Affordable Housing

KC topics that don't fit anywhere else.
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DaveKCMO
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Re: Affordable Housing

Post by DaveKCMO » Wed Dec 05, 2018 8:14 pm

‘There’s just not enough scooters’: KC councilman pursues tax for affordable housing: https://www.kansascity.com/news/politic ... 04395.html
One solution, offered Wednesday by Mayor Pro Tem Scott Wagner, would boost Kansas Citians’ property tax rate to raise about $4 million per year — or an estimated $41 million over its 10-year life. If the Council passes the proposal, it will appear on the November ballot for voters to weigh in.

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Re: Affordable Housing

Post by missingkc » Wed Dec 05, 2018 9:52 pm

That's something, but doesn't sound like a lot of money. What would be done with the 41m? Rehabs? New construction? I would hope that teardowns of all but the decrepit-beyond-rehab would stop. Affordable housing may not be 1 bedroom/person, living, dining, open concept, bonus room and granite countertops and vanities. It might mean a good roof, toilets and hvac that work. What are the expectations?

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Re: Affordable Housing

Post by FangKC » Mon Dec 10, 2018 7:20 pm

This House Costs Just $20,000—But It’s Nicer Than Yours

...
In Serenbe, their first problem was a zoning issue: The houses were too small. (It’s a common problem for anyone trying to build a tiny home.) But they also realized there were numerous other issues, from dealing with insurance, to the bank. In the pilot project, the homes will be owned by the community and shared with artists as part of a residency program. But in a typical case, when someone is buying the house on a limited income and can’t afford the $20,000, banks won’t finance a mortgage for such a small amount of money.

"The most daunting problems aren’t brick and mortar problems, they’re these network and system problems."

Regions Bank, which works with Rural Studio, told Smith that a mortgage for a $100,000 house costs the bank about $2,300. But a mortgage for a $20,000 house also costs $2,300. “There’s a lack of scalability,” Smith says. “There are these structural things you can only scale down so far.” Now the bank has worked on their own design problem: a new mortgage product made for the poorest people to afford.
...

https://tinyurl.com/y8sqkcl8

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Re: Affordable Housing

Post by DaveKCMO » Mon Dec 10, 2018 10:08 pm

Did ANYONE here go to the housing plan update meetings? Just me? *crickets*

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Re: Affordable Housing

Post by kboish » Tue Dec 11, 2018 9:28 am

Affordable housing being discussed today on KCUR. A commercial that aired yesterday had Kraske framing the conversation as, "Everyone knows Kansas City, Mo has had an affordable housing crisis for decades, tune in tomorrow to find out form city leaders why they're just now trying to do something about it."

Sounds like it should be a fact filled conversation!

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Re: Affordable Housing

Post by FangKC » Fri Dec 21, 2018 9:48 pm

The First 'Big Deal' In Solving Kansas City's Affordable Housing Problem? A Trust Fund

https://www.kcur.org/post/first-big-dea ... trust-fund

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Re: Affordable Housing

Post by DaveKCMO » Thu Dec 27, 2018 9:54 am


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Re: Affordable Housing

Post by FangKC » Thu Jan 03, 2019 6:22 am

Why it's so hard to create affordable housing in economically-disadvantaged neighborhoods. Again, it's the banks.

A Vision for Vacant Properties
...
We now know that the average renovation cost is $70,000, and our total cash investment averages $80,000 per house. The market distortion which then leads to an economic (not overtly racial) red-lining is that the day we finish one of these lovely historic houses, both the banks and the Jefferson County Property Valuation Administrator say the house is “worth” about $28,000 based on “area comparisons.” It is virtually impossible to get any mortgage, construction loan or even home improvement loan on these houses since the amount required to renovate is so much more than what the finished “value” will be.

The reason is simple and makes sense at first blush: banks use “area comparisons” to appraise properties when they decide how much to lend. Decades of disinvestment (some due to folks with resources leaving after the 1937 flood), coupled with the city’s history of redlining that left our city segregated, has made it difficult, if not impossible, for certain groups to build equity through their homes over the last three generations. Subsequent vicious cycles of crime, under-employment, and drug abuse have led to one in four area properties being VAP, so these continual $10,000 “sales comps” preclude any other type of market-based valuation.
...
https://www.strongtowns.org/journal/201 ... PNlD3K_nJg

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Re: Affordable Housing

Post by flyingember » Thu Jan 03, 2019 1:30 pm

Home appraisals are BS.

