Joy Conway – Litigation a barrier

A police officer wanting to buy a home in Boston may have better luck looking elsewhere. Elementary school teachers, nurses, janitors and retail salespeople should probably do the same.

Boston ranks as one of the least affordable metropolitan areas for police officers to buy a median-priced home, according to a report by the National Housing Conference’s Center for Housing Policy. Local officers would have to earn 50 percent more than their median annual salaries of $39,870, or $59,805, in order to purchase a home in Boston.

The house hunt can be even more depressing for full-time janitors and salespeople in Boston, where home prices are completely out of their reach, and rents are equally daunting.

The Boston area is one of the most unaffordable regions for janitors and retail salespeople to rent one- and two-bedroom apartments, according to the CHP study. Retail salespeople would have to earn twice as much to rent a typical two-bedroom apartment, while janitors would need to earn 1.7 times more.

These are just some of the findings in the recently released study “Paycheck to Paycheck: Working Families and the Cost of Housing in America.” The study is an update of last year’s “Housing America’s Working Families,” a report that revealed that over 13 million families in this country are using more than half of their incomes to pay for housing.

The findings lend further support to what activists and groups have been saying for the last several years – that working-class people can’t afford to live in the communities where they work. They also intensify calls for the creation of more housing in the Greater Boston area.

“It seems to be in line with what we’re saying,” said John J. Moynihan, director of resource and policy development for the Archdiocese of Boston.

Last year, the archdiocese and Northeastern University released a report in response to a request from Cardinal Bernard Law calling for the creation of 36,000 housing units more than what normally would be produced over the next five years. The report found that housing prices rose 35 percent in Boston between 1995 and 1999, while incomes rose by 25 percent – creating a severe affordability gap for many residents.

Some argue that the high home prices are a result of the low housing supply caused by strict building rules and communities and groups that rigorously fight any type of housing development.

“If the supply is not sufficient for the demand, the prices to purchase and the prices to rent are going to go up,” said Joy Conway, senior vice president of government and industry affairs for the Greater Boston Real Estate Board.

GBREB has been heavily involved with the Metropolitan Affairs Coalition, a group that has focused on housing issues, and supports several proposed laws that would help increase the housing supply and ease housing costs, said Conway.

GBREB believes that Gov. Jane Swift’s recent proposal to make unused state-owned land more quickly available to developers for housing projects has tremendous merit, said Conway.

Realtors also support a bill that would help reduce the amount of lawsuits brought against developers during the permitting process by communities and neighbors. The bill would essentially reduce the amount of time disputes between a developer and opponents are tied up in court.

That would ultimately decrease housing and development costs because it would cut the time and money spent on arguing cases in court. Further, it would encourage more developers to stick by their housing projects and complete the permitting process, instead of walking away from their proposals.

Litigation Reduction
Many developers can’t afford the legal fees and the cost of holding onto land for a lengthy time period while waiting for a court decision, Conway said.

“We would very much like to see a reduction on the amount of litigation that goes on,” she said.

In its latest report, the Center for Housing Policy examines whether people earning the prevailing wage working as janitors, elementary school teachers, police officers, licensed nurses and retail salespeople in 60 of the country’s largest housing markets can afford a home in the communities in which they live.

The report looks at both rental and homeownership information and finds that families relying on earnings from those occupations are more likely to remain renters – adding more pressure on an already-strained rental housing market.

Eight out of 10 working families pay more than half of their income for housing. Janitors are able to rent a one-bedroom apartment on 30 percent of their income in just six of the 60 metropolitan areas – Pittsburgh, Cincinnati, Oklahoma City, Indianapolis, St. Louis and Columbus, Ohio. Retail salespeople can afford a one-bedroom apartment in only three of 60 cities – Oklahoma City, St. Louis and Cincinnati.

On the homeownership side, households depending on teachers or police officers’ salaries alone cannot afford to buy a median-priced home in two-thirds, or about 40, of the metropolitan areas.

Moynihan said the recent CHP report illustrates the extent of this critical problem.

The archdiocese believes the solution lies not only in building houses but also in creating mixed-income communities, Moynihan said.

The archdiocese has been creating mixed-income communities for over 30 years in communities like Boston, Andover, Lexington and Scituate, he said.

The archdiocese wants to build 4,000 more units over the next three years. But beyond actually building houses, the archdiocese wants to end the creation of exclusive communities that isolate high-income earners and divide people along racial and income lines, he said.

“We have to get to a point where we all work toward a common goal, where we’re building communities that are inclusive,” he said.

Last week, activists celebrated two positive developments in the struggle for more affordable housing. The Greater Boston Interfaith Organization, a coalition of church and community groups, announced it had raised $5 million to build more housing, and the House Ways and Means Committee voted to restore $80 million to the Affordable Housing Trust Fund over four years.

GBIO plans to set up a revolving fund to build 1,000 townhouses that will be sold by lottery to families making between $30,000 and $55,000 annually. Each townhouse would also feature an apartment to be rented at about $700 a month.

Along with church leaders, city officials have also taken steps to spur housing creation.

The Boston Redevelopment Authority, Department of Neighborhood Development and the Boston Housing Authority are together and separately working on getting more housing built. Since the release last year of a three-year plan to create 7,500 new housing units, more than 2,000 new units have been permitted, including more than 670 city-assisted units, according to a BRA report.

Federal leaders have also expanded various programs and subsidies to help working families find affordable housing.

The U.S. Department of Housing and Urban Development, for example, started a program in 1997 that allows police officers to buy government-owned houses taken from previous owners who did not meet mortgage payments at discount prices.

The program was expanded to include teachers in 1999.

HUD plans to restart its Officer Next Door and Teacher Next Door programs after they were temporarily suspended in April when an audit revealed that as many as one in four of the 3,824 participants had violated program rules. The programs are expected to start again in August.

Homes Beyond Reach Of Teachers, Salesmen

by Banker & Tradesman time to read: 5 min