Wednesday, June 10, 2009

A silver lining in the housing crisis

An article in today's Denver Post highlighted some houses that the city of Aurora (Colorado's second largest city, just east of Denver) have purchased from foreclosure and are fixing up to sell to qualified low-income and middle-income families.  It's money from the Neighborhood Stabilization Act, which is part of the Housing and Economic Recovery Act (signed into law by Bush back in July), that allowed Aurora to do this in the first place.  I'm loving this for a couple of reasons, one of which is that it's part of my Master Plan To Eradicate Everything Undesirable when I take over the world.

Contractors are being hired to work on the properties and make them essentially new when the new owner moves in. According to the article, potential buyers must meet certain income criteria before they can even look at a house, and the homes will be sold for their appraised value or for their purchase cost plus the cost of renovation, whichever is less  (price is non-haggleable).

So there are three good things happening here: one, Aurora is employing contractors and keeping people on a payroll, which should inevitably put some cash back into the economy (every dollar into design and construction supposedly changes hands as many as five times, holla); two, the program gets folks into homes that would otherwise sit empty, look icky, and bring down everyone else's home values in the neighborhood; three, the low-income or middle-income families can benefit from normal-market home-ownership perks like being able to deduct mortgage interest on their taxes and sell the house for likely much more than they paid; and four, it has the possibility of mixing low-income families into middle-class neighborhoods, which can have a positive effect on the family.

Reasons Three and Four are the most important to me.  Back in 2001 when I first started looking at buying a loft downtown, I looked into a new complex that was going up in LoDo.  The saleslady mentioned affordable housing, and I thought I wasn't eligible until she informed me that the income limit for a single person for affordable housing was...$60,000.  I was making about half that.  First of all, what does it say about a society when we consider someone making $60,000 a year in need of affordable housing?  Perhaps our housing costs are out of range for most decent, hardworking folk?  I almost jumped at the chance to buy one of the affordable housing units, but then I discovered two nasty truths about them: one, they're the crappiest units in the building.  They had no view, no balcony, and were on the noisiest corner of the complex.  Good thing I wasn't trying to raise kids in this building.  Second, I found out that the cost of the unit would have to be capped at a 5% increase of its previous purchase price for the next twenty years, in order to keep it as an afforable housing unit.  So, I don't make a lot of cash now, and you'd like to punish me by not even letting me reap one of the good benefits of home ownership, the so-called American Dream.  Thanks for punishing me for being poor.

When I was working on my thesis on designing environments for the homeless mentally ill, the head of the program I interviewed which had the lowest recidivism rate shared with me her secret for truly truning people from homeless to homeworthy: one, you have to provide support, like "reminder training" of how to keep a house clean and how to balance a checkbook (when people are homeless for too long, especially while taking drugs or suffering from a mental illness, they can actually "forget" how to do these things); and two, mix their housing units into the general population.  Instead of ghettoizing them into a public housing complex and labeling them, put a person (or a few people) into an apartment complex our single- and dual-family home neighborhood full of working-class and middle-class folks.  As Ruby Payne observed, if poor kids only hang out with poor adults, then they only learn how to do what poor people do.  In a neighborhood full of people that understand the implicit and explicit value of listening to teachers, learning, saving for college, evaluating resources, and so on, lower-income families learn how to do what needs to be done to lift themselves out of poverty for the long term.

So, I like what Aurora is doing.  They're taking care of their neighborhoods, their property values, and their communities.  It's still not as far as my Master Plan To Eradicate Everything Undesirable would go, but it's a decent start.


ms. kitty said...

It's really encouraging to hear what Aurora is doing to provide real low-income housing. Thanks for posting about it, Pixie.

Anonymous said...

I believe the income that qualifies you for affordable is based on a percentage of the mean income for the renewal area.

We may not consider 60K/yr poor, but when all your neighbors are averaging 150K/yr it works out that way.

I am sure the formula was worked out in the 60's when there was not the record income disparity we have today.