Category Archives: Housing

More Unaffordable Affordable Housing

The Lawson Companies., a Virginia Beach multifamily development company, is planning to construct a $19.25 million, low-income housing project in South Richmond, reports Richmond BizSense. The apartment complex will have 96 units, for an average cost of $200,000 each. Rent for two-bedroom apartments will average around $1,000 a month, while three-bedroom units will go for $1,100.

“We see this project drawing a lot of families,” said Freddie Fletcher, a Lawson development associate. “It’s a good market over there for families looking for an affordable, Class A apartment.”

The Virginia Housing Development Authority (VHDA) is providing financing for the development. The article does not say whether or not the $1,000-a-month rent will be subsidized from vouchers or other public funds.

The project appears to be similar to many other lower-income housing projects in Virginia. Lawson Corp. has $290 million in ongoing development across Hampton Roads and Northern Virginia, and is looking to do more deals in the Richmond region. Continue reading

Virginia’s Unaffordable Approach to Affordable Housing

The Creighton Court public housing project in Richmond.

If the public policy debate over affordable dwellings is as impoverished as that described in The Virginia Mercury this morning, poor Virginians are doomed to lives of housing misery. Here’s how reporter Ned Oliver sums up the controversy: “Is affordable housing something for the state to tackle, or should it be left to cities and counties to address with local money?”

Embedded in this formulation are two assumptions: (1) The paucity of affordable housing might be remedied by more grants and low-interest loans; and (2) it is the responsibility of government, either state or local, to find the money for those grants and loans. In other words, the solution to the affordability crisis is more government, not less. Yet in the same article, Oliver notes that it costs $200,000 per unit to build new apartment complexes! Continue reading

Affordable Housing: Thinking Outside the Container

Sheila Gunst shows off the kitchen in a modified, 320-square-foot shipping container.

Sheila Gunst estimates that there are 33 million cargo containers around the world, half of which are empty. Many of the empties languish in United States because China ships $400 billion more in trade goods to the U.S. every year than the U.S. ships back. After making multiple trans-oceanic trips, used containers stack up in port cities like Norfolk by the thousands.

And therein lies a business opportunity. The shipping lines can recycle them as scrap metal… or sell them to someone like Sheila, an interior designer living in the Richmond area, who dreams about refashioning them into inexpensive dwellings. Continue reading

Mugged by Reality: Sedgwick Gardens Edition

Lawrence Hilliard moved to Sedgwick Gardens to escape the ghetto. Then the ghetto came to him. Photo credit: Washington Post

A conservative, as the saying goes, is a liberal who has been mugged by reality. Well, it appears that a large number of liberals in the affluent Cleveland Park neighborhood of Washington, D.C., have been mugged by reality. Whether they become conservatives remains to be seen.

In a social experiment that could have implications here in Virginia where the idea of mixed-income housing is all the rage, the D.C. Housing Authority increased in 2016 the maximum value of vouchers to 175% of fair market rent as set by the Department of Housing and Urban Development. That meant, according to the Washington Post, that vouchers could be used for one-bedroom apartments renting at up to $2,648 per month.

At Sedgwick Gardens, a historic Art Deco apartment complex overlooking Rock Creek Park, one-bedroom apartments rented for about $2,200 per month in 2017. The apartment complex, located in D.C.’s predominantly white Cleveland Park neighborhood, is, as the WaPo puts it, “a bastion of urbane liberalism where only one in 20 voters cast a ballot for President Trump in the 2016 election.” The reaction of many Sedgwick Gardens inhabitants to the influx of tenants directly off the streets, however, was less than warm, tolerant and embracing. Continue reading

Another Fig Leaf Solution for Affordable Housing

Virginia lawmakers are adding $4 million this year to the Commonwealth’s affordable housing trust fund. While acknowledging that the sum is a “drop in the bucket” when it comes to affordable housing costs — the money would bring the revolving low-interest loan fund up to $9.5 million — the Washington Post cites housing officials as saying that the money “is a sign that the state is paying attention to a growing need.”

