Secession: the key to more affordable housing in cities?

By Judy Park, Analyst

Panelists at The Atlantic’s CityLab 2014 conference, held this past September, proposed the idea of home rule – or even more radically, city secession – as a potential solution for increasing affordable housing in cities.

aff housing solution home ruleClick ­­­­­­­­­here for the full article.

During the event, Vishaan Chakrabarti of SHoP Architects and Ben Hecht of Living Cities argued that state and national governance often restricts the ability of cities to produce more affordable housing. The solution, they claim, is to emancipate these cities and allow them to subsidize as they please:

“Subsidize the supply, subsidize the demand: We know how to do all of those. We just don’t have the will to do those things,” said Living Cities CEO Ben Hecht. “Singapore and Hong Kong are willing to do those things.”

The thought that cities would be more effective if left to their own devices is not new. In a time where urbanization is widening the physical and sociopolitical discrepancy between the city and its surroundings, and where cities are increasingly outpacing the GDP of entire countries, it makes some sense.

But good governance is tricky and inevitably context-specific. Home rule could be exactly what that blue bastion in a sea of red needs to build more affordable housing. Unconstrained by state and national regulations, a city could more easily raise and borrow money from their tax base and capital markets. It could vote to direct more money to affordable housing needs.

In other instances, however, the state’s ability to override local priorities and decisions is important and beneficial for affordable housing, as in the case of Massachusetts’ Chapter 40B, a statute that allows an affordable housing developer to obtain state zoning overrides for building in municipalities that fail to meet their 10% affordable housing requirement.

Further, in choosing Singapore and Hong Kong as their poster-children, the panelists seem to imply that the production of mass public housing indicates success: in Singapore, 82% of citizens live in flats built by the government (via the Housing Development Board, or HDB), and in Hong Kong, this figure is slightly less than half.

But all is not well, especially in Hong Kong, which still suffers from a high shortage of public housing and recently won its fourth successive crown for having the most unaffordable housing in the world. Supply may be high, but demand is even higher. Those who are able to qualify for a government flat typically wait three years or more. In the meantime, many residents have no choice but to live in grossly overcrowded units, which have been referred to as cages, that average around 40 square feet. Such housing may technically qualify as “affordable,” but it is certainly not suitable.

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Soaring, high-density public housing in Hong Kong.

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Society for Community Organization, a local advocacy group, documents the conditions in the cage homes of Hong Kong. Photo by Benny Lam, for the Society for Community Organization.

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Indonesia photo-share: self-help housing in Depok

By: Duong Huynh, Project Manager

As part of the housing sector mission to Indonesia, I joined another colleague Matt Nohn, whose work focuses on incremental housing, and a team of staff from Indonesian Ministry of Housing to visit Depok. After a 1+ hour drive through some peaceful Indonesian peri-urban farm land, we landed in Depok to begin our tour of a few of the city’s self-help housing project.

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Self-help housing belonging to a family of one working mom and three daughters.

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Corrugated metal roofing, with wooden supporting structure.

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Kitchen area, with some ventilation via hollowed tiles installed near ceiling – a very typical feature of Southeast Asian homes.

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Bedroom wall. Cement bricks are exposed with no wall finishing. Dust from unfinished walls and floor affect air quality within the home. Thankfully, the home has good cross ventilation.

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Squatting toilet and water basin in bathroom. Clean despite need for further finishing.

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Working TV – an indispensable part of the home, despite each family’s financial status.

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Homeowner, in purple, washes clothing for a living. With the government’s self-help grant, she was only able to finish the structural part of the home. Asked whether she would prefer a smaller, but finished, home, she states the need for larger space because of her three daughters.

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Clean and paved path within the neighborhood.

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Paved road allows motor vehicles to easily access the neighborhood.

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Within the neighborhood, villas intermix with middle and low income housing.

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Another self-help housing unit. Smaller, but with more internal finishing.

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Internal finishing of second self-help home. Due to narrowness of land plot, this home has poorer ventilation.

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Bungalow style community classroom next to the second self-help home. There is a tangible air of community cohesion in this neighborhood.

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View from the back of the second self-help home. Many of this peri-urban/rural homes are located in favorable areas, with good access to infrastructure and natural landmarks, such as this stream where village men have set up fishing nets.

