Housing Prices

[Cotuit]

when i say affordable, I mean something that an average middle class citizen can buy.. maybe 150k condos or apartments that are priced a bit cheaper that Westminsterlofts.

Is "affordable housing" usually aimed at welfare and lower class citizens??? I have no clue

Yes, "affordable housing" is usually aimed at the lowest of the low income earners. There's a big gap in the ability of lower-middle class people to afford housing, and there is a derth of programs to help these people.

If a developer could make money selling 150K units in a high-rise, they would be breaking ground tomorrow.

If Providence wasn't so desperate for development and tax dollars right now, OneTen would have gotten it's height through incentives, such as an affordable set aside, instead we are in a situtation where the city just said "go ahead, build higher." Hopefully in the next round of development the city will be more in a position to make demands for things like affordability. Developers want to get to 30 stories to take advantage of the views afforded by that height and to reap the economic benefits of those views. It will be nice when the city can say, "fine, go to 30 stories, but make 1-10 affordable.

Last I'm gonna say as we are way off track and quickly getting to the point where cotuit will feel the need to lock it down. PM me if you want to continue the discussion.

I'm nowhere near that point. I trust everyone here can have a discussion as the grown ups we all are (except Mikey, he's too little )

[DaveRPI]

brick, i tried to only quote one line, not the whole paragraph

i only refuted that ONLY non-profits build affordable housing

i was in such a fit after that i didnt even read the rest...

to everyone else, there are SOOOOOOO many variables/factors that affect real estate, its hard to pin-point one reason for anything the companies choose to do. there are usually a few reasons for everything that happens as well, which many of you probably already know, so I'll just stop and get back to work and be productive

peace

i'm outta here

[Airwaves]

110 will cater to the wealthy and they're still going to have a hard time making the numbers work. There's no way she's a profitable project right now and as they actully break ground with a contractor WITHOUT a guarenteed maximum price - it's only going to get worst. They need to actually raise the prices of those units to realize a viable return on their investment - not the other way around. Remember the market there too - the building prides itself on exclusivity and so do the people buying the condos. You cannot have 10% affordable housing as part of the mix. That happens only when developers get huge deals from a city to make the project happen (tax incentives..) - the city forces it on them. Even then - the developer may have to change the rules. Look at Ratner's mega-project in Brooklyn - he has completely gone against all his promises from the beginning (affordable housing, commercial uses, public parks) - all because of (you've said it) cost-benefit-analysis. The developer has to make sense of the thing somehow. There are a lot of developers who do extremely well sticking to affordable housing. In fact - lenders in this very area are all saying the same thing. They don't want a developer to bring them any luxury condo projects - they won't look at it. They see a real money-maker in affordable housing. This is Providence - not Tokyo - don't mix the two.

Also - "Providence is the sixth most densly populated city in the U.S" - Huh?

[eltron]

Wow.

There is a ton of misinformation being thrown around this thread lately. Unfortunately I don't have too much time to participate fully, but I'll offer a couple of points:

Affordable housing is not for poor people. While the lower wage earners certainly benefit, affordable housing is generally defined as being affordable to someone who earns less than 80% of the area median income. In Providence, thats about $45,000. I don't know about you, but I know lots of people that earn less than that, teachers, firemen, even the dreaded Young Urban Professional set...in some cities, like Boston and New York where the market is really crazy, affordable is defined as less than 120% of area median! Now within this there is a large range, with a good amount of work for those at the lower end of the scale, but to say that affordable housing is for only those folks is just plain wrong.

Now, with the right tool, like inclusionary zoning, you can get some of those more affordable units in One Ten Westminster. Say 30 of the 150. There ya go, 30 affordable units IN A GLEAMING TOWER, downtown, good views, yadda yadda. This happens in other places folks.

So how do you decide who gets those lower priced units? Well, you must be qualified, and provide all sorts of documentation to prove it. Then most likely, there are more of you than there are units. So you hold a lottery, and some lucky people get a unit. Very simple. Not perfect, but fairly equitable.

And to prevent the greedy guy who wants to buy his way into a unit as was proposed earlier, its just not possible because of all of the various legal restrictions and monitoring that goes along with those units, for a minimum of 30 years, if not 99 years.

So thats it in a nutshell. Lots and lots more to discuss there, and this is the very simple version, but I hope it answers some of the questions coming up here...

