefits of transit projects can vastly exceed costs in small towns, not just large cities; transit can pay for itself in congestion relief in medium-sized and large cities; and many cost-benefit analyses understate the benefits of transit from increased safety and fewer car crashes.
2. Researchers from the University of Kansas find that project-based affordable housing does not improve “neighborhood quality” for residents, compared to voucher-based housing subsidies, and can actually make things worse. They consider the implications for federal and local housing policy.
3. In CityLab, Richard Florida writes about a new study on the link between public transit and gentrification in New York City. While transit-accessible neighborhoods tend to be wealthier than those with less access, the study did not find a strong link between transit access and change in average neighborhood income – suggesting that the connection between transit service and gentrification is less robust than is sometimes argued.
The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.
Our goal is to help you keep up with – and participate in – the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.
If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.
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