Thursday, September 29, 2005

Home-Ownership: Not Just for the Rich and Famous Anymore?

Continuing on the middle class housing squeeze, the Times has an interesting trend piece today about how programs to help middle income people buy homes have proliferated around the country. There are some good anecdotes in the piece, but with no attempt to quantify how many people have benefited or might benefit – not even in a single city where the programs have already been implemented – renders the article less than convincing. Nonetheless, here’s one program I find pretty encouraging:

Investment funds totaling $190 million have been created in the past year in Los Angeles and San Diego Counties for the purpose of building middle-income housing in so-called urban infill areas that have access to public transportation.

The funds' manager, the Phoenix Realty Group, expects to finance more than 3,000 homes in the next five years. As in many work force projects, the builders will be allowed to construct more units than typically permitted under zoning laws. The "density bonuses" enable the developer to make up the lost profit on each unit by selling more of them.

This strikes me as precisely the right way to go about providing home-ownership opportunities for middle income people: investment funds incentivizing developers to build higher-density housing around public transportation. This is killing a bunch of birds with one stone: reinvesting in urban cores, cutting down on the need to drive and consume gas, creating vibrancy and density to support further commercial investment, and hopefully relieving pressure on exurban sprawl.

The article doesn't report out what programs are being implemented in New York except to say that zoning variances have been offered to developers if they include moderate-income housing in their plans for Greenpoint and Williamsburg. That's like throwing a few bricks into the Grand Canyon.