Affordable housing projects have been the punching bag of home-owners and politicians since the creation of the Low-Income Housing Tax Credit in 1986.
Followers of NIMBYism (Not In My Back Yard) claim low-income renters are transient and have no motivation to invest in their community. The reduced-cost rental units they occupy host a series of neglectful personality types, they say, who let the unit deteriorate into an eyesore that tears down neighbors’ real estate prices.
The unfortunate trope of value-killing rental units doesn’t seem to have grounding in cities known for stratospheric home prices, however, according to San Francisco-based home-exchange network, Trulia. The organization reports that low-income housing projects in the nation’s 20 least affordable markets failed to have a significant effect on nearby home values, with only a few exceptions.
After rounding up figures between the start of the 2007 housing crash, the organization found only two cities — Boston and Cambridge, Massachusetts — where nearby projects negatively affected home prices. This was possibly due to the projects in those two cities crowding together, rather than peppering the municipalities. Housing project neighbors in Denver, meanwhile, saw a modest price jump.
The typical housing project allows an investor to offset construction costs with a federal tax credit of up to 70 percent of the property value, and then pass those savings down to renters in the form of lower rent.
For years, the beneficiaries of such projects were characterized as low-wage families barely managing to stay afloat. However, more and more people are desperately turning to incentivized housing in the days of $2,300 rent in Los Angeles and $2,000 rent in DC.
Government-encouraged affordable housing is now a necessity in some municipalities, according to San Jose Mayor Sam Liccardo, whose town boasts an average rent of $2,627 for a sun-drenched, 864 square-foot broom closet.
“It’s not news to students of housing policy that affordable housing does nothing to diminish property prices in surrounding neighborhoods. It’s unfortunate, actually, that there has to be a fight to overcome the NIMBYISM,” Liccardo told Grit Post, before lauding an upcoming $450 million bond referendum before San Jose voters this November.
The bond, if passed, will finance the construction of up to 3,550 new units of affordable housing in a city that Liccardo said suffers “a historic housing crisis” as a result of the tech industry boom.
Currently, there are six new jobs for every house built in San Jose, and that miserable ratio extends to the entire region of Silicon Valley and surrounding counties, the mayor said.
San Jose homes typically sell for more than $1 million due to high demand, meaning most people who aren’t tech gurus are priced out. No firemen. No teachers. No cops. It’s a bad look for a city, Liccardo said.
“Every community wants teachers,” he said. “Every community needs paramedics, and construction workers. We have to recognize the imperative of having homes for everyone.”