Grace Streltzov

Are Affordable TODs Providing Access to Opportunity?

Posted on by Miriam Zuk


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With the growing interest in urban living and investment in transit-oriented development (TOD), cities are becoming more expensive than ever. So how can we ensure low-income communities have access to transit and opportunity? In our recent study for the Poverty and Race Research Action Council, Ian Carlton and I conducted a national scan to gauge how far the field of equitable TOD has come and identify opportunities for further improvement.

The study was inspired by recent federal action from the Federal Transit Administration to incorporate affordable housing into their evaluation metrics of the New Starts transit grant applicants. While a number of local, regional and state governments have already developed innovative funding and incentive programs to encourage equitable TODs, we were curious about the potential impact of such an action at the federal level. Will federal action make TODs more equitable in the future?

To begin to answer this question, we analyzed the proximity of low-income housing to existing rail stations. We found that only 15% of affordable housing developments subsidized by the Low Income Housing Tax Credit (LIHTC) are within a half mile of a transit station. In contrast, over half of newly built transit stations have been located within a half mile of existing LIHTC developments. In other words, transit has done better at locating near affordable housing than vice versa. This may be due to the need for dense neighborhoods to support ridership, as well as the housing policies that channel subsidized housing to such areas.

We also uncovered three factors that suggest that the few existing affordable TODs are either located in low opportunity neighborhoods or may not be stable. First, we found that transit-accessible neighborhoods with LIHTC developments had significantly lower opportunity levels, as measured by poverty rates and school district performance,  in comparison to both transit-accessible neighborhoods without LIHTC developments and neighborhoods with LIHTC developments that did not have transit stations. Second, affordable TODs were more likely to experience gentrification pressures than both non-affordable TODs and affordable housing that was not located in a TOD. And third, only one in five new transit neighborhoods saw new LIHTC developments added after they opened.

Our findings call into question the long-term stability of the few equitable TODs that have been successfully established. How much will the recently established evaluation criteria of the New Starts program shift the landscape? Given that over half of transit stations already go into neighborhoods with subsidized housing, it may be fruitful to focus efforts on funding new affordable units in TODs, as cost is often the limiting factor in the affordable housing industry. This is especially true in TODs given the extensive evidence showing that transit stations increase property values of surrounding neighborhoods. Furthermore, additional efforts should be made to develop affordable housing in high opportunity TODs, of which we have found few to date.

And how do we stabilize the few existing affordable TODs, given our finding that they are more likely to experience gentrification pressures? In a related project, I am studying the role of transit investments in neighborhood gentrification and displacement of low-income households in the Bay Area. Through this project, we are developing a toolkit to help communities identify early warning signs and identify policy packages to better prepare for and prevent displacement from occurring.

More research and action is certainly needed. As our investigations into three case studies indicated, even where communities have been successful at developing affordable housing near transit, ridership may not be meeting expectations; the theoretical benefits of affordable housing developments near transit may therefore not be fully captured. Affordable TOD appears to be a laudable goal, but one that is not yet fully understood. It will be important to replicate similar studies in the future to determine if recent policymaking, new funding programs and other efforts aimed at fostering equitable growth in transit and opportunity-rich neighborhoods are successfully moving the needle.


Possibilities for a Sustainable, Equitable Planet

Posted on by Karen Chapple

How should we consume the planet’s resources, who should bear the costs, and how, as a society, should we make these decisions? On March 5, 2015, the Institute for Urban & Regional Development (IURD) and the Institute for Research on Labor & Employment (IRLE) jointly sponsored a conference, “Reducing Inequality in a Sustainable World.” A highlight of the day was a panel of key California leaders on climate policy: California State Senate President pro Tempore Kevin de León, California Air Resources Board Chair Mary Nichols, and State Building & Construction Trades Council of California President Robbie Hunter, moderated by Carol Zabin, Chair of the UC Berkeley Donald Vial Center on Employment in the Green Economy.  They discussed the expansion of climate initiatives that are now on the table in California to accelerate reductions in greenhouse gas emissions, and specifically addressed the need to ensure that workers are protected and good jobs are created in the transition to a clean energy economy.  Throughout the day, the conference panels sparked a lively discussion by faculty speakers from the UC-Berkeley campus, who were joined by Sivan Kartha from the Stockholm Environment Institute, and the 200-member audience.

 As IRLE Director and UC-Berkeley Professor Michael Reich noted in his opening remarks, “California is a pioneer in climate policy as well as remedying inequality. But too often it has not considered environment and equity simultaneously. We are able to start that conversation because we have so many of the world’s leading experts right here on this campus.”