When we sold they only used homes in a neighborhood that's valued 10% less because they're the only homes of the same age and style nearly that sold recently rather than the older homes around us that sold for way more.

A year after move in on our new home we tried to drop PMI. Our bank's appraiser valued our house per square foot the same as a 20-year old home near us. It lost 7% of value when everything around us was going up. They actually said it was valued less than it cost to build it only 12 months before. Housing construction costs went up so how could our home value be less than it cost to build the same thing?

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Re: Affordable Housing

Post by DaveKCMO » Fri Jan 04, 2019 10:30 am

The Housing Committee will meet on the following dates:

1. Housing Committee: Wednesday, January 9th, 11:15am, 26th floor, City Hall.

2. Housing Committee Public Meeting, Monday, Jan. 14, 2019 from 6:15 to 7:30 p.m. at the Gregg- Klice Community Center, 1600 John ‘Buck’ O’Neil Way.

(The regular 3rd District community meeting precedes the housing meeting from 6 to 6:15 p.m).

3. Public Testimony with the Housing committee, Wednesday, January 16th, 12:00pm, 10th floor, City Hall.

4. Public Testimony with the Housing committee, Wednesday, January 23th, 12:00pm, 10th floor, City Hall.

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Re: Affordable Housing

Post by flyingember » Fri Jan 04, 2019 11:22 am

Remember several key points of affordable housing when making testimony

1. location. We've learned that massive apartment blocks with only affordable housing doesn't work. it should be mixed into the city
2. equity. We don't want affordable housing with two tiers of renters, with separate entrances or less amenities
3. walk-ability. Affordable housing should be something where someone can age in place and still live there when they can no longer drive
4. quality. While one shouldn't expect marble, stainless and hardwood, affordable shouldn't mean shoddy work or less efficient
5. longevity. affordable shouldn't expire.
6. variety. we need larger 3BR spaces and micro units as much as 1BR units
7. zoning, setbacks, and the like matter. we don't have a good zoning option for cheap, small units in existing neighborhoods

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Re: Affordable Housing

Post by aknowledgeableperson » Sat Jan 05, 2019 8:32 pm

"Why it's so hard to create affordable housing in economically-disadvantaged neighborhoods. Again, it's the banks."

One has to remember the banks are regulated. And those regulations to a great extent discourage granting a loan to exceeds the valuation of the property. Look at what happened 10 years ago when the housing market collapsed. Of course there were many loans out there, primary and secondary, that exceed the house's value but you had Wall Street markets that were able and willing to buy that loan from a bank.

How many of you would be willing to grant a $80,000 loan on a house valued at $28,000?
Tried to find my source but I recollect that the breakeven point for a bank to originate and service a home loan was around $70,000 for a loan. Will still try to find it.



"Housing construction costs went up so how could our home value be less than it cost to build the same thing?"

That is comparing apples to oranges.
One can also challenge the value established by the appraiser. Did that on our first home purchase with the assistance of the real estate agent. Succeeded to raise the value to the purchase price of the house so we could get the loan. An office I worked in use to get three appraisals when purchasing properties. Would be amazed at the differences of values established by the three appraisers.

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Re: Affordable Housing

Post by FangKC » Sun Jan 06, 2019 12:46 am

There are many who also say that banks and appraisers discriminate by low-balling real estate valuations because the neighborhood is populated by minorities, and primarily blacks. All you have to do is look at the evaluations of houses one to three blocks west of Troost versus one to three blocks east of Troost -- in similar condition -- to see this in effect.

Much of this is simply perception. A house in black neighborhood is considered to be less valuable even if it's well-maintained and on a block of well-maintained homes.

The other problem is race-based steerage to loans. A white person with good credit gets a home improvement loan at 6%; a black person with good credit is steered to a more high-interest loan for a home improvement. Thus, even if people in the black neighborhoods seek to improve the values of their homes and neighborhoods, it costs them more to finance it, and often they are approved for much less than a white person. This is because of the low-balling of their home value. The appraisers strip minority homeowners of their equity and wealth.

