- The Institute of Housing Studies at DePaul University has issued a report analyzing foreclosure activity which finds that foreclosures are down in the Chicago area in 2014. The report also finds that mortgage activity remains low while investor buyers have become a major factor in the single family market.
- Miami Coalition for the Homeless has proposed a set of solutions to make housing in Miami affordable. The prosed policy changes grew out of a cross sector symposium dubbed the 2015 Housing Summit – organized to promoting the creation and maintenance of affordable housing in Miami-Dade County, where 71% of monthly household income goes to housing and transportation.
- The National Association of Realtors (NAR) would like to see the Federal Housing Authority (FHA) increase National Loan Limits. The National Loan Limit sets the individual loan limits available under the Government Sponsored Entities (Fannie and Freddie) and FHA and VA loan programs. In a comment letter to the FHA NAR argues that since housing prices have rebounded following the financial crisis – now expected to surpass 2007’s prices, increases are in order.
Tag Archives: mixed-income development
Inclusionary Housing and Stigma
Hughen and Read have posted their abstract for Inclusionary Housing Policies, Stigma Effects and Strategic Production Decisions to SSRN (it is not available for download from there and must be purchased from the publisher one way or the other). The abstract reads,
Inclusionary housing policies enacted by municipal governments rely on a combination of legal mandates and economic incentives to encourage residential real estate developers to include affordable units in otherwise market-rate projects. These regulations provide a means of stimulating the production of mixed-income housing at a minimal cost to the public sector, but have been hypothesized to slow development and put upward pressure on housing prices. The results of the theoretical models presented in this paper suggest that inclusionary housing policies need not increase housing prices in all situations. However, any observed impact on housing prices may be mitigated by density effects and stigma effects that decrease demand for market-rate units. The results additionally suggest real estate developers are likely to respond to inclusionary housing policies by strategically altering production decisions.
The authors conclude that “Density bonuses can limit the upward pressure on housing prices in strong markets, but may prove much less effective in weak markets where developers have little incentive to increase production in response to this type of economic incentive.” (609)
As NYC Mayor de Blasio drafts his ambitious affordable housing plan, he needs to maintain flexibility in his inclusionary zoning initiative. I think the stigma effects discussed in the article are much less relevant in NYC than in many other jurisdictions because NYC has a long history of successful mixed-income housing projects. But I do think that the de Blasio Administration needs to ensure that its initiative is designed to work effectively during both strong and weak markets. The administration will also need to ensure that it works well in the outer boroughs as well as in Manhattan’s red hot housing market.