[DaveRPI]

actually the percentage of the area median income differs depending on which state you're in, 60% or less of the median income is actually more accurate for LIHTC purposes [low income housing tax credit]

[eltron]

actually the percentage of the area median income differs depending on which state you're in, 60% or less of the median income is actually more accurate for LIHTC purposes [low income housing tax credit]

very true, but the LIHTC is but one source.

for HOME funds, its up to 80%, for some RI NOP funds, its up to 100% of area median. Then, if we are talking inclusionary units, which might not necessarily have any subsidy source, the number is most definitely set by the municipality.

all sorts of options for all sorts of situations...

[brick]

Affordable housing is fine and dandy but doesn't need to happen in an expensive tower. Affordable housing in expensive towers happens when land costs become the elephant in the CBA. I don't think Providence is quite there yet given all of the unused and misused land in the West and South Ends. There can be plenty of affordable housing just in renovating the mills as I said in another post - nevermind rehabbing all of the abandoned homes and lots that are around. And as far as social programs go, I think the city has a lot more issues with people who need to heat their homes and feed their kids and provide for themselves than it does with subsidizing high-rises because lower middle class people want to live in a tower. If you want to live in the city with a modest income then find a nice house to rehab on the West or South side instead of complaining that shiny new development isn't in your price range.

Even those disagreeing with me have yet to make a coherent argument for why affordable housing shouldn't be more of TND on reclaimed land or continuing rehab of older buildings.

[eltron]

Affordable housing is fine and dandy but doesn't need to happen in an expensive tower. Affordable housing in expensive towers happens when land costs become the elephant in the CBA. I don't think Providence is quite there yet given all of the unused and misused land in the West and South Ends. There can be plenty of affordable housing just in renovating the mills as I said in another post - nevermind rehabbing all of the abandoned homes and lots that are around. And as far as social programs go, I think the city has a lot more issues with people who need to heat their homes and feed their kids and provide for themselves than it does with subsidizing high-rises because lower middle class people want to live in a tower. If you want to live in the city with a modest income then find a nice house to rehab on the West or South side instead of complaining that shiny new development isn't in your price range.

Even those disagreeing with me have yet to make a coherent argument for why affordable housing shouldn't be more of TND on reclaimed land or continuing rehab of older buildings.

The West End and South Providence have had more than their fair share of affordable housing. The whole point is to provide option in ALL of the neighborhoods. This would significantly strenghthen the ENTIRE city, not just the wealthy enclaves.

Affordable housing continues to go on in those neighborhoods quite effectively. Now its time for some other areas of the city to take up some of the burden...

[Airwaves]

The West End and South Providence have had more than their fair share of affordable housing. The whole point is to provide option in ALL of the neighborhoods. This would significantly strenghthen the ENTIRE city, not just the wealthy enclaves.

Affordable housing continues to go on in those neighborhoods quite effectively. Now its time for some other areas of the city to take up some of the burden...

NIMBY

(sad but true)

[eltron]

NIMBY

(sad but true)

Wow, I hope that was a joke.

You haven't really read much around here, have you? If you have, there hasn't been too much comprehension going on...

[Airwaves]

Been here since the beginning. Making a point: although I am an idealist and belive in a free and equal world - if I'm living in some "wealthy enclave", I would not be happy if my town decided to make affordable housing a part of it (even a small part). I may think that, theoretically, it's a good idea but no way - "not in my backyard". Same goes for 110 - I, nor would 95% of the actual buyers there, would buy if there were people living there on a subsidized basis - it devalues the property. People of means are paying to breathe different air.

[eltron]

although I am an idealist and belive in a free and equal world - if I'm living in some "wealthy enclave", I would not be happy if my town decided to make affordable housing a part of it (even a small part).

hmmm, thats a rather contradictory statement you have there...

luckily, the state has already made this decision for you...see:

Low and Moderate Income Housing Act, RI General Law 45-53.

Policy in both Providence and the State are far from perfect, but its on the right track.

[runturtlerun]

I hear this stuff all the time in my job. Mention

[Airwaves]

hmmm, thats a rather contradictory statement you have there...

luckily, the state has already made this decision for you...see:

Low and Moderate Income Housing Act, RI General Law 45-53.

Policy in both Providence and the State are far from perfect, but its on the right track.

Hence my "sad but true" comment. This is why the State has these wonderful little programs to incent communities to build/require affordable housing. However - no developer of an ultra-luxury condo tower or Carnegie-Abbey-esque community is going to go to the local or state government to ask for assistance if they will be required to include affordable housing in their project scope. Thankfully, the government can't force a fully private development (with zero public assistance) to include affordable housing because that would be illegal and any town would never be so stupid to push away the possibility of a luxury housing development and the huge taxpaying individuals that inhabit them by forcing it on them. This isn't meant to be a social commentary of our times - this is a discussion panel of a residential tower being built to meet the demands of the super-elite - not the needs of the the south side of Providence and how other communities with their better schools and what-not could/should open themselves up to those that would typically not be able to afford living there.