What we’re reading: Rebuilding Gaza

Addressing ecosystemic housing challenges and gaps – which all cities and countries face – is difficult when the housing units themselves are destroyed. What we’re reading this week – a recent report from the global humanitarian response coordinator Shelter Cluster on the situation in Gaza – reminds us of the tragedy of both natural and, in this case, man-made disasters that cause people to lose their homes.

Although the cease-fire between Israel and the Palestinian Authority has been in effect for nearly a month now, the region is just now taking definitive steps toward rebuilding Gaza after the most recent conflict. According to Shelter Cluster’s recent report (available for download as a pdf here), 17,000 housing units were destroyed in the most recent conflict between Israel and Palestine. This is on top of 5,000 housing units still in need of repair from prior conflicts, as well as a general shortage of about 75,000 units. These numbers include residential buildings only, without taking into account the schools, power plants, and other public infrastructure damaged during “Operation Protective Edge,” Israel’s latest military operation in Gaza.

Much of this housing shortage can be attributed to restrictions on importation of cement, aggregate, steel, and other building materials into Gaza. Past use of these materials to construct the tunnels between Israel and Gaza has made the Israeli government reluctant to allow further importation, so oversight of the use of these materials has been a major point in the recent negotiations between Israeli and Palestinian authorities.

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A Palestinian woman in the rubble of her home, destroyed in the conflict this summer. Credit Said Khatib/Agence France-Presse — Getty Images, New York Times.

Despite Shelter Cluster’s grim prediction that it will take 20 years to rebuild Gaza after this most recent conflict, journalists report that talks between Israeli and Palestinian authorities about rebuilding have been positive. Last week, the UN revealed the details of a temporary deal regarding construction struck late on September 16. As the New York Times reported:

“…Robert H. Serry, the special envoy for the Middle East peace process, told the Council that he hoped the deal would lead to a broader agreement on opening border crossings to Gaza and on ending severe restrictions on imports to the Palestinian territory, where the economy was stagnating before the 50-day war this summer.

The Palestinian Authority, led by President Mahmoud Abbas, will have “a lead role in the reconstruction effort,” while United Nations monitors will ensure that reconstruction materials are not “diverted from their entirely civilian purpose,” Mr. Serry said.

…“Arriving at this agreement has not been without its challenges,” Mr. Serry said, according to a prepared statement. “We consider this temporary mechanism, which must get up and running without delay, as an important step toward the objective of lifting all remaining closures, and a signal of hope to the people of Gaza.”

Unfortunately, housing is just one of the issues Palestinians will face as they seek to rebuild Gaza. A recent World Bank report details several obstacles, including restriction of movement, economic recession, and an energy crisis, which will have to be dealt with before Palestine is able to build a resilient economy.

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Photo Report: Three Days in Ulaanbaatar

By: Anya Brickman Raredon

AHI has been working with the World Bank and Municipality of Ulaanbaatar, Mongolia to develop an affordable housing strategy for the rapidly growing city.  In late-August, David Smith, our CEO and Founder, and I took a three-and-a-half day trip to present the results.  Fortunately we got a little bit of time away from our meetings to see the city and visit a ger area neighborhood – their term for the informal settlements. What follows is a bit of a photo tour with some interspersed musings.

Located in a high valley at the intersection of two rivers, Ulaanbaatar has some of the worst air pollution in the world, in part due to coal heating in the winters. According to the city masterplan, both rivers have protected buffer zones along their banks, although new apartment construction is edging very close on the south side of the valley.  10534525_10100612341304914_7619381653213947338_n936681_10100612341349824_5668957290735238999_n

Downtown Ulaanbaatar is a striking collection of soviet style apartment blocks, yurts, and modern glass towers all sitting right next to each other. There’s even an amusement park in the middle of downtown.10569050_10100606082482644_1606306620005765474_n                 10593150_10100612341424674_2564284688276477326_n  10629839_10100612341629264_7146385909691851264_n                  10474839_10100606076444744_4868540471071979280_n  10610547_10100612341150224_5811294750562497487_n

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What we’re reading: “‘Poor Door’ in a New York Tower Opens a Fight Over Affordable Housing”

Where is the line between incentivizing private-sector development of affordable housing and subsidizing (or promoting) more discriminatory, exclusionary housing practices?  Like many big cities, New York is trying to find out. One of its most recent gray areas is 40 Riverside Boulevard, a 22-story mixed-income development in Manhattan that was built under an inclusionary zoning program and will include a separate entrance – a so-called ‘Poor Door’ – for the low-income or subsidized renters. Read more in the excerpts below or in the full article in the New York Times.

