Beyond the Moral Argument - PDF Free Download

Beyond the Moral Argument The Economics of Affordable Housing, Segregation & Equity DR. JANET L. SMITH Professor, Urban Planning + Policy University of Illinois at Chicago Co-Director Nathalie P. Voorhees Center for Neighborhood and Community Improvement LYNNETTE McRAE Manager Metropolitan Planning Council KING HARRIS Board Chair Illinois Housing Development Authority Senior Fellow Metropolitan Planning Council

Housing is affordable if you spend no more than 30% of income on housing costs.

Cost Burden: Renters 2001 2016 41% Crisis? Chronic! 47% 15 million 21 million

Cost Burden: North Cook County 100% 80% US 60% 40% 20% 0% Less than $20,000 $20,000 to $34,999 $35,000 to $49,999 $50,000 to $74,999 More than $75,000 Renters Owners

National Association of Home Builders The Economic Impact of Home Building in a Typical Local Area 100 rental apartments annually generate: $11.7 million in local income $2.2 million in taxes and other revenue 161 local jobs

Affordable Housing Shortage Stalls Economic Growth, Prices Out Workers The lack of available affordable housing is an economic barrier for 42% of US cities. The demand for survival services is a negative driver in 44% of major job centers. Local Economic Conditions 2017, National League of Cities.

Hourly Wage Needed to Afford a 2-Bedroom Rental Unit http://nlihc.org/oor

Hourly Wage Needed to Afford a 2-Bedroom Rental Unit North Cook County 3 to 4 workers at minimum wage http://nlihc.org/oor $24.04 60005 $24.42 60090 $21.54 60070 $24.23 60056 $25.19 60016 $33.85 60062 $30.96 60026 $21.92 60714 $25.96 60068 $26.35 60025 $22.31 60029 $33.85 60053 $30.96 60022 $34.04 60093 $24.62 60077 $34.04 60091 $26.15 60076 $34.04 60712 $30.96 60022 $28.27 60043 $33.46 60022 $31.73 60201 $28.08 60202 $24.62 60645

Rental Housing Gap Community area Supply Demand Gap % Met Winnetka/Northbrook 792 3,365 2,572 24% Evanston/Skokie 3,420 10,211 6,790 33% Arlington Heights/ Wheeling 3,122 5,436 2,315 57% Park Ridge/DesPlaines 5,330 9,075 3,745 59% Mt Prospect/ Elk Grove Village 4,328 8,595 4,267 50% Palatine/Barrington 1,929 4,934 3,004 39% Schaumburg 1,061 3,328 2,267 32% Hoffman Estates/ Streamwood 1,339 3,349 2,010 40% Total 21,321 48,293 26,970 44% Low-Income = $36,000 ($18.75/hr) Affordable rent = $910 / month Pay no more than 30% of income for rent https://www.housingstudies.org/research-publications/state-of-housing/2018- state-rental-housing-cook-county/

Current Home Values Housing Value Change Municipality 1970 2016 since 1970 Kenilworth $345,628 $930,052 169% Winnetka $355,552 $855,399 141% Glencoe $354,344 $831,571 135% East Dundee $209,097 $796,895 281% Northfield $334,559 $684,800 105% Wilmette $300,323 $586,982 95% Barrington $237,357 $567,508 139% Deerfield $283,980 $516,758 82% Inverness $252,400 $510,928 102% Northbrook $302,753 $501,187 66% Golf $240,096 $491,760 105% Barrington Hills $197,176 $433,204 120% Glenview $277,406 $425,151 53% South Barrington $184,019 $418,025 127% Evanston $243,831 $404,278 66% Skokie $240,101 $367,079 53% Lincolnwood $249,767 $357,087 43% Adjusted for inflation Metro Median = $229,900

Current Racial Mix White Black Asian Hispanic Other Population 942,721 61,139 188,465 274,200 29,733 Percentage 63% 4% 13% 18% 2% Change since 1980-223,307 34,320 153,386 232,334 24,109 Percentage Change -19% 128% 437% 555% 429% Region % 53% 16% 6% 22% 2% Hispanic or Latino, 2016 Only Evanston and Skokie have MORE THAN 10% of the population Black

Average Annual INDIVIDUAL Income Relative to the 7 County Metro Area 2016 UIC Nathalie P Voorhees Center for Neighborhood and Community Improvement

Average Annual INDIVIDUAL Income Relative to the 7 County Metro Area 1970 2016 UIC Nathalie P Voorhees Center for Neighborhood and Community Improvement

The Chicago MSA is 15 th in the WEALTH GAP Our richest 5 percent earned $245,949, while those in the poorest 20 percent earned $25,921 Brookings Institute 2018 https://www.brookings.edu/research/city-and-metropolitan-income-inequality-data-reveal-ups-and-downs-through-2016/

Growing Income Inequality in US Chicago MSA Gini Coefficient: Chicago MSA 0.48 US 0.45 http://www.governing.com/topics/health-human-services/gov-income-inequality-big-cities.html

Distribution of Family Wealth in the US, 1963-2016

Median Family Wealth by Race/Ethnicity in US, 1963-2016

Beyond the Moral Argument Inequality promotes strategies that are more selfinterested, less affiliative, often highly anti-social, more stressful, and likely to give rise to higher levels of violence, poorer community relations, and worse health. Richard Wilkinson, The Impact of Inequality, 2005:22

Beyond the Moral Argument The Economics of Affordable Housing, Segregation & Equity LYNNETTE McRAE Manager Metropolitan Planning Council

Our Process MPC s report on the economic impact of racial and economic segregation in the Chicago region March 2017 Policy Development In partnership with neighborhood groups, local advocates and national advisors Release policy recommendations to create a more equitable region May 2018 metroplanning.org @metroplanners