[ruchele]

when i say affordable, I mean something that an average middle class citizen can buy.. maybe 150k condos or apartments that are priced a bit cheaper that Westminsterlofts.

Is "affordable housing" usually aimed at welfare and lower class citizens??? I have no clue

Here's the thing I think most people don't really get: A lot of what is designated as "Affordable Housing" is targeted aimed at what we might consider to be "middle class citizens." In Rhode Island, a $150,000 house or apartment is affordable to a family of 2 making 80% of median income, or a family of 4-5 making 60% median income- both earn about $45,000/year. A family of 4 making 80% of median income could afford a $190,000 house or apartment. Familes in these income groups are elligible to buy or rent homes that are subsidized to ensure their "affordability." I think the majority of "affordable" homeowner opportunities being developed in RI are aimed towards people in these income brackets- probably more toward the 80% bracket than the 60%.

"Affordable" condos aimed at couples with no kids, making between 80% and 120% of median income could probably sell for $145K-$245K.

There are at least 3 definitions of "affordable housing," as I see it. To most people, it means either housing projects for the very poor, or something average people can afford, depending on the context. The official meaning, to the government, policy makers and people in the field, "Affordable Housing" means housing developed partly with state/federal subsidies, and therefore legally restricted to cost 1/3 of any specific income group's (unually 30% to 120% of median income, depending on the requirements of the specific funding) monthly income.

And ok, DaveRPI, you're right, it's not just non-profits that develop "Affordable Housing." But most for-profits avoid it if they can.

[ruchele]

Thankfully, the government can't force a fully private development (with zero public assistance) to include affordable housing because that would be illegal and any town would never be so stupid to push away the possibility of a luxury housing development and the huge taxpaying individuals that inhabit them by forcing it on them.

Actually, many municipalities do exactly this, through "inclusionary zoning" ordinances . IZ rules say that, to pass zoning, any sizeable development must include a certain % of affordable units (keeping in mind that "affordable" really doesn't mean what most people think it does).- or sometimes that the developer has to contribute a $ equivalent of those units to a trust for affordable housing development.

[brick]

The West End and South Providence have had more than their fair share of affordable housing. The whole point is to provide option in ALL of the neighborhoods. This would significantly strenghthen the ENTIRE city, not just the wealthy enclaves.

Affordable housing continues to go on in those neighborhoods quite effectively. Now its time for some other areas of the city to take up some of the burden...

OK fine but tell me why a developer should build a tower of affordable housing? We're not talking about not having affordable housing at all. We're talking about building skyscrapers filled with inexpensive places to live. It's a completely different argument because towers have a whole new set of variables associated - mostly the cost of erecting them and providing all of the services. Again - if a for-profit developer were able to build a 300 unit affordable housing tower, the announcements would have been made by now. These guys aren't willfully ignoring a potential profit for the sake of elitism.

If a for-profit company can't do it, then your choice is to subsidize. Or, you can keep strict IZ code in effect and not get the towers at all because they won't be economically viable. And as I said, the city and state have many more pressing needs for subsidized money and housing than building towers for LMI families to live in. There are more effective ways to house people. I don't even think you disagree with me, I think you are just pimping affordable housing. Just understand that I'm not against affordable housing, I am against building a 30 story building filled with it.

[Cotuit]

Been here since the beginning. Making a point: although I am an idealist and belive in a free and equal world - if I'm living in some "wealthy enclave", I would not be happy if my town decided to make affordable housing a part of it (even a small part). I may think that, theoretically, it's a good idea but no way - "not in my backyard". Same goes for 110 - I, nor would 95% of the actual buyers there, would buy if there were people living there on a subsidized basis - it devalues the property. People of means are paying to breathe different air.

I'm not going to say that none of this is not true about our society, but if it is such a non-starter, how exactly are OneTen, Waterplace, and the Westin II getting around the fact that they are all a stones throw from Kennedy Plaza?

We're talking about building skyscrapers filled with inexpensive places to live.

Actually, I don't think that is what most people are talking about. The market and political/zoning conditions aren't right in Providence at this point to allow for 30 story towers that are exclusively low to moderate income housing.

That does not mean that there cannot be affodable housing in the Downcity core.