Throughout the day, speakers explored the multidimensional relationships between inequality and sustainability. Kartha began by examining equity across countries in reducing global emissions, proposing a $20 per capita per day development threshold to define the distribution of responsibility, with countries above the threshold bearing the largest share of the burden. Over time, the U.S. and E.U. would bear less of the cost, while rapidly growing countries like China would assume more.

Other speakers developed the equity rationale for taking action on climate change: in Rachel Morello-Frosch’s terms, the climate gap means that changes such as increases in urban heat will have a disproportionate impact on people of color and the poor, particularly in communities that are highly segregated by race and ethnicity.  And Marshall Burke added that, because of heat impacts on crops, productivity, and political violence, climate inaction will slow growth, with negative impacts falling disproportionately on the poorest countries.

Speakers suggested a broader definition of sustainability, arguing against one that focuses only on reducing carbon emissions. For Betty Deakin, this means dealing with rapid urbanization in the developing world, and the aspirations of urban in-migrants. Karen Chapple, Clair Brown, and Isha Ray framed the question in terms of Amartya Sen’s idea of capabilities, or how the environmental context can allow people to realize their potential. For Ray in particular, to attain sustainable development will mean capability enhancement for women and the poor, specifically, dealing with water, sanitation, and energy – “the backbone of a decent life.” This in turn shapes gateway capabilities, that is, the ability for women to be healthy, go to school, and avoid unpaid work. Ray disagreed with Kartha’s suggestion that sustainability and equity are mutually dependent and synergistic, arguing that sustainability in practice requires making choices among desirable goals. In the short-term, creating gender-equal pathways is a pre-condition to moving forward on sustainability.

Many of the speakers addressed the contradictions of growing consumption and environmental goals. Kartha advocated for differentiating between basic emissions and discretionary consumption as the path to equitable effort-sharing. At the same time, consumption is a key development goal: Dan Kammen described a strong relationship between electricity consumption and economic opportunity and quality of life. Brazil illustrates the challenge of increasing consumption among a growing middle class. Pointing to the example of increased car ownership, Teresa Caldeira suggested the paradox of progress: the very programs that have lifted people from poverty have engendered an individualism that increases consumption and negatively impacts sustainability.  As Brown pointed out, one way to address these contradictions would be to improve our measurement of economic performance or prosperity to incorporate quality of life, justice (inequality), and sustainability (as done, in part, by the Genuine Progress Indicator and the Better Life Index).

From this powerful set of ideas, the question is, what are the right policies to pursue, regionally, nationally, and internationally? Kammen asked how we can create an equitable transition to clean energy that provides access to energy for an additional two billion people. Several speakers pointed out that the costs of regulation are not well understood. Carbon pricing is a powerful first step, but will need to take into account the differential social cost of carbon by region, according to David Anthoff. He proposed a system of equity weighting to distribute the environmental and social costs of policies across poor and rich countries. Margaret Taylor showed how regulatory impact assessments of minimum efficiency performance standards for appliances had consistently overestimated their costs, failing to anticipate how they would lower consumer up-front costs while increasing product quality. These in turn may disproportionately benefit the poor, who are most impacted by high energy prices. Peter Barnes argued that there is a crisis in how we manage our common wealth, and both market and government failure would continue to prevent the protection of the commons, especially natural capital. As a remedy, he advocated principles of trusteeship, preserving the globe’s various forms of wealth for future generations through ecosystem trusts that would collect payment for use of common wealth and distribute the proceeds to families as a dividend.

California is in the middle of a grand policy experiment to reduce its greenhouse gas emissions, as described by Chair Nichols of the California Air Resources Board. Nichols pointed to the growing evidence that California is improving its air quality while also addressing the needs of disadvantaged communities. Zabin cautioned that green job opportunities had been overhyped in the past and that standards for job quality and access are needed to ensure that investments create good jobs and build a skilled workforce that performs the quality work necessary to accomplish the state’s ambitious climate goals. Morello-Frosch explained the potential of SB 535, the Community Benefits Fund, to identify and assist climate gap neighborhoods. Deakin argued for land use planning, as supported by SB 375, that would balance jobs, housing and services while reducing trip distance, but cautioned that such tools needed to be implemented with more attention to multiple travel modes and participation in planning. Chapple suggested an SB 375 2.0 that would deal with the rising land costs – since “livable cities are expensive cities” -- that lead to the potential for the displacement of residents and businesses.  Morello-Frosch and Kammen demonstrated the power of measurement tools, from CalEnviroScreen, to CoolCalifornia.org, to shape policy and monitor its impacts. But Brown argued for redefining success itself through a revised GDP measure that accounts for consumption, inequality, nonmarket work and leisure, and negative environmental externalities; she suggested that California follow the lead of Maryland and Vermont in adopting such a measure.

