Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Tuesday, August 27, 2019

The Brightwood fire as an example of the need for the legalization of a wider range of housing types

Photo from DCist.

Don't know if you heard about the terrible fire on Kennedy Street, an illegal rental, marketed to Ethiopians. The place was divided into a warren of bedrooms, for which residents paid about $300-$350/mo. each, for a room not much bigger than a bed. The house wasn't set up as a legal rental.

Two people died in the fire. And there are lots of stories about it. The mayor is calling for a criminal investigation, etc.

-- "Two People, Including A 9 Year Old, Were Killed In A Fire In An Unlicensed Rental," DCist
-- "Rowhouse where fire killed man and injured child was not approved for rentals, city officials say," Washington Post

To me, it merely reiterates my point that we need to provide different kinds of housing -- a much wider range-array. 

People are desperate.

It would be far better to support the provision of supermicro units in a legal and safe fashion. And that when we don't, we end up with what happened.

Yes, the property owner took huge risks and shouldn't have. But the market can push people in that direction.

 And it happens in other markets with similar conditions, like NYC and London. Probably SF, although they have a serious regulatory regime there. Etc.

-- "The woman who lives in a shed," Guardian
-- "Housing raid finds 26 people living in three-bedroom east London home," Guardian
-- "Man found living in 'coffin-like' cupboard in east London," Guardian

2. Sometimes, besides the promise of extranormal profits, people rent houses illegally because the cost to prepare and maintain a rental unit is high*, especially if it is subject to rent control.

-- "Deeper thinking needed on housing," 2012
-- "Gulyani Sumila, Bassett Ellen M. 2010. “The Living Conditions Diamond: A Theoretical and Analytical Framework for Understanding Slums.” Environment and Planning A 42 (9): 2201–19.

Gulyani and Bassett identify four elements shaping the provision of housing in "slums" in what they call the "living conditions diamond."
The Living Conditions diamond, Nairobi

-- "Benjamin Marx, Thomas Stoker, and Tavneet Suri. "The Economics of Slums in the Developing World," Journal of Economic Perspectives, 27:4 (2013)
-- "BLAKE GUMPRECHT. "FRATERNITY ROW, THE STUDENT GHETTO, AND THE FACULTY ENCLAVE: Characteristic Residential Districts in the American College Town." Journal of Urban History, 32:2 (2006)

Note that I think the literature on Third World slums, which refers to both large districts and the housing within, is relevant to the developed world, especially in terms of the dynamics behind slum "dwellings," "student ghettoes," etc.

For high income neighborhoods and renters, this is less of a big deal, because housing in such neighborhoods commands top rents, and therefore the cost of compliance, while high, is much less than the revenue that will be received.

In areas where renters are less well off, there is greater chance of nonpayment, turnover is high, buildings are subject to extranormal abuse, etc., it's tough to make renting pay.

But it can, at least for awhile, especially if you don't reinvest in maintaining the property.

By contrast, in high income neighborhoods, after initial costs of preparing a dwelling for rent, the average maintenance costs are likely lower, compared to housing in low income districts.

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* We are doing this now.  Granted many of the things we should have done awhile ago, just as normal maintenance of a house.  But you let things go.  But some of the things required for renting, we wouldn't have done, such as storm windows on basement windows, which is an extra expense of over $2,500.

All told the prep costs will be around $9,000 (and that's with an extremely low priced handyman--the same work would likely cost double if sourced elsewhere.)  It will take  more than a year before those costs are recovered.  (Granted they are deductible expenses, although some have to be amortized.)

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7 Comments:

At 11:21 AM, Anonymous charlie said...

This is the dilemma on group/SRO/ultra-cheap rentals.

(and why we also moved away from them).

They are rat-traps. Very hard to provide service at those prices w/o compromising on health and safety.

350/m is about $11 a night. I'd say that is at least an order of magnitude cheaper than the cheapest hotel in DC ($100 a night).

You are seeing this a lot in the suburbs -- 8 hispanic guys in one room. Or student housing.


And to tie back to the homeless issue, I'd say 75% of the street people could not afford 350 a month. Yes if you are employed you could swing it.

And in terms of funding silos, sure it would be cheaper than running shelters. But you won't see that money.

And of course in DC not just a homeless/immigrant issue -- two two kids died in a fire-trap on R st a few years ago.


But yes I'd rather see the Affordable housing fund going to this.


 
At 1:09 PM, Anonymous Richard Layman said...

Right. Not affordable by poor people. So it has to be subsidized. Which is better than having people camp on the streets or dead from smoke inhalation in substandard housing.

WRT your point about moving away from SROs, this is an issue in Vancouver, where a particular family owns tons of poorly maintained SROs.

As you have mentioned many times, because the housing supply is constrained here, Class B and C and D housing is still very expensive.