The so-called poor door has brought an outcry, with numerous officials now demanding an end to the strategy. But the question of how to best incorporate affordable units into projects built for the rich has become more relevant than ever as Mayor Bill de Blasio seeks the construction of 80,000 new affordable units over the next 10 years.

The answer is not a simple one. As public housing becomes a crumbling relic of another era, American cities have grown more reliant on the private sector to build housing for the poor and working class. Developers say they can maximize their revenues, and thus build more affordable units, by separating them from their luxury counterparts.

…….But Alicia Glen, the deputy mayor for housing and economic development, said that separate front doors were not in keeping with the administration’s principles of equality, and that the city was working to change the rules to prohibit them. “Walking into a building should not be any different based on income status,” Ms. Glen said in an interview.

It’s a difficult issue that has divided even members of the affordable housing community. But what do you think? Should developers be able to use separate entrances for market-rate and subsidized apartments? If it is not okay to have separate entrances for apartments, is it okay if the market-rate units are condos? Read the full article on The New York Times website here and let us know what you think in the comments below!

South Korea: Finally shifting away from a centuries-old housing system

by Judy Park, Analyst

South Korea’s primary housing system, called jeonse (or “key money”), dates back to their Joseon Dynasty. That is, back when the denizens of this humble country looked like this:

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King Sejong is not amused.

Jeonse is one of only two systems of its kind in the world (the other being rahn in Iran), where renting out a modest two-bedroom unit entails the lump sum possession of hundreds of thousands of dollars.

The process goes thus: tenants provide landlords with this hefty deposit to lease a unit for two years. The deposit is calculated as a certain percentage (typically 40-60% in Korea, 20% in Iran) of the value of the unit. The landlord can then invest these funds (e.g. in other properties, businesses, or at the bank) until the end of the two-year contract, when they must return the full sum to the tenant. The unit acts as collateral in the event that the landlord can’t or won’t pay it back. Estimates show that about a tenth don’t.

If interest rates are high, jeonse is good deal for landlords – it’s basically an interest-free loan. If they’ve got the cash, it’s a good deal for tenants – they can live in a unit rent-free and continue to save up money.

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An average, middle-class apartment in Seoul. Source: HanCinema

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An average, middle-class apartment in Seoul. Source: HanCinema

But getting the cash is no easy feat. The typical deposit is a casual $200,000, taking the average household five years and boatloads of fiscal restraint to save up. Despite this, it seems that much of the nation’s families are up for the challenge, as more than 60% of rental units are currently held under the jeonse system. Thus, jeonse units constitute the main source of affordable housing for low and middle income families in the country.

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Connecting the dots : Urban Resilience and Affordable housing

 By Eman Lasheen, Harvard Graduate School of Design.

Affordable housing has always been looked upon as a supplementary service provided for a certain population. It is generally defined as housing that is appropriate for the needs of a range of very low to moderate income households and priced so that these households are also able to meet other basic living costs such as food, clothing, transport, medical care and education. As a rule of thumb, housing is usually considered affordable if it costs less than 30 percent of gross household income 1. The core value of investing in the provision of affordable housing is usually related to meeting a growing demand in the fastest, most efficient and inexpensive form, to alleviate socioeconomic burdens. Despite the importance of this highly materialistic perspective, it strikes me as quite lacking to account for higher, more complex interactions at the urban level, where positive impacts of affordability are manifested most profoundly. The connection between the availability of well designed affordable housing and the level of urban resilience is highlighted dramatically during times of crisis or unexpected change. The fact that people would find decent shelters during disasters or sudden shocks is not the only aspect of connection. It is the understanding of how urban communities are able to prioritize, plan and move forward that makes affordable housing a crucial aspect of urban resilience.

One major problem with resilience as an evolving field of research is the ambiguity around its components and intentions. Rooted in ecological sciences, the term has gained a lot of prominence within many other disciplines including engineering, social sciences and urbanism. It has been adapted within each of these disciplines to inform about a certain form of interaction. It remains however confusing to a great extent when it comes to urban sciences, where question such as : “resilience of what ? to what ” becomes a great source of trouble to practitioners and decision makers alike.

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