Affordable housing: busting 5 myths! The first step in combating the lack of affordable housing is dispelling the myths about it.

Most of those who work in the apartment business have faced their fair share of NIMBYism (Not-In-My-Back-Yard). Whether it involves a market-rate or mixed-income community, chances are the apartment community has undergone scrutiny from neighboring homeowners and perhaps even public officials.

Those who work with an affordable housing community likely have stories to share, being blamed for everything from traffic congestion to increased crime in the neighborhood. It is time, however, for every multifamily housing professional to be aware of the facts. Apartments, even affordable ones, do not lower property values. Apartments do not increase traffic, and case studies show that properly managed apartments can even lower crime rates in neighborhoods. The negative myths surrounding affordable housing are not true. It is vital to the nation that the public be educated on the benefits that well-designed, well-planned affordable housing has on communities.

What, technically, is affordable housing? Perhaps it is best to start with what affordable housing is not. It is not slum housing. It is not high-density, inner-city, "project" housing many people envision. It is not overcrowded blight. Affordable housing has many different faces in many different parts of the country. It may be units within a market-rate apartment community. It may look like townhomes in a comfortable subdivision, garden-style apartments or even multi-story apartment communities. It may have public or private financing--or both. In the simplest sense, affordability--as defined by the U.S. Department of Housing and Urban Development (HUD)--is when a household pays no more than 30 percent of its annual income on housing and utilities.

The answer to the question of who needs affordable housing can be surprising to some. The