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Re: Affordable Housing

Post by FangKC » Tue Jan 08, 2019 3:17 pm

City Survey Reveals Rising Worries About Affordable Housing
...
That survey asked people about their income and how much they spent on mortgage/rent and utilities. The national norm considers households spending more than 30 percent of their income on rent or mortgage as being burdened.

In Kansas City overall, the survey found that households earning less than $20,000 were spending 50 percent of their income on rent/mortgage and utilities. Households earning $20,000- to $30,000 were spending 40 percent of their incomes on those costs.
...
To add to this, I just heard on Channel 41News that out 50 percent rent/utilities figure reported in the CityScene article, 41 News says that 23 percent is utilities. They added that the same households reported spending 21 percent on transportation. So rent/utilities/transportation costs were 73 percent of their income. That leaves 27 percent for food/non-food items, clothing, shoes, replacing towels, bedding; laundry expenses; soap, and possibly healthcare expenses for the adults (assuming they don't have healthcare through their jobs), and extra school expenses if they have children. Even retired people on Medicare have additional health care expenses beyond basic Medicare coverage that can be significant depending on their health situation.

https://tinyurl.com/y7pmokxv

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Re: Affordable Housing

Post by brewcrew1000 » Wed Feb 06, 2019 11:52 am

The Hidden Value of a Poor Neighborhood

https://www.strongtowns.org/journal/201 ... ighborhood

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Re: Affordable Housing

Post by FangKC » Thu Feb 07, 2019 3:01 am

That's a really good article Brewcrew. Thanks for posting it.

It's important to educate people about the value of density in supporting a city, and how low-density sprawl development is not financially sustainable as it ages. Those suburban estate lots will become the most expensive to service, and a financial drain on the city when they start to fall apart. The cost per acre comparison been poor neighborhoods and affluent ones were enlightening. This should be mandatory reading for every city official.

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Re: Affordable Housing

Post by DaveKCMO » Thu Feb 07, 2019 7:57 am

Interesting thread from Richard Florida: https://twitter.com/Richard_Florida/sta ... 7719501830

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Re: Affordable Housing

Post by beautyfromashes » Thu Feb 07, 2019 11:34 am

^ I think there comes a point where the affordability movement in America hurts Kansas City. Should everyone be able to live in the location of their choice with a basic income? Should a recent graduate be able to live in Manhattan or San Francisco easily? It seems the unaffordability of those places has pushed redevelopment and growth in other parts of the country including places like Denver. If we can continue with some of the major initiatives we have advanced in the last decade+ including transportation (streetcar+), urban living and cultural growth we might make ourselves a viable alternative to expensive East and West coast cities as well. This spreading of the population and, in turn, a migration of cultural ideas could be a positive for America as a whole. But, I fear a slowing of these major initiatives and moving funds to meet, very real, equality issues will stall our transcendence to ‘alternative city’ status. We have to decide what direction we will take.

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Re: Affordable Housing

Post by FangKC » Fri Feb 08, 2019 7:29 pm

Nonprofit flips distressed homes into beacons of hope

https://www.kshb.com/news/local-news/no ... ns-of-hope

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Re: Affordable Housing

Post by phuqueue » Sat Feb 09, 2019 8:37 am

Recent graduates in Manhattan and San Francisco are not the real victims of the affordability crisis. It's fair to expect transplants to be able to afford to live in the place they're moving to, whatever it costs, and to not bother moving there if they can't. The real victims are the blue collar (often non-white) people who have lived in these places forever and are pushed out of their homes in favor of those transplants pulling down big salaries in industries like finance and tech. I don't wholly disagree that it's good for the country for people to move around, but for every person who can't afford California but can, at least, afford to move to Colorado, there are plenty more who can't make a long distance move but are just pushed further and further out into the hinterlands around the cities that, after all, still need them to perform the low wage work that will no longer pay for a home there. They're uprooted from their homes, their commutes grow, their quality of life declines, but hey, at least the new wave of yuppies get their fun urban playground to show off their Instagramable lives, and the real estate developers get even richer off the whole thing.

It's also worth pointing out that the people who can afford to move all the way to other states are now driving up costs in those states as well. KC would be in good shape to absorb priced-out coastal transplants for now, but be careful what you wish for. Obviously Denver is a far cry from reaching San Francisco-level unaffordability, but ex-Californians are already not held in high regard in the other Western states.

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