I would characterize the $4 million expenditure differently. The political function is to allow the Northam administration and lawmakers generally look like they’re doing something while. in actuality, they are studiously ignoring the underlying problem. The erosion of affordable housing is mostly a supply-side problem, not a financing problem. Continue reading

Bacon Bits: Economic Research Edition

I periodically check the research papers coming out of the National Bureau of Economic Research (NBER) because they often address issues of interest to Bacon’s Rebellion. The research is far more rigorous from a methodological perspective than the work product of special-interest and advocacy groups, hence more worthy of serious consideration — even when it leads to public-policy implications I don’t like! Here are some quick hits from recent studies:

“The Effects of Rent Control Expansion on Tenants, Landords, and Inequality: Evidence from San Francisco”
“We find rent control increased renters’ probabilities of staying at their addresses by nearly 20%. Landlords treated by rent control reduced rental housing supply by 15%, causing a 5.1% city-wide rent increase.”

Implications: Rent control benefits existing renters but punishes newcomers entering the rental marketplace. Can you say “increasing homelessness?” As zoning codes and other restrictive policies aggravate the supply/demand imbalance here in Virginia, will our politicians avoid the temptation to impose rent controls? Continue reading

Bacon Bits: Incompetence and Failure Everywhere You Look

Where are the social justice warriors? SJWs are super sensitive to subtle signs of “institutional racism.” Perhaps they should focus on the widespread incompetence in Virginia’s local foster care systems. For instance: A Virginian-Pilot investigation has found “a pattern of mismanagement, retribution and poor performance” in Norfolk’s foster care program. “Employees say they saw the foster care program go from bad to worse. It started with  children languishing in foster care for years, with little done to get them adopted. In more recent years, case workers say they’ve been pressured to get kids off the foster care rolls by any means necessary, even if that sometimes meant putting the children in harm’s way.” Sometimes foster children have been placed in situations where they have been assaulted and sexually molested. These children are disproportionately African-American. Why hasn’t this failed system become a cause celebre of the Left? Could it be that it doesn’t fit The Narrative?

Metro free falling. Ridership on the Washington Metro system continues its steady decline, sinking to fewer than 600,000 average weekday trips for the first since since 2000, according to the Washington Post. Ridership peaked in 2008 at 750,000 weekday trips. The passenger rail system, plagued by safety and maintenance issues, has been engaged in a SafeTrack rebuilding program that may account for some of the loss. But the system suffers chronic problems, such as too few trains, too many service disruptions, and the emergence of ride-hailing alternatives such as Uber and Lyft.

Why so few starter homes? Why are home builders constructing so few starter homes (defined as those selling for $200,000 or less)?  Continue reading

Blacksburg Tapping the Brakes on Student Housing

Student-oriented housing near Virginia Tech. (Photo credit: Roanoke Times.)

While the People’s Republic of Charlottesville grapples with mandatory parking (see previous post), the People’s Republic of Blacksburg is wrestling with the problem of privately developed student housing. Apparently, too many developers want in on the opportunities created by expanding enrollment at Virginia Tech. Town Council voted 7 to 0 recently, according to the Roanoke Times, “to be more selective whenever it receives requests for student housing projects.”

We commonly hear how the private sector is uninterested in building affordable housing. Yet in Blacksburg we see local government dampening developer enthusiasm for meeting the demand for student housing (much of which, I assume, falls under the rubric of “affordable.”) It is not clear whom Town Council sees as picking up the slack.

“It is extremely lucrative to build purpose-built student housing. It’s so lucrative that people will come in with these very large plans,” said Mayor Leslie Hager-Smith. “We have people expressing interest monthly.” Continue reading

Proffers: They’re Baaaaack!

Gentlemen may prefer blondes but localities prefer proffers.  A proffer is an arrangement between a locality and a land developer whereby the developer offers something of value in order to get a rezoning request approved.  Why do developers want land rezoned?  For residential development they want to build more homes on the land than the land’s current zoning allows.  Why would localities object to these rezoning requests?  Theoretically, the locality’s strategic and financial plans are based on providing services at an overall population density dictated by the current zoning.  Adding more density increases the locality’s costs for services like public schools.  Localities are understandably worried about the unfunded mandates that up-zoning can cause.  How do proffers help?  Items of value (money, land, astroturf, etc) are given to the locality by the developer in order to fully or partly cover the additional costs to the locality of development at higher density than was planned.  These proffers reduce the developer’s profit margin on the project at hand so they are not popular with the development community. Continue reading

The Black Home Ownership Conundrum

This map shows the white/black home ownership gap in U.S. cities with largest black populations. The lighter the circle, the smaller the gap. The percentages I have added in red show the black home ownership rate for Virginia’s three largest metros. Map source: Urban Institute

Numbers you’ll never see in Virginia’s SJW media: Virginia’s three largest metros — Washington, Hampton Roads and Richmond — have higher black home ownership rates and smaller white/black gaps in the rate of homeownership than most of the country. The map shown above comes from an Urban Institute study mapping the black home ownership gap.

