Affordable means what?
The general, Island-wide discussion of the need for affordable housing is muted these days. After "Martha's Vineyard: Preserving Community - An Island-wide Housing Needs Assessment," conducted by John J. Ryan of Development Cycles for the Island Affordable Housing Fund, was released in November 2001, voters recognized the dire implications of Mr. Ryan's study. They acknowledged the grave shortage of adequate housing to rent and to own, they reflected upon the steep run-up of real estate values that has, along with an otherwise high cost of living, effectively shown the No Trespassing sign to Islanders of modest income. Voters agreed that to stiff-arm an entire class of Islanders would make the community and the lives of all of us poorer. They were persuaded that steps could be taken to deal with the matter, though they winced at the expense Mr. Ryan estimated would be incurred to overcome the housing shortfall. There was widespread pitching in to get the hard work started.
There has been progress, almost exclusively in non-commercial, subsidized projects, most of them small scale, many not yet free of the mire of regulatory scrutiny and legal blocking actions. When Mr. Ryan updated his numbers in 2005, 95 affordable housing ownership units had been created, either from scratch or by rehab; and 83 year-round rentals had been made available, either by building new or rehabbing, or converting for year-round rental dwelling that had formerly been summer rental units. A total of 165 additional units had been permitted, were tied up in litigation, or were under construction. That was last year. The need that was documented in 2001 was 467, including below market rentals, market rentals, and housing to own for long-term residents who had been renters during their Island residence of at least 10 years. In addition, in 2001, more than 12 percent of Island renters - that is, people who had found places to rent, as distinct from those who needed a place to rent - were experiencing "critical" problems, typically rents that were unaffordable. In 2001, Mr. Ryan estimated that more than $28 million in subsidies would be needed, in per unit amounts of as much as $100,000, to put in place by 2005 the housing that was identified as needed in 2001.
One may say that we've made some progress. One must admit that what's been accomplished has not been nearly enough, and that it has almost all been the result of the efforts of too small a group of dedicated affordable housing supporters, relying on a combination of donations from generous individuals and businesses and, looking ahead, on the willingness of voters to put the bite on Vineyard taxpayers.
Richard Leonard called this week after reading a Times editorial that discussed issues surrounding affordable housing. Richard, president of the Martha's Vineyard Co-operative Bank, is also president of the Martha's Vineyard Housing Bank Coalition. He thought the editorial left out three crucial bits of information about the legislation, now before the state legislature, that would create the Housing Bank and fund it with a one percent levy on the sales price of a Vineyard property, to be paid by the property's seller. (The buyer pays the two percent fee exacted by the Martha's Vineyard Land Bank and used to buy and preserve Vineyard property.)
One of the three crucial bits is that the first $750,000 of the sales price is exempt from the calculation of the Housing Bank's one percent fee. And - next bit - this exemption may be enlarged if inflation requires it, at the discretion of the Housing Bank commission created by the act. That's important because it means that folks selling modest, or even moderately valuable Vineyard property will pay little or nothing to the Housing Bank. Which is comforting, except if you believe that the appreciated value of an Islander's real estate ought to be his to keep, considering that the property's maintenance, expansion, and carrying costs, including interest and taxes, have been paid by him for years, and that's been payment enough, so that he ought not pay anything more as he exits the scene, in exchange for the privilege of having lived here.
The third critical bit is that the proposed legislation gives the housing bank wide latitude in dispensing the $2 million plus that it may be expected to generate annually from the one percent fee. Eligible recipients may be non-profit or for-profit organizations, or individuals. They may need grants, or loans, or loan guarantees, or development funding, or planning assistance. The housing bank will be enabled to furnish such help. That means that theoretically private, commercial housing development may be helped by Housing Bank funds exacted from taxpayers.
Which is also comforting, especially if you think that, a) modestly priced housing in a community should not be financed exclusively by public funds; and b) that many modest-income families might prefer and ultimately benefit from privately developed housing with no strings, except the mortgage, attached. Plus, the Housing Bank's funding flexibility seems encouraging, in light of two items in John Ryan's 2001 housing needs study. In calculating how much money would be needed to underwrite the creation of 467 units of housing that was missing in 2001, Mr. Ryan proposed that 30 units of rental housing and 30 units of ownership housing might be created merely by what he called "zoning support." Mr. Ryan estimated the per unit subsidy price tag for these 60 housing units at zero. So, the good news is that the Housing Bank could help developers whose projects are made possible by "zoning support," although our track record so far suggests that low density, rather than increased opportunity, is the community preference.
Which brings me to the point of all this, namely that the conversation about affordable housing that raged in 2000 and 2001, and that has now lapsed, needs badly to be revived, and not only in the small circle of affordable housing advocates who are heavily represented on the boards of the several non-profit organizations that work feverishly in support of housing efforts. The debate must be wider, and here are several questions that should be a part of that debate:
Should subsidies drawn in largest part from taxpayers, many of whom do not vote here, and also from private individuals and organizations, be the chief funding source for the housing we need? Don't the Land Bank's two percent fee, as well as its acquisitions, and eventually the Housing Bank's one percent levy, all help to inflate the real estate prices, intensifying the challenge to efforts to secure housing for modest income Islanders, efforts already unable to keep up with the need? And if all of the affordable housing comes with subsidies and with the strings that are associated with subsidized housing and permanent affordability attached, limiting or eliminating the owner's access to the appreciated value of his home equity, aren't we creating a class of Islanders, unlike you or me, who forfeit one of the chief values of homeownership, namely the use of equity to send the kids to college or plan for retirement, or add a wing for an aged relative? Is it our determination to block even selective increases in residential density, as proposed in the Cozy Hearth plan, which received appallingly little support from housing advocates and, doing so, frustrating commercial developers who may be willing to increase the affordable housing stock? Have we maintained control of housing growth in support of high real estate values by leaning on taxpayers and dimming the financial futures of a set of our neighbors?
The Housing Bank Coalition, on its web site, defines the problem: "Affordable housing is about people conservation - neighbors and nannys, school teachers and social workers, truck drivers and technicians, artists and arborists, plumbers and plasterers, the town clown and the town drunk, whistleblowers and curmudgeons, peacemakers and troublemakers, politicians and taxpayers, grandmothers and grandfathers, sisters and brothers, those of different ages, abilities, incomes, colors, religious beliefs, sexual orientations. We need all these people; if we lose any it's a lesser place ... Affordable housing is less about houses or land or development and more about people and community."
Yes, true, but is it our aim that every one of these folks should live in subsidized housing? Maybe this is the ultimate question: Determined as we are to conserve all these folks, how steep a price should we require them to pay for our generosity?