What does it mean to provide affordable housing to a community?

The National Association of Realtors (NAR) got together with Realtor.com to explore current housing trends as they relate to affordability. Not surprisingly, with low inventory and high home prices, the results were fairly bleak. I would love to see the cross tabs and the full breakout for the study; unfortunately they weren’t made available to the general public. The researchers surveyed the largest 100 metro areas in the US which includes a couple of spots in the Bay Area 🌉(SF & San Jose).

Ironically, as they took a look at these areas, “affordability” increased in both San Francisco and San Jose. Of course, they were only looking at affordability in a specific price range. Call me jaded, but I’m certain that the affordability of homes in either city didn’t increase for someone making less than $100k…

And so we come to affordability vs. “affordability.”

Affordability is complex – as is solving it. The Department of Housing and Urban Development defines affordable housing as:

Affordable housing is generally defined as housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities.


That’s 30% gross…here’s the problem with that definition. A couple in California that files jointly and makes $100,000 between them has a 30% tax rate (Federal + State). That means they’re only taking home $70,000 per year, or approximately $5,833.33 per month. Using HUD’s formula, this couple shouldn’t pay more than $2,500 per month in rent and utilities for the apartment they’re looking for to be affordable. The smallest floor plan at the Canyon Ridge Apartments is 1 bed, 1 bath, 792±sf, and rent starts at $2,481…starts at almost $2,500. Yes, water and garbage may be built in, but what about WiFi (an essential utility these days) and electricity? 💰 starts to add up.

Vox wrote an excellent article on affordable housing back in 2015, but it stands up today. Affordable housing is relative and the definitions don’t necessarily work across demographics, even within the same metro area. Which is why the latest NAR/Realtor.com study cited above, can say (without apparent sense of irony) that San Francisco became more affordable over the past couple of years.

No Easy Answers

Simple, maybe, but not easy (there’s that tension between the two, again!). The simple answer is to increase available supply of homes and let everyone earn a living wage where they can afford to live and save up to afford to buy a home. Of course, this solution is not easy.

There are complex zoning laws (which I found out when making an inquiry to the city about what constitutes a multi-unit property). There is the obvious tension between unfettered development and the legitimate need to keep some open space. Both Napa and Solano counties are largely rural. Do we really need to build out every vacant parcel in both counties? That being said, why does Napa County (and its cities that aren’t AmCan) make it so much more difficult than Solano County to build new construction??! And then let’s not even talk about smaller, wealthy municipalities who refuse to consider infill, mix-used projects. There has to be a middle ground. It’s time for everyone to share.

Now, I’m not advocating for a complete redistribution of wealth, but something’s gotta give. White households are more than twice as likely to afford to buy a home than a black household. 35% of white families earn $100,000 or more while only 20% of black families earn $100,000 or more (Latino families are only marginally better at 25%).

Because it’s Black History Month, most of the real estate blogs that I pay attention to are giving token attention to the ridiculously stupid home ownership gap between white families and just about everyone else. Keeping Current Matters (KCM) who, generally speaking, I love, wrote an insipid piece a couple of days ago about how homeownership is “steeper” for some Americans than others. Their bottom line (aka Call to Action) was the kicker: things are getting better and call me because I can be an advocate for you. How can I be an effective advocate if the entire system is built against you?

And the fact is, they aren’t getting better. At least not empirically…or anecdotally, for that matter. White home ownership hovers around 70%. Black homeownership is right around 40%. This has been true since the 1960’s!!! This is no longer just about affordable housing. There’s an institutional bias against families of color. It’s as if there is a mission to keep homeownership among a few privileged individuals – and now we can add institutional investors.

The whole system is rigged. The problem is that we only talk about this once or twice a year (April is Fair Housing Month so…yeah). There are rarely concrete policy proposals that make it to the light of day. That certainly needs to change. It is incumbent upon local governments to require more than payment of a nexus fee that goes towards affordable housing. Local governments (starting with the Planning Commissions) need to start looking at providing significant tax breaks to organizations and companies that build out affordable housing. They need to start holding developers’ feet to the fire and not allow them to waive money at affordable housing rather than building it. And governments, Federal, State, and Local, all need to start figuring out how to make substantive policy changes so that when we talk about homeownership, everybody has an equal say in the conversation.

So, going back to the KCM article that got me all fired up to begin with, today. Can I be an advocate? I was wrong…yes, I can absolutely be an advocate: on a local level to ensure that housing policies put in place benefit everyone, and not just a few. I can be an advocate to make sure that developers build out affordable housing, and don’t just throw 💸 at the situation. I can demand more from my local leaders and city staff. In short, I can be an ally.

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