2. WRT your suburban example, before the GFC, when you'd look at houses in my area, the basements were renovated, with as many as three bedrooms, but no kitchen, as that element isn't legal. I joked about them being for rooming houses for immigrants, because the typical DC household doesn't "need" that many bedrooms.

Now not so many bedrooms, but pretty much every gut rehab in our area has a fully finished basement.

 
At 1:10 PM, Anonymous Richard Layman said...

So Others Might Eat runs a bunch of SRO. I kept trying to reach them a couple years ago to do a story, but they never ever got back to me despite multiple attempts at contact.

 
At 1:49 PM, Anonymous charlie said...

Again a silo problem.

I don't see anything like SRO in the menu of federal programs.

https://www.naco.org/articles/affordable-housing-federal-programs-and-legislation


You could probably do it as section 8, but that leads into the problem of waitlists and also building them in the first place.


Again, DC is rich and state-like enough that they have a fund of money that could do this. But they would rather not. Given the subsidies it would go quickly.


Let's say 300/m for SRO, real cost is more like 1200 a month. 900 a participant a month, about 10K a year. That is $10M a year for about 1000 people, probably need more like 5K SRO type units in the city but 1000 would be a start. That would diminish the affordable housing fund quickly.

I am thinking that the "green bonds" where basically designed to do the silo issue -- if you could use $10M to reduce homeless costs by say 30M a year then a "bond" for the 20M would incentive the city. Maybe.

 
At 7:27 PM, Anonymous Richard Layman said...

1. SOME has at least 600 units, so it'd be great if they'd share a proforma. From the photos on their website, it's mostly existing buildings, not new construction.

But yep, I think there's demand for probably at least 5,000-7,000 units of various SRO/microunit options.

2. I always say that I don't really understand "Social Impact Bonds," but your point about "Green Bonds" is along the same line.

This kind of initiative is perfect for it. The savings are very quantifiable and direct.

By adding the savings from providing less health care, itinerant homeless services, etc., you have a greater revenue stream for paying it off.

E.g., the heavy users of emergency services cost many hundreds of thousands of dollars per year. That is the justification for "housing first."

I'm not sure the campers cost that much. But I suppose your $900/mo. + another $1,000 in social services each month, is probably $24,000.

I don't know how Social Security Disability works, but people in regular housing can probably be better eligible for it, so they could pay a bit more towards the costs.

But yes, it becomes a permanent financial burden that no city wants to take on.

3. Furthermore, I can see DC not wanting to do this because it will encourage people to come here, and they become a permanent burden.

This is another reason why dealing with this should be done at the very least at the regional scale, with lots of federal help.

The jurisdictions that step up and provide housing end up drawing in more clients, and this reduces the demand on other jurisdictions, who should be dealing with it too.

You probably don't remember but I wrote about SRO a couple years ago, referencing DC and Orange County, which has the same problem actually, but in a way it's worse there because of the deconcentrated nature of the county, and the lack of a kind of social service infrastructure that is set up to deal with this kind of problem, compared to traditional center cities. (They have it, but it's like providing transit in the suburbs -- it's very spread out, expensive and inefficient to do).

In Salt Lake the itinerant homeless shelters were concentrated on the outskirts of Downtown and was very gnarly. (I haven't seen homeless congregation in Seattle, but I have in SF, SD, and SLC, and it's very very scary. DC is nowhere near how it is there. Even if there are problems here, plus the persistence of camping.)

Crime, drugs, some murders. I guess they've since dispersed the services, but one jurisdiction, South Salt Lake, is proving obstreperous, and so the state is considering moving forward with state action, obviating local concerns.

You can see why a smaller community, in a revitalizing phase would be concerned. But in Salt Lake County, the state is the primary actor in paying for building this infrastructure. So there at least, it is being addressed regionally.

 
At 9:00 AM, Anonymous charlie said...

Yeah I am seriously losing my mind. Like clicking on the prague article then telling you about it. Meant to say "social impact" rather than "Green" bonds.


 
At 11:02 AM, Anonymous Richard Layman said...

green bonds I suppose are different, because you're not monetizing qualitative benefits. But the principles are the same!

The funny thing, one of my criticisms of the dc cultural plan is that it suggested social impact bonds as a funding source. But there are no quantifiable costs avoided or benefits reaped, so who would put in money for SIBs for the arts? There's no revenue/funding stream.

Even the general social programs for which they are touted can be somewhat amorphous when it comes to calculating benefits.

But getting homeless off the streets, people who are high cost in terms of public services, that's quantifiable.

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wrt losing your mind, when it's so full of (good, insightful) stuff it's hard to keep things straight.

Going through boxes, it's crazy to find stuff that I referenced later, after coming across additional mentions.

 

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