[ruchele]

OK fine but tell me why a developer should build a tower of affordable housing? We're not talking about not having affordable housing at all. We're talking about building skyscrapers filled with inexpensive places to live Again - if a for-profit developer were able to build a 300 unit affordable housing tower, the announcements would have been made by now.

Or, you can keep strict IZ code in effect and not get the towers at all because they won't be economically viable.

Just understand that I'm not against affordable housing, I am against building a 30 story building filled with it.

We all acknowledge that a "tower of affordable housing" isn't a possibility for a number of reasons. But what about, say, 20 or 30 or those apartments being "affordable?" Or even 10?

And keep in mind, we're not even talking about being affordable to the destitute- we're talking about affordable to those "middle class people" who were mentioned before.

[Airwaves]

Actually, many municipalities do exactly this, through "inclusionary zoning" ordinances . IZ rules say that, to pass zoning, any sizeable development must include a certain % of affordable units (keeping in mind that "affordable" really doesn't mean what most people think it does).- or sometimes that the developer has to contribute a $ equivalent of those units to a trust for affordable housing development.

Nationally, the track record of such efforts is not impressive though. It's mostly still voluntary and until it becomes mandated, it won't work and very few places are willing to make it mandatory. Often - developers are able to buy out of these requirements. Seperately - you mentioned there were not many for-profit developers out there doing affordable housing - not true. There are many doing that and only that and they are making a fortune - silly money.

[eltron]

Nationally, the track record of such efforts is not impressive though. It's mostly still voluntary and until it becomes mandated, it won't work and very few places are willing to make it mandatory. Often - developers are able to buy out of these requirements.

This is completely untrue.

Boston, New York, Cambridge, the entire state of California, and countless other municipalities all across the country are making very effective use of MANDATORY IZ or linkage payments that get units built offsite.

Now, I think we just happen to be talking about a 35 story tower because it is the biggest and shiniest of the developments going up, so just as it gets some positive buzz from that, it will also generate some other not-so-positive discussion focused around it. But Cotuit is right, there is no reason why affordable housing should not be downtown. The Dreyfus Hotel project is fantastic. And maybe we don't need huge gleaming towers filled with affordable housing, but I can count off over a dozen mixed-income projects in the 8-15 story range in urban areas that can stack up with the best of what Providence has to offer downtown right now.

One other thing, the good developers are not averse to doing what it takes to get a good, profitable project. If zoning has a maximum height of 200 feet, but by including 10 affordable units, you can get 25 more market units and a max height of 300 feet, the developer is going to do it. These are not disincentives here, merely tradeoffs.

[Airwaves]

We all acknowledge that a "tower of affordable housing" isn't a possibility for a number of reasons. But what about, say, 20 or 30 or those apartments being "affordable?" Or even 10?

And keep in mind, we're not even talking about being affordable to the destitute- we're talking about affordable to those "middle class people" who were mentioned before.

As stated earlier - the only way that project is going to make money is if they actually RAISE some of the prices of the units - not the other way around. Just because all the units sell and they all sell for crazy money does not mean the project is a financial success. They can't drop the price of 1 square foot of that building.

[eltron]

...maybe this has gone off topic and these posts should be moved to the affordable housing thread. I don't know...

Cotuit, you're in charge!

[MikeR]

I hear this stuff all the time in my job. Mention

[brick]

We all acknowledge that a "tower of affordable housing" isn't a possibility for a number of reasons. But what about, say, 20 or 30 or those apartments being "affordable?" Or even 10?

And keep in mind, we're not even talking about being affordable to the destitute- we're talking about affordable to those "middle class people" who were mentioned before.

What of it? Why should the city subsidize this? Why should 10 people win some lottery to live better than their peers? And what guarantees that the 10 people aren't people who win special favors with the selection committee? Give me some really good reasons outside of some utopian view that everyone will be happier if we can just get them to mix more. And why should a developer take on the burden of lowering their potential profit for a program like this if they aren't subsidized to do it?

The attempt to create affordable housing was the big push of HUD in the 60's and 70's and a lot of ill conceived projects ended up contributing to the urban blight and creating the movement of the UMI to the suburbs and the creation of small extremely affluent enclaves in urban areas - this is exactly the stuff you guys don't want, right? Perhaps it could be done more intelligently, but I'm not sure we're all that much more intelligent now than we were then.

These are not disincentives here, merely tradeoffs.

Of course not, which brings me right to my point that developers have not found a way to make this profitable. And, I'm really not sure that they will. It's not like downtown is huge. This isn't like telling LMIs in Manhattan that they have to live in Jersey City or something. We're talking about differences in income being 5 or 6 city blocks away from each other.