Driving Research Questions What does it cost all of us in metropolitan Chicago to live so separately from each other by race and income? What can we do to change patterns of segregation given its negative impact on issues of equity? metroplanning.org @metroplanners

What Does Segregation Cost Us? Lost income $4.4 billion in annual regional income Lost lives 30 percent more homicides Lost potential 83,000 Bachelor s degrees metroplanning.org @metroplanners

National Findings metroplanning.org @metroplanners

The Aftermath Catalyst for discussion and action Pushback on positives of segregation and negatives of integration Acknowledgment of racism and inequity as roots of segregation Framing of equity and inclusion - Focus on equitable practices will lead to equitable outcomes metroplanning.org @metroplanners

Phase II Overview MPC has now pivoted to the second question of the project: What can we do to change patterns of segregation given its negative impact on issues of equity? metroplanning.org @metroplanners

Putting Policy on the Map What policies can build inclusive neighborhoods in Chicago? Ground-truthing national policies in Chicago: What would work here? Local advisors and working groups input 25 in-depth interviews and 5 focus groups with people working in government, grassroots and community organizations, and private sector 100-respondent survey Learning trips to Seattle and Atlanta metroplanning.org @metroplanners

1. Targeting economic development and inclusive growth 2. Creating jobs and building wealth 3. Building inclusive housing and neighborhoods 4. Creating equity in education 5. Reforming the criminal justice system metroplanning.org @metroplanners

Strategies for Inclusive Housing & Neighborhoods Removing political barriers to affordable housing in high opportunity areas Conduct a regional assessment of fair housing Assess the impact of new and proposed development Property tax relief for affordable units across a range of neighborhoods Increase housing options by increasing CHA voucher subsidies Expand homeownership opportunities metroplanning.org @metroplanners

Other Examples from the Roadmap Adopt a Racial Equity Framework Adopt a City Earned Income Tax Credit Break the link between low incomes and incarceration Reform unfair, inaccurate Cook County property tax assessments metroplanning.org @metroplanners

Why Advancing Racial Equity Matters Billions in new tax revenue, increased safety, better health and personal savings Increased mobility and opportunity Diminished racial wealth gap Improved health and safety metroplanning.org @metroplanners

Beyond the Moral Argument LYNNETTE McRAE metroplanning.org/roadmap Lmcrae@metroplanning.org (312) 863-6021

Beyond the Moral Argument The Economics of Affordable Housing, Segregation & Equity KING HARRIS Board Chair Illinois Housing Development Authority Senior Fellow Metropolitan Planning Council

Expanding Affordable Housing in the Suburbs: What Can Be Done?

The Homes for a Changing Region Project: Lessons Learned 14 years of experience working with municipal leadership in 43 different Metro Chicago communities 43 forward-looking housing action plans created Focus on balanced housing to meet future shortages at all levels of the housing market Every community we worked with needed moderate and lower income housing! Focal points: Seniors who want to remain in their communities (Rental housing or Aging in Place) Younger families (Small single-family; townhomes) Transit oriented development including mixed-use

The Approach Attainable workforce housing Planning which looked at the big picture, not just a single development Involvement of city/village planners, committee members (housing, planning, etc), not just council members Mapping evenings with city/village residents Planning sign offs before a final meeting with the city/village council Cooperation, not confrontation!

The Result: Slow But Steady Progress The sharp housing recession 2007-2013 significantly impacted progress: From 30,000+ new housing units to under 3,000! Steps forward in many communities though no progress in others Educating current and future leadership important Having a progressive mayor or village president a big plus! A major opportunity: 230 suburban communities without a forwardlooking Homes for a Changing Region plan CMAP s Homes tool box available

New Approach Using Regional Housing Solutions Website Partnership between CMAP, MPC, MMC and IHDA Focus on immediate needs and some future needs Four meeting process Meeting one: Reviewing current research and understanding immediate needs Meeting two: Bringing in professionals with possible solutions Meeting three: Presentation of a final report with summary of issues and potential solutions. Final meeting: Focus on implementation

Additional Action Possible Proposals to IHDA for affordable housing development in opportunity areas Linking State funding for roads, water, EPA projects to a community action in the area of affordable housing (a QAP system) At IHDA, eliminate QAP points for local support for projects which are consistent with consolidated plans (a MPC proposal) Provide property tax relief for owners of multi-family properties that include a meaningful number of affordable housing units new and rehab (another MPC proposal)

Additional Action Possible (CONTINUED) In North Cook County and Lake County, focuses on opportunities on unincorporated land Permit accessory dwelling units Local real estate transfer taxes to enable government free affordable housing development Winnetka as an example: A 15% inclusionary zoning ordinance would impact 15-30 new housing units in PUDs over 20 years, this on a base of over 4000 dwelling units. Subsidy dollars needed - $600,000 to $1,200,000 over 20 years. Systematic housing code enforcement to maintain existing rental units

Possible Government Action Federal Action: Increasing 9% tax credits More outright housing grant dollars (reduce the mortgage exemption down to $300,000 would sharply increase HUD dollars) Affordable housing as part of a new federal infrastructure program Focus: Aging multi-family developments Directly link supportive housing service dollars to construction dollars State Action: Limited given the budget crisis Allowing rental licensing in non-home rule communities (a preservation issue)

Current Barriers to Affordable Housing Development Escalating construction costs Development cost of an average multi-family housing unit approved by IHDA = $300,000+ In some cases, IBC plus Lack of affordable housing developers School impact fees (1 in 4 rental units have kids!) Zoning issues Nimbyism Still there!!