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Seven affordable condos approved on Norfolk Street in Dorchester
By adamg on Tue, 02/07/2023 - 1:44pm
Rendering by HDS Architecture.
The Zoning Board of Appeal today approved a plan by Habitat for Humanity to build a townhouse-style building with seven condos, all to be sold as affordable to buyers who would have to volunteer time to help put the building up, at Norfolk Street and Thetford Avenue in Dorchester.
The proposed building would sit on what are now three empty city-owned lots, and would have seven parking spaces.
The filing says the units, including one four-bedroom unit, would be sold to people making no more than 60% to 80% of the Boston area median income. However, Gerry Patton of Habitat for Humanity's greater-Boston office, said the group would ensure that buyers would have to pay no more than 30% of their monthly income for their mortgage, condo fees, insurance and taxes.
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Comments
What's the warranty on the
What's the warranty on the building materials?
This question isn't germane
This question isn't germane to this particular development -- but is there a statistical case for AMI-restricted affordable housing making any significant dent in housing affordability?
The data is sparse or hard to find a quick answer, but thinking it's some mix of the following:
I'm imagining that adding #2 + #3 + #4, it still laughably dwarfs #1, but I can't find the raw numbers to make that case.
** These are particularly weird cases, but it's a strange reality of these situations that makes me unsure of affordable condos/home developments being a good path VS just regular apartments where it's evaluated on an annual basis; it's awfully hard to thread the needle of living in Boston, making well below AMI, but still be able to save for a 5-20% down payment on even an affordable property.
There's a big leg up here to younger folks who have access to down payment $$ from relatives to game the system for these properties -- don't know enough to say it's widespread, but know at least one person who did this, so it's not an entirely made up phenomenon. They can't sell the property for much more than they bought it for, but if you buy a nice affordable condo in a hip neighborhood, then become well off and sit on it and just don't sell because an equivalent market unit would cost you $600K+, it's effectively removed from the math as "affordable housing" in effect.
This looks like a really nice
This looks like a really nice design!
It actually fits in
It actually fits in seamlessly with the rest of the buildings in the area. I'm impressed.
I don't think these units
I don't think these units make any large scale dents in "affordability" as in, overall prices or even overall number of units that can be purchased by those who are poor in the city. Overall prices are set largely by supply/demand rules and since these are essentially a separate inventory with its own pool they're not involved in the overall supply. There's also just not enough of them compared to the number of people in that sub-100 AMI for it to be a full scale solution to housing poorer people.
That said, your ** about point number 3 is actually the biggest benefit to these units. People buy them while they're poor and unable to enter the property market. Over time, hopefully, they make more money (promotions, education, kids get older and they're not paying for daycare) but their mortgage is still set at a very affordable amount so they begin to build wealth. At a certain point, hopefully, they have saved enough that they can start looking at the next step up on the property ladder, whether that's out of a 1 bedroom condo into a 3 bed triple decker condo or out of a 3 bedroom condo into a single family. Yes, they don't make any profit from the sale of the affordable unit, but they also get back what they put in - it's a glorified piggy bank you live in, that also allows you to save more because you're not dealing with your landlord taking all your money and instability in the rental market.
This is assuming of course that people are using AMI units as steps to build stability, not as an end-goal, but in my experience that seems to be the case - deed restricted units come up for sale from previous owners fairly often considering the small total number so there seems to be turnover.
Now you could make an argument that restricted units really should only be there to allow people to survive affordably until they meet some kind of net worth, but a huge amount of programs in this country take that approach to solving poverty and they don't really work. Someone can work hard and over 5 years go from making 80% to 90% AMI. But 90% AMI doesn't actually get you anywhere in the ballpark of being wealthy or even necessarily comfortable in this city, so if people were being evaluated year over year to make sure they were still under that 80% or they lose their right to their condo, that just actively disincentives people to accumulate things like savings, or a safety net, or to take a promotion, or a variety of things.
We see this with people who are on social security disability or a number of other "assistance" - they literally cannot accept a christmas present of 100$ from a family member, because that puts them over their income limit and suddenly all their support goes away - but that 100$ isn't going to suddenly cover all their bills their SS is supporting. The gap between being too rich for help versus rich enough to actually survive is just too wide so people default to staying poor.
Instead enabling marginalized and poor people to build wealth with these units is the only long-term path out of a cycle of poverty and I think the program works well for the people who're lucky enough to get in. Now what you could do is maybe do a reassessment every 10 years, or have some kind of time limit on the deeds, to ensure there aren't people paying 200k for a primo "starter affordable home" and then living in it forever.
Re: whether this works better than apartments: Affordable apartments are a good companion to this program in that they don't require ANY savings and so are a good bandaid for people who truly are living hand-to-mouth but even affordable apartments mean throwing your money down the drain of your landlord's pockets, with nothing to show for it after years of living there. Apartments are a good immediate solution to those at the housing crisis line and the ownership program is a good long term solution to the percentage of households in this city who have a family net worth of under 100$ because they cannot save or afford any owned assets. Possibly the best balance would be apartments for those making really, truly nothing - sub 40% AMI - with a program that helps them transition to the 40-80% AMI ownership goal as their lives stabilize and their finances get better.
That these units don't make
That these units don't make any outsized dent In affordability is my operating assumption, but I'm surprised how little data is available on the above points to evaluate it numerically.
I get the concept of the #3 owned units being a path for building wealth, but to put a real life scenario on it for a building I know -- 76 Elm Street, the old high school in JP. Deed restricted units are a hair over $300K, and a two person household is capped at ~$134K.
Bare minimum 3% down isn't too bad -- $9K -- but bundle in closing, moving costs, etc. you're probably looking at $12-15K all in for home buying. If you're keeping $15-20K in savings as an emergency fund on top of that like you should, then you're looking at having a solid $30-40K in the bank to make a purchase. The whole thing just seems more set up for "20-30 something Bob & Sally who each makes ~60K in their mid 20's who can get the help from relatives to make the investment, then can make six figures a few years later" than folks who top out at that income limit over their whole careers.
Once Bob & Sally are in, the market rate equivalent for the exact same ~1200sq. ft, 2bd.1/ba condo in JP is $700-750K, I don't see why they'd move out besides going full SFH-in-the-burbs; unless you're going to do that, there's not a strong reason to move, so it's effectively taken out of circulation.
If you look at down payments closer to 10-20%, it becomes even more comical for households on that income to have the amounts needed in savings, and the problem is only worse.
I know a couple people who've
I know a couple people who've bought in this program - they squeaked by with their down payment. They certainly didn't have an emergency fund after buying - one had to borrow money from friends and rack up credit card debt for several months after because it really did take every penny to get it done. But it was worth it because this is a path to home ownership and stability.
The idea of people having separate savings pool and then also saving up for their down payment is I think a little overly optimistic... even for Bob and Sally, two young 20-somethings renting in Boston early in their career aren't going to have 40k in cash savings. The program also looks at like a year's worth of bank statements and big gifts from family can disqualify you too. Now after the deed is signed I suppose young professional class people can get those family gifts for moving, furnishing, etc, but that's true of the destitute getting affordable apartments too - plenty of churches will scramble up some younger guys and secondhand furniture so setting some kind of rule where nobody can get any help before or after purchase seems like murky waters.
Honestly the solution here is to lower the caps if the idea is to hit those who don't have earning potential. Or do some kind of time limit on the deed that isn't year-by-year. I will say in my experience despite the legal requirements the affordable units are often the least desirable in the building - the ones without parking, ones next to the elevator motors, etc. There's motivation to move if you can now afford it after living in your piggy bank and have nicer options, or have a kid, or whatever.