This editorial in the WP lays out the workforce housing situation quite well. One thing the author does not do is identify solutions, beyond calling for government subsidies.
Having done the math, Lerner, like other developers, feels little incentive to build large quantities of smaller, affordable units for which profit margins per unit are much slimmer and for which always-variable absorption rates must be much higher. Developers also know that affluent buyers are less affected by volatility in interest rates and employment.
According to MacGillis’s report, Lerner’s managing director of construction, Peter M. Rosen, offered a concise, unambiguous explanation of the developer’s thinking: “We respond to the market. The company would be willing to build more and smaller units if you guarantee the market.” Fairfax County, MacGillis reported, had envisioned another scenario but “wasn’t exact enough in its demands: It extracted an agreement only for a minimum number of residential square feet, not of housing units.”
Affordable housing is not an isolated issue. Across the country, communities are facing this crisis; solutions are elusive, as the free market tends to build to the widest market.
What type of subsidies would be effective? Build subsidized housing? That hasn’t worked. Force developers to build a certain percentage of “affordable housing”? Bah. The governments forte is neither economic development nor property management. I believe that the private sector must create a solution, as government’s inherent inefficiency and lack of integrity disqualifies it.
One of my goals this year was to write more about solutions than problems. I don’t feel bad saying that this issue confounds me.
Slashdot surprisingly has a commentary about affordable housing.
The problem for people who got to the game too late to get a house cheap is that it’s almost impossible for us to own homes. First and foremost you have the cost: Home prices AND rents have been spiraling ever higher, but wages have not. So while we are making money, what little we can save after paying outrageous rents hardly makes a dent in the downpayment we would have to pony up just to get a mortgage at a reasonable rate.
The second of course is job security. Owning a house doesn’t make any sense if you aren’t going to be in the area more than 5 years, but how many of us here can say they have a job secured in their area for that long? If you sell it before is up, all the interest and fees would have made it hardly worthwhile….
The part about the jobs is an excellent argument for Albemarle joining TJPED, economic development partnership whose goal is to court good businesses – if we bring in more low-impact, high wage businesses, we all benefit.
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