Full disclosure: I feel the Bern, especially when I drink too much instant coffee (who can afford beans anymore?). But I am also a Millennial concerned with income inequality, retirement security for our seniors and climate change, three problems that all surprisingly intersect on an issue that Bernie Sanders and Hillary Clinton have both completely ignored in the campaign so far: Housing.
Here are several of the major housing problems that policymakers must deal with simultaneously:
- Providing housing in ‘location efficient‘ communities where residents can save money by walking, biking and taking transit (or at least driving shorter distances because locations are closer).
- Assisting boomers who are “aging in place” in homes too big for an empty-nest couple, but who cannot afford assisted living.
- Assisting Millennials who are renting longer for a variety of reasons and as such are driving up rents in major cities.
- Building “up” not “out,” or reducing urban sprawl to protect air and water quality.
- And doing all of the above without triggering displacement.
The policy I propose can assist in making a dent in all of these problems simultaneously. It can help address these issues without triggering NIMBY (Not In My Backyard) fears about high density development invading neighborhoods, too.
So Here’s The Humble Proposal:
A a grant program which funds home owners to add second units (often called “grandma flats”), or to split their single family homes into duplexes, or to add stories to existing low-density buildings, taking advantage of innovations in ‘stackable’ manufactured multi-family housing. In exchange, the newly produced units would be rented at affordable rates. The rental income would be split between the home owners and the government (to help pay off the cost of construction). Once construction costs were fully paid off, home owners would start receiving the full rental income.
This program would only be available to home owners who were:
- Seniors or about to be seniors, or
- Underwater on their mortgage, or
- Low or moderate income, or
- Long term residents of a neighborhood being gentrified, or
- Living in a neighborhood where the average renter is rent burdened as the Department of Housing and Urban Development defines it.
Sound like a funny idea? If you’ve walked through parts of San Francisco, then you’ve walked through a community where this has already happened naturally without government support. Many of the city’s large Victorians have been converted into multi-units rentals, have added stories or second units–all while keeping that historic charm and low-density feel NIMBYs love so much.
The Winners: Seniors, Struggling Home Owners, Areas at Risk of Gentrification, Renters, The Environment
This policy could provide aging boomers additional rental income as they age-in-place. It gives Millennials affordable rental housing, and can increase affordable rental housing in transit-rich neighborhoods (ticking off the environmental box). It could also help under-water home owners living in areas where the rental market is too hot. Richmond, CA, has a significant number of underwater homes. It’s proximity to San Francisco via transit could mean a rapid gentrification of the community. This program could help those home owners find new rental income, while creating space for newcomers: a form of development without displacement, creating wealth for existing residents instead of pushing them out.
Academics have suggested backyard units offer great potential in some of most impacted places, like the San Francisco Bay Area. In-law units cost between $75,000 to $200,000 a piece, much lower than conventional affordable housing. There are no numbers on the cost of converting single family units to duplexes, and I haven’t seen much. The program could come with a $15,000 bonus for neighborhood improvements for every unit added by such innovations to help overcome that ever-present NIMBY impulse.
How is this better than existing affordable housing programs?
In the Low Income Housing Tax Credit (LIHTC) program, private developers and their investors (usually banks or investment firms) all take a cut while providing affordable housing. There’s nothing terribly wrong with that. But in my proposal, the people ‘taking a cut’ are also people in need of support: home owners who are also struggling or at risk of struggling for reason or another.
This idea may seem unconventional, but is by no means new. It’s time to get unconventional in approach to creating affordable communities anyways, because the status quo simply isn’t working and increasingly, the rent is too damn high!