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Affordable Housing: The Plain Talk

Source: Extracted from “Home for Hope”, Greater Victoria Coalition to End Homelessness, http://homeforhope.ca/

The key issue across the region is housing affordability.

In a survey conducted by the Canadian Mortgage and Housing Corporation (CMHC) with the support of the Federation of Canadian Municipalities (FCM), municipalities across Canada have identified that a lack of housing affordability and choice for specific groups as the key issue related
to housing challenges in their communities. [1]

When municipalities were asked to identify the top regulatory barrier to affordable housing and infill development, municipalities identified neighbour concerns as the most significant barrier to developing additional affordable housing options across the country.[2]

Non-market housing developers across Greater Victoria are not alone in addressing challenges faced in gaining a broader community support for proposed projects designed to address various types of community need.

Concerns about Affordable Housing Development:

Concerns that arise from Public Engagement through the project approval phase of development include, among others: Property values, Density: Congestion & Infrastructure Strain and Neighbourhood Character.

  1. Property Values – Often residents are concerned that the introduction of affordable housing into the neighbourhood will have a negative impact on the surrounding property values.
  2. Density, Congestion and Infrastructure Strain – Residents often comment that more affordable development will increase density, make the streets more congested and create additional strain on the urban infrastructure.
  3. Neighbourhood Character – There is a perception among some residents that affordable housing will be built from low quality materials and will not be aesthetically pleasing or well integrated. Some residents feel this would undermine the neighbourhood character.

Property Values:

Why Property Values are Important

Increasing property values indicate a number of positive trends for neighbourhoods. They signal that the neighbourhood has become a desirable place to live, to locate business, and to invest in for the future. For homeowners, an increasing trend can enhance their equity position. Measurable increases in home prices and rents as well as a general increase in real estate activity often represent important benchmarks when thinking of neighbourhood revitalization, growth and security.

The vast majority of studies have found that affordable housing does not depress neighbourhood property values, and may increase them in certain instances.[3]

What About Property Value?

A literature review of 31 separate studies to examine if non-market (affordable) housing had a negative impact on surrounding property values in California found that seven studies documented positive property value effects and 19 had no discernible effect at all. Negative effects were found in one study and three were inconclusive.[4]

What about Selling Price?

In a BC study, professional appraisers tracked the impact of seven social housing projects across the Lower Mainland, Vancouver Island and the interior. In every case, neighbours opposed the projects because they feared their property values decline, thus threatening their investment. Over five years the appraisers tracked sale prices among nearby houses, and compared those to a control area. The study found house prices near the controversial projects increased as much or more than houses in the control area. In addition, there was no evidence of panic selling, or of houses taking extraordinarily long times to sell.[5]

How Much Can the Value Increase?

According to a study from the University of Minnesota, for every 100 feet closer to a well-managed non-profit multi- family subsidized housing development, a property was valued $86 more than if it was not.[6]

How is This Studied?

There are two analytical frameworks used to address the question of affordable housing development and nearby property values:

  1. Matching – Compares the performance of two otherwise comparable neighbourhoods, one with affordable housing and one without. Historically, all of the studies that make use of this methodology have found no difference in property values between two areas or a positive effect in those neighbourhoods with affordable housing.[7]
  2. Multivariate Statistical Analysis – Explains the property value as a function of structural characteristics (age, square footage, etc.) and neighbourhood characteristics (poverty rate, amenities, etc.). This methodology can compare the value of properties both close to affordable developments and further away, while controlling for the influence of these structural or neighbourhood variables. Most of these studies support the ones developed through the ‘Matching’ methodology in that affordable housing generally has no, or a positive effect on surrounding property values.[8] It is important to note this methodology provides a more nuanced, detailed analysis of the relationship between affordable housing and surrounding property values, suggesting that in some circumstances, negative effects are possible.

