Affordable Housing Institute : US

[Previous months in review available here: Oct, Sep, Aug, Jul, Jun, May,  Apr, Mar, Feb, Jan-06, Dec-05.]

 

 

In America, November is election month, so naturally coverage thereof dominated our postings, starting with an overall perspective on The Democratic Congress: implications for affordable housing,

 

This is good news for affordable housing, because affordable housing normally ranks higher among Democratic priorities than Republican ones, and with few exceptions, the incoming House Democratic committee chairs are much more knowledgeable about affordable housing and more positively disposed toward it than their Republican predecessors.  It is also quite generally a shift in the House’s emphasis from rural to urban voices.

 

Even if relatively little change is enacted, the issues of affordable housing and urban infrastructure are likely to command substantially increased visibility.

 

Five areas likely to see greater (and different) emphasis will include:

 

Can we see the shape of the hand?

 

GSE regulation, public housing (see Web Update 55), the HUD inventory, workforce housing (see Web Update 58), and housing tax credits. 

 

I looked at the possibility of GSE regulatory reform in more depth in Will the lame duck fly? 

 

Among those certain to have been cheering the Democrats’ recapturing of both houses of Congress must have been the two GSEs, Fannie Mae and Freddie Mac, for the result dramatically changes the political calculus of their future regulatory structure. 

 

Or has it? 

 

 

That depends on whether the lame duck flies.

 

Those reflections, and explaining them to others (such as the English) who lack The three levels of government: Federal, state and local, motivated some theorizing about the relative roles of each in The Federal-state-local boundary:

 

Last month, I posted about the three levels, and their natural affinity for one of the three principal actors in affordable housing:

 

·         National = capital (efficiency, scale, incentives)

·         Regional = people (consumer demand)

·         Local = property (use, density, taxation)

 

Most programs — probably all, now that I come to think about it — interact with all three. 

 

So who should do what? 

 

Who’s got it?  Have you got it?

 

I then zeroed in on what cities and towns can do in Affordability: the local menu.

 

Locals can aim more precisely

 

Matters English featured frequently, starting with its former colony South Africa advancing its bankability frontiers, and back in England, the predictable but nevertheless enormous consequences of economic liberalization in If you wave money they will come:

 

As Europe experiments with its weak-tea version of federalism (or more precisely, with its twenty-first century version of the Articles of Confederation),

 

They didn’t work very well.

 

it is discovering that no matter how many provisions one writes into one’s (rejected and now-abandoned?) proposed constitution, people do what is in their interest, and markets move faster than governments.  As a result, national entities must cope with problems that are orders of magnitude larger and more complex than they had tidily envisioned, as illustrated by this story from the Times of London:

 

Almost half a million Eastern Europeans have applied to work in Britain over the past two years, according to Home Office figures released today [22-Aug. — Ed.]

 

Housing dynamics figured in my talk at 11 Downing Street:

 

The point is that when problems are complex, solutions are likewise complex, meaning they are not simple.

 

“For every complex problem there is an answer that is clear, simple, and wrong. “
H. L. Mencken

When problems are complex, solutions must likewise be complex, meaning they are not simple.  

 

Placemaking takes time, money, vision, and consistency.  There are no short cuts.  The tea steeps at its own pace.

 

 

Placemaking takes more time than any election cycle.  That’s why the best programs are those sustained over 2-3 administrations.

 

This too baffles and thwarts many a policymaker.  By the time housing has become a major electoral issue — as it is in many US cities and has been for some years in the UK — most of the things that make good policy sense will pay dividends only after the next election.  Officials who want housing results must either (1) make the hard choices early in their administration, or (2) grit their party’s teeth and announce measures knowing the return of political capital will be deferred. 

 

The last guys who waited until the primaries got defeated

 

Taking advantage of being in England, I followed up by examining a UK innovation we could use here, Stock transfer case study: Part 1, the stock and Part 2, the proposed transfer.  Finally, no visit to England could be complete without paying homage to the varied monographs of the world’s foremost affordable housing financial consultant, briefly summarized in The case book of Sherlock Holmes:

 

 

In the two years since Sherlock Holmes opened his pro bono cyber-consultancy on housing finance, he has commented prolifically on topics ranging from World Bank pipelines to the dangers inherent in excessive zoning.  So forthcoming has Holmes been, in fact, that Watson as his humble biographer has at times despaired of organizing the Great Detective’s wisdom.  As we tuck into our Thanksgiving dinners, among those most grateful is Dr. John H. Watson, for whose relief we present this organized compendium of Holmesiana.

 

Elections also influenced the eminent domain terrain, as reported in Kelo’s election score card, and explored in Eminent domain: damned if you don’t?  Eminent domain also figures in the ongoing saga of two ion-dollar battles in New York City:

 

·         Brooklyn.  We explored the gargantuan redevelopment proposal of Atlantic Yards, Part 1, the property, Part 2, the benefits, and Part 3, the public.

·         Manhattan.  Stuyvesant Town hurtled toward a sale in B$b: Part 9, the selling banns, and Part 10, the residents’ imperatives.

 

A bridge and a lot of money run between Brooklyn and Manhattan

 

The preservationists have to get MetLife back to the table.  They can do this in three ways:

 

1.       Create credible legal arguments.

2.       Stir up a political firestorm.

3.       Dissuade the buyer from proceeding.

 

If the preservationists are smart, they will seek to do all three.

 

 

For the sellers, speed is essential. 

 

They plan to complete the deal in a month — three times faster than most buyers close on a single-family house.

 

We’ll see. 

 

“MetLife really enjoys seeing its name in the paper.”

 

If the buyer closes by mid-November, then I’m wrong, and the residents will have next to no leverage.  But if the closing starts slipping, as I expect it will [It didn’t — Ed.], we may find some very curious and complex realignments of interest among seller, buyer, and various residents groups.

 

Markets beyond the Big Apple moved too, as explored conceptually in Are home sales good for neighborhoods?, and more practically in The housing market’s crumple zone: Part 1, and Part 2:

 

Thus, the home ownership markets are already adjusting four different ways — in sales of homes, the shape of sales prices, delivery of new supply, and the cost of capital.  While some of these, like the individual home prices, may have rocky landings, the market as a whole is shifting through its crumple zone.

 

Even housing crash-test dummies can survive.

 

We also had a little fun with a market that stays high no matter what: How high is up?

 

Even as we see skidding home prices in some markets, others seem to defy it.  How high is up?  What are the buyers smoking?

 

“I suffer for science.”

Perhaps, as reported in the Treasure Coast Palm, it’s not what the buyers are smoking, it’s what they’re growing.

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