alice’s search for survival: the barriers and paths to ...€¦ · connecticut housing ~1.5...
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ALICE’S Search for Survival: The Barriers and Paths to Opportunity for
Connecticut’s Working Households
George McCarthy Lincoln Institute of Land Policy
Cambridge, MA, USA www.lincolninst.edu
The False Housing Shortage
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Connecticut Housing ~1.5 million units (2014)
– 11.1% vacant (165,000 units) ~110,000 severely cost burdened HHs
– 48% of low-income renters ~4,400 Homeless Tens of thousands of families who “play by the
rules” are pushed out of the market (ALICEs) www.lincolninst.edu
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But, where is the supply shortage?
Why don’t housing markets behave like markets?
Market prices do not reflect market fundamentals (incomes, cost of construction, etc)
Prices do not seem to adjust to account for changes in demand
Supply decisions do not conform to what is needed on the demand side
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1) because they are two markets, not one.
Market for shelter Market for investment Two different sets of “fundamentals” dictate
market dynamics – Shelter: HH income, costs of construction – Investment: Investor liquidity, interest rates, returns
for alternate investments www.lincolninst.edu
2) because our understanding is built on myths
Filtering Inclusionary zoning drives up rents and purchase prices in
market rate housing It is impossible to supply affordable housing without
subsidy because the numbers don’t work
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2) because our understanding is built on myths
Filtering: No evidence that hsg filters, but n’hoods do Inclusionary zoning drives up rents and purchase prices in
market rate housing: How are market rents set? It is impossible to supply affordable housing without
subsidy because the numbers don’t work: Let’s see about that.
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More troubling concerns: We cannot build our way out of an affordable
housing shortage – New construction <1% of existing stock – Affordable <15% of new construction – It will take 30 years to fill gap, with no loss of existing
affordable units But, we lose affordable units faster than we
produce them www.lincolninst.edu
We need a portfolio of solutions Preservation of existing affordable units
– Rental, Owner-occupied, and Manufactured Housing
Production of new affordable units – Aggressive inclusionary, conversion of existing
Promotion of permanent affordability – Deed restricted, CLTs, ROCs
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The Older Stock
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New Developments
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Carver, MA
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Unadilla, NY
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A More Radical Solution: Affordable Housing in Singapore
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Source: Sock-Yong Phang, Global Superstar Cities, Inequality and Housing Policy, March 2015
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Source: Sock-Yong Phang, Global Superstar Cities, Inequality and Housing Policy, March 2015
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Source: Sock-Yong Phang, Global Superstar Cities, Inequality and Housing Policy, March 2015
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Source: Sock-Yong Phang, Global Superstar Cities, Inequality and Housing Policy, March 2015
Closing thoughts We need to decide whether we can tolerate
the instability of the two-market housing system
If we can’t then we need to embark on much more aggressive actions to provide affordable housing for ALICEs
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Thanks! George McCarthy Lincoln Institute of Land Policy Cambridge, MA [email protected] @gmacmccarthy, @landpolicy