The vast majority of studies have found affordable housing does not depress neighbourhood property values, and may increase them in certain instances.[9]

Important Considerations

Many community members, even those who support the idea of affordable housing, may feel concern when there is a proposal in their community. Often their first comment in reaction to a proposal will be about preserving or enhancing the property values across the neighbourhood. This fear is often misplaced, as typically the addition of
affordable housing units to the neighbourhood will further enhance the surrounding property values while providing numerous beneficial spill-over effects. Suggested through the literature are five concrete ways to minimize negative effects to affordable housing developments: [10]

  1. Design
  2. Management
  3. Revitalization
  4. Strong Neighbourhoods
  5. Concentration

Density

Congestion and Infrastructure Strain

The third most commonly cited concern linking neighbor concerns to affordable housing is around the issue of density.[11] More units per acre mean lower land costs per unit and in an effort to provide meaningful levels of affordability, developers have been producing smaller units as these offer the lowest cost of land per unit.

It is important to note that density alone is not enough to ensure affordability. Local governments must also intervene with programs and additional supports to ensure the new higher-density developments are affordable to those in-need.[12]

Typically, density concerns present themselves in two distinct ways:

  1. Traffic Residents often comment that more affordable housing will increase the density of a neighbourhood, which will lead to increasing congestion on roadways. When interviewed about the typical objections on the physical characteristics of a proposal, traffic is second only to location as the most cited concern and is mentioned in 22% of cases.[13]

There is nothing to suggest residential intensification will lead to congestion and increased travel times within neighbourhoods.[14] This may seem somewhat counter intuitive as the assumption is that more households equal more cars.

In truth, there are a few key points that indicate an increase in the residential density for affordable housing will not lead to too much traffic:

  • Like any new development, there is a requirement that higher density or in-fill housing meets certain municipal planning and engineering standards.[15] This ensures there is a degree of harmony between a proposed residential development and the surrounding community.
  • Affordable multiple-family dwellings near high-quality mass transit provide numerous alternatives to car travel.
  • Low-income households own fewer cars and drive less.[16]

In addition, high-density housing can encourage nearby retail development encouraging walking and transit usage, the latter of which, only becomes cost-effective at densities above eight or 10 units per acre.[17]

  1. Infrastructure Strain Residents are often concerned increases in neighbourhood density will strain infrastructure and public services. In truth, there are numerous advantages to encouraging a higher degree of residential diversity across communities, which could include medium-high-density residential development. Some of these advantages include:
  • High-density residential development requires less extensive infrastructure networks compared to low-density single-family housing.[18]
  • High-density housing creates an economy of scale for the cost of providing the infrastructure with the cost savings being passed on to the resident, resulting in more affordability for all residents.[19]
  • More affordability for all residents creates enhanced fiscal stability for a neighbourhood, resulting in fewer turnovers of residents and a higher degree of collective efficacy.[20]
  • More density means more users of public transit making it more viable, and encourages additional routes and more frequency.[21]
  • Communities can save taxpayers and new residents money when residential development is allowed in existing communities where the infrastructure has already been paid for and is underutilized.[22]
  • Higher-density in-fill residential development can also revitalize stagnant commercial districts and spur additional community investment.[23]

Research has identified some recurring themes across strong neighbourhoods, indicating that strong neighbourhoods are:[24]

  1. Inclusive with active community involvement as well as a respect for diversity and a tolerance of differences.
  2. Vibrant with a strong sense of place identity, pride and opportunities for community interaction.
  3. Cohesive with a sense of mutual responsibility and trust.
  4. Safe with positive subjective and objective measures of safety. 
 

Supporting appropriate increases in density across neighbourhoods can help ensure these communities remain strong, healthy and affordable places for all people to call home.

Neighbourhood Character

Neighbour residents often express a concern affordable housing will be made of low-quality materials and it will not be particularly well integrated into the existing community. The fear is the design and construction of affordable housing will undermine the character of the neighbourhood.

Neighbourhood character often refers to the look and feel of a particular residential area and is used to describe the uniqueness or strengths of certain areas. This concept is applied to urban planning systems that seek to identify and enhance a city that is comprised of distinct neighbourhoods, each with their own identity and character.

What is Affordable Housing?