The ultimate challenge, however, is politics. In Brazil, progressive policies came about through the rise of a political constituency, organized in part by the Catholic Church. But Caldeira pointed out that a similar push for sustainability has not yet materialized in that country. Globally, increasing urbanization – and how it affects nature, the built environment, and society -- is helping to build a constituency, as Deakin showed. And as Kartha argued, the more equitable that the effort to reduce emissions is, the more countries will cooperate.

In California, the politics are increasingly favorable, in part because of the broad support from diverse communities for climate change action – as well as the ability of California’s constituencies, such as the trade unions, to work closely with regulators, as Robbie Hunter pointed out. President pro Tempore of the California State Senate Kevin de Léon sees California as providing a new evidence base for how to reduce greenhouse gas emissions while growing the economy and reducing inequality. We are in the middle of a real-time demonstration on the world stage, with implications for the very future of the globe. The conversation, and action, must continue.

The conference was made possible by support from the California State Legislature and the UC-Berkeley Vice Chancellor for Research.


The blocked market for density and affordable housing

Posted on by Karen Chapple

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MODIFIED FROM THE CITY OF SANTA CRUZ’S ADU MANUAL, AVAILABLE AT WWW.CITYOFSANTACRUZ.COM

Around the globe, many cities are experiencing a housing affordability crisis. There are few places this crisis is more pronounced than San Francisco and Los Angeles. California’s strict land use regulations hinder us from producing enough housing, particularly infill development, or new buildings on vacant or underutilized land in the urban core.

Yet, with 200,000 units in the pipeline, the San Francisco Bay Area’s housing construction is near its historic pace. The question is, how can the region produce more affordable housing?

The crisis will only get worse as we plan for a more sustainable region. With two million new residents expected in the Bay Area by 2040, the region is proposing to channel 80% of its future growth into 5% of regional land area. To help, cities will get transportation funding and relief from environmental regulation. But that may not be enough to counteract the challenge of finding appropriate sites or even just paying for high-rise residential buildings outside of the region’s major downtowns (San Francisco and San Jose). Rising land prices in the core will also mean higher housing costs. At the same time, the vast majority of new jobs expected in the Bay Area are expected to be low-wage, exacerbating the need for affordable housing.

What if the solution is actually in our own backyards?  My study with University of Texas-Austin Professor Jake Wegmann, published recently in the Journal of Urbanism, shows that based on the availability of underutilized or vacant land, about half of our infill development in built-up areas like San Francisco’s East Bay should occur in the form of accessory dwelling units, or self-contained, smaller living units, attached or detached from the main home. With relatively low costs (as low as $100,000) and short build time (less than six months), backyard cottages can increase density more efficiently than multifamily projects. They rent for much less, often providing affordable units within affluent neighborhoods and diversifying the housing stock. We calculate that a backyard cottage strategy could yield as many as six times as many affordable units as conventional infill.

The question then becomes, what is hindering homeowners from building more cottages? Even in Berkeley, a city that welcomes accessory units, the number of permit applications for home additions still dwarves that for cottages. We argue that the market is blocked largely because of restrictive zoning regulations, particularly parking requirements. One solution has appeared in the form of intermediaries that help homeowners navigate city regulations and manage construction. But the market for these intermediaries is mostly a niche of wealthy elderly homeowners seeking to age in place alongside younger generations.

To address the affordable housing crisis while making our regions more sustainable, a mass market for small-scale infill must emerge. But to create such a market requires a fundamental shift in the conversation. Just as in the debate over climate change, we can argue endlessly on the merits and the means, but in the end, the game-changer will be the costs of inaction – a deepening of the already devastating housing crisis.

Banks currently don’t allow current or prospective homeowners to use income from accessory units to qualify for mortgages. That means that only the homeowners with substantial equity in their homes who can finance the construction of accessory units. Developing a mass market means helping low- and moderate-income homeowners to build – and purchase – homes with accessory units as well. As Wegmann has written, state and national housing finance agencies could adapt their existing programs to provide new mortgage products for new permitted spaces. Eligibility for the loans could be predicated on the home city easing zoning regulations for accessory units.

It took a revolution in mortgage finance to spur the suburbanization of America. It will take a new revolution to make affordable infill possible.

For more information, see “Yes in My Backyard: Mobilizing the Market for Secondary Units,” "Hidden Density in Single-Family Neighborhoods: Backyard Cottages as an Equitable Smart Growth Strategy," “We Just Built It:” Code Enforcement, Local Politics and the Extralegal Housing Market in Southeast Los Angeles County, Chapter 3 in Planning Sustainable Cities and Regions: Towards More Equitable Development, and five related IURD working papers.