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Affordable Housing as Infrastructure

Paris streetOver the last two years, I have been speaking locally and around the country about affordable housing. My focus has been on the exploration of affirmatively furthering fair housing and disparate impact, through analysis of case law development. One of the themes that has become clear is the need to look at housing as part of our infrastructure. The way to plan for equitable neighborhoods is to plan for affordable housing in neighborhoods with access to good schools, grocery stores with fresh fruits and vegetables, quality public transit, and job opportunities.

The Department of Housing and Urban Development (HUD) has offered a template for jurisdictions that must now prepare an Assessment of Fair Housing. The goal is to reduce patterns of segregation and identify barriers to fair housing. Currently, Oregon prepares a similar document – the statewide analysis of impediments. The 2016 draft identifies inclusionary zoning as a barrier to fair housing. Inclusionary zoning involves the requirement for setting aside a percent of newly constructed units at HUD levels of affordability for rent or sale (usually for households that qualify as earning 60-80% of annual median family income), often in exchange for an incentive such as a density bonus. Inclusionary zoning is only one tool for increased integration of low income families into good neighborhoods.

But, what recently struck me was a day-long conference about the intersection of public health and housing hosted by Housing Land Advocates (HLA) and its clear recognition that affordable housing is a piece of the communities infrastructure. Just like a lack of adequate sewer systems will lead to adverse public health and safety effects, adequate, safe and affordable housing is a prerequisite to a healthy and safe populace. The conference highlighted in stark terms the effects of poor housing on public health. Materials from the conference are available on HLA’s website. While the speakers’ testimony clarified the problems and crystallized the connection between health and housing, the day ended with hope.

Hope, in the context of housing, always comes down to funding. Jes Larsen of the Welcome Home Coalition, presented tools for how communities, and in particular Oregon, can fund affordable housing.

  • Developer Impact Fees are imposed by local governments on new development (commercial and residential) for the cost of providing new public services and infrastructure such as sidewalks, schools, parks and affordable housing. Linkage Fees are a type of development impact fee charged specifically for the cost of affordable housing, often based on jobs and housing nexus studies. This is the most common revenue source dedicated to affordable housing and services.
  • As a luxury or tourist tax on dining out, a Restaurant Tax charges diners a small tax on the total bill. The tax can be limited to large restaurants growing a certain level of sales and with a liquor license.
  • A Document Recording Fee is charged for the administration of recording property deeds and mortgages, most often administered by county jurisdictions. A surcharge can be added to the administrative fee to generate income for a jurisdiction’s general fund or set-aside priorities such as affordable housing. Oregon counties currently collect a document recording fee for the state, and a portion is dedicated to affordable housing. Under Measure 79, local document fee surcharges are not permitted and state legislation would be necessary to increase the existing fee, which generates about $12 million for affordable housing throughout the state. Perhaps it’s time to raise the fee.
  • General Obligation (GO) Bond revenue, once approved, is available in full, and is repaid by the municipal issuer through taxation of the jurisdiction’s property owners. GO Bonds require voter approval of the tax increase and must be reapproved, often every other year. GO Bonds can only be used to fund public infrastructure, not public services.
  • An annual Business Registration Fee can be charged for the permission to do business with a particular jurisdiction. The fees can range according to the size and type of business. While all organizations must register, organizations with income tax exemption do not pay the fee.

As you can see, these tools – particularly developer impact fees, linkage fees, and General Obligation bonds – are couched in the context of affordable housing as infrastructure. This conceptualization of affordable housing as infrastructure may be just what planners will need to start thinking about if the California Building Industry Association is successful in its writ of cert to the United States Supreme Court in the California inclusionary zoning case.

I will be speaking next on the intersection of affordable housing and planning in an ABA webinar on January 26, 2016.

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