Affordable housing is not affordable because it is poorly constructed from cheap or low-quality materials. Housing is affordable because innovative non-profit housing developers, with government support, are able to keep the construction and operating costs low.[25] These savings are then passed along to the residents in the form of additional affordable housing options throughout the neighbourhood.

Affordable housing must comply with the same building code standards as market- rate housing and as such, the physical condition and quality is the same.[26] In fact, it is very common that affordable, non-profit operated rental housing is mistaken for market condo developments.[27]

When residential projects receive public funding, there are generally additional development restrictions and higher building standards when compared to non-funded projects.[28] Ultimately, this results in a higher quality building that is well designed and is effectively integrated into the community. Further, the evidence clearly fails to support the idea that subsidized rental housing can in some way undermine community.[29]

It is also very important to consider affordability and density do not mean high-rise developments in traditionally single-family home residential neighbourhoods. There are numerous ways that developers are enhancing, rather than detracting from, the neighbourhood character. Good design that respects planning guidelines and regulations will create a successful project that supports the existing character of a neighbourhood.

It is also important to consider what make neighbourhoods attractive to residents.

Neighbourhood qualities such as:

  • Affordability
  • Suitable housing
  • Good public transit
  • Good amenities and services

[1] CMHC. 2001. Survey of Canadian Municipalities: Regulatory Measures for Housing Affordability and Choice. Socio-economic Series Issues, 87.

[2] Ibid.

[3] Centre for Housing Policy. “Don’t Put it Here!”: Does Affordable Housing Cause Nearby Property Values to Decline. http://www.nhc.org

[4] Ibid.

[5] http://www.housing.gov.bc.ca/pub/htmldocs/pub_neighbour/p_value1.htm

[6] Goetz, Edward G., Hin Kim Lam, and Anne Heitlinger. 1996. There goes the neighborhood? The impact of subsidized multi-family housing on urban neighborhoods. Minneapolis-St. Paul: University of Minnesota, Center for Urban and Regional Affairs.

[7] Centre for Housing Policy. “Don’t Put it Here!”: Does Affordable Housing Cause Nearby Property Values to Decline. http://www.nhc.org

[8] Ibid.

[9] Centre for Housing Policy. “Don’t Put it Here!”: Does Affordable Housing Cause Nearby Property Values to Decline. http://www.nhc.org

[10] Centre for Housing Policy. “Don’t Put it Here!”: Does Affordable Housing Cause Nearby Property Values to Decline. http://www.nhc.org

[11] Federation of Canadian Municipalities. 2009. Housing in My Backyard: A Municipal Guide For Responding to NIMBY. http://www.hcd.ca.gov/hpd/mythsnfacts.pdf

[12] Wynne-Edwards, J. 2003. Overcoming Community Opposition to Homelessness Sheltering Projects under the National Homelessness Initiative. Government of Canada

[13] Federation of Canadian Municipalities. 2009. Housing in My Backyard: A Municipal Guide For Responding to NIMBY.

[14] Federation of Canadian Municipalities. 2009. Housing in My Backyard: A Municipal Guide For Responding to NIMBY

[15] http://www.hcd.ca.gov/hpd/mythsnfacts.pdf

[16] Ibid

[17] Ibid

[18] Ibid

[19] Ibid

[20] Federation of Canadian Municipalities. 2009. Housing in My Backyard: A Municipal Guide For Responding to NIMBY

[21] http://www.hcd.ca.gov/hpd/mythsnfacts.pdf

[22] Ibid

[23] De Wolff, A. 2008. We Are Neighbours: The Impact of Supportive Housing on Community, Social, Economic and Attitude Changes. Wellesley Institute.

[24] Ibid

[25] Federation of Canadian Municipalities. 2009. Housing In My Backyard: A Municipal Guide For Responding to NIMBY.

[26] Ibid

[27] http://www.hcd.ca.gov/hpd/mythsnfacts.pdf

[28] Federation of Canadian Municipalities. 2009. Housing In My Backyard: A Municipal Guide For Responding to NIMBY.

[29] http://www.jchs.harvard.edu/sites/jchs.harvard.edu/ les/rr07-3_ellen.pdf

 

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