Here is the breakdown by Virginia’s major metropolitan areas:

The data came to my attention today thanks to a Washington Post article discussing “The ‘heartbreaking’ decrease in black home ownership” since 2003. A key thesis is that “racism and rollbacks in government policies are taking their toll.” Continue reading

Hollowed Out Henrico

Photo credit: Richmond Times-Dispatch

Henrico County has a huge problem with encroaching slums that it has only recently begun to acknowledge and deal with. According to county data published in the Richmond Times-Dispatch today, 57,000 properties — about 54% of all parcels in the county — will be eligible to apply for a tax abatement program designed to combat blight.

The previous tax-abatement program applied only to property owners with homes assessed for less than $250,000 and older than fifty years. In a vote yesterday, the Board of Supervisors expanded the tax abatements, lifting property taxes on improvements for 10 years, up from seven, for certain residential properties, and making it easier for commercial and industrial properties to participate.

“We’re trying to boost up incentives for people to reinvest in their homes and build up neighborhoods,” said Director of Finance Ned Smither. “In general, we are seeing more commercial and residential properties that need to be more dressed up.”

Unfortunately, the cure may be worse than the disease. Continue reading

Progressives Perpetuating Poverty

Danny Cendejas, an organizer with La ColectiVa, addresses concerns about HQ2. Photo credit: Washington Business Journal

Amazon’s decision to scrap a $2.5 billion investment in New York City has emboldened far-left progressives in Northern Virginia to oppose the e-commerce giant’s plans for plans to build an East Coast headquarters in Arlington. Critics of HQ2 are targeting $23 million that Arlington County will contribute to the pot of incentives, reports the Washington Business Journal.

“The county should vote down the deal,” said Roshan Abraham, an organizer with Our Revolution Arlington in an anti-Amazon meeting Monday. One of the richest companies in the world does not need the county’s money, he said. “If Amazon chooses not to come to Arlington over $23 million, good riddance.”

A primary concern among leftist activists is rising rent. As 25,000 highly paid Amazon employees start working in Arlington, they will bid up housing prices. About 3,000 apartment units in Alexandria and Arlington between South Glebe and West Glebe roads could become unaffordable for the largely Latino community living there once Amazon moves in, say Amazon foes.

I sympathize to some degree with those who resent the incentives, including some $500 million in workforce grants from the state. Amazon is the world’s most valuable company, CEO Jeff Bezos is the world’s wealthiest man (at least until his divorce is settled), and the showering of massive tax breaks on Amazon is manifestly unfair. But the world is unfair, and the rational response is not to chase Amazon out of town but to craft a deal that is tax-flow positive for state and local government, and work to ameliorate negative impacts on housing and transportation. To do otherwise is to limit opportunity and perpetuate poverty. Continue reading

General Assembly Acts to Curb Evictions

by Richard Hall-Sizemore

Virginia has made another “top-10 in the nation” list. But this one is not one to be celebrated. Last spring, using national eviction data, researchers at Princeton University released eviction rate rankings of large cities in the United States. Cities in Virginia comprised five of the ten cities with the highest eviction rates. Those were Richmond (2), Hampton (3), Newport News (4), Norfolk (6), and Chesapeake (10). By going down a little further on the list to no. 15, one would find a sixth Virginia city, Virginia Beach.

These findings sparked a flurry of activity and commentary in the Richmond area, including Bacon’s Rebellion. The Center for Urban and Regional Analysis of VCU’s Wilder School set up a program, RVA Eviction Lab, similar to the Princeton program that produced the national report, to examine issues related to eviction in Richmond and has recently released a series of reports.

Perhaps most significantly, the General Assembly and the Governor have swung into action. Shortly after the Princeton report was issued, the Virginia Housing Commission took up the issue. The Housing Commission is one of those permanent legislative bodies established by the Code of Virginia for examination of specific areas. Its membership is drawn from both houses of the General Assembly. The commission recommended legislation dealing with about six primary issues. Those bills were introduced in both houses with a bipartisan set of chief patrons. So far, most of the bills have encountered no opposition, having been passed unanimously by the original houses in either their original or amended forms. Continue reading

Senate Addresses Supply of Affordable Housing

Affordable housing in Northern Virginia

One in three households in the state spends more than 30 percent of their income on housing, reports the Virginia Mercury. The apartment industry argues that housing will become unaffordable for even more as the state’s population grows faster than the housing supply.

If I were a middle-class Virginian most of whose net worth was tied up in my home equity, I expect I’d be particular about who lives near me. I probably would not be happy to discover that some developer wanted to build “affordable housing” next door. But my right to build a house on my own property does not entitle me to stop someone else from building housing on his property. Continue reading

A Crime-Fighting Experiment at Gilpin Court

Police patrol at Gilpin Court. Photo credit: Richmond Times-Dispatch

The Attorney General’s office is funding an interesting social experiment. On the theory that fighting crime requires addressing root causes over and above actually, uh, fighting crime, the AG is providing $1 million to fund programs designed to improve health, education and economic outcomes and strengthen neighborhood ties at the City of Richmond’s largest housing project, Gilpin Court.

“Instead of a top-down approach that tries to tell Gilpin what it needs, we’re going to bring together everyone who cares about this community and who has good ideas to reduce crime, strengthen the neighborhood, and improve quality of life for Gilpin residents, especially young people, said Attorney General Mark Herring, as quoted by the Richmond Times-Dispatch. “Greater Gilpin is going to reduce crime and make Gilpin Court safer by taking a more holistic approach and attacking the factors we know contribute to higher rates of crime, like poverty, drug use, limited educational or job opportunities, and poor health.”

The grant will allocate $187,000 to pay for additional police patrols in Gilpin Court, a project of 781 housing units occupied by about 2,700 residents. But the rest will go to hiring a full-time program coordinator and underwrite for programs identified through community meetings.

“Building stronger, safer communities means addressing the underlying factors that can contribute to violence and violent crime,” Mayor Levar Stoney said in a statement. “This initiative will build on the strengths of the community and empower Gilpin residents to have a say and a stake in the future of the neighborhood.”

The program encapsulates every liberal piety about the relationship between poverty and crime…. which, in my estimation, means that it is doomed to failure because liberal pieties about poverty and crime are misguided. While it is true that violent crime is more prevalent in poor neighborhoods, there has been very little correlation between changes in the rates of poverty and violent crime over the decades. The relationship between the two is tenuous and complex with many intervening variables.

One critical variable is the prevalence of families dominated by unwed mothers and the lack of consistent daily discipline provided by fathers, which results in a failure to enculturate young people with non-violent norms. Teenage boys roam free in Gilpin Court with few parental restrictions. They develop their own young, male, Lord-of-the-Flies subculture, which skews towards partying, substance abuse, petty criminality, an obsession with status among peers, and, often, violence.

To the extent that crime among male teens and young men is the outcome of rational calculation — weighing potential gains from crime versus the prospect of getting caught and punished — increased neighborhood patrols undoubtedly will be useful. Richmond police doctrine emphasizes the building of community bonds that engender trust with residences, so a heightened the police presence should have a positive impact. Conversely, while the funding of “community programs” may provide benefits to Gilpin residents, unless they interrupt the dynamic of fatherless boys, I am dubious that they will have any impact on crime.

I might be wrong, however. I’m not omniscient. Perhaps liberals have it right. Perhaps the program will be a smashing success. The fact is, nobody knows. That’s the point of conducting an experiment.

I’d be all in favor of conducting this particular experiment if it were set up so we might learn something from it. Ideally, the experiment would confirm or disprove the notion that addressing certain “underlying factors” by means of programs chosen through community input will reduce crime. Unfortunately by doing two things at once, both boosting policing and attacking root causes, the factors contributing to positive or negative outcomes will be hard to disentangle. If the program does prove to be beneficial, we are unlikely to learn anything from it because we won’t know whether the police or the community programs deserve the credit. In the absence of unambiguous data, liberals will continuing embracing their pieties, and conservatives theirs, everyone will continue believing what they always believed, and we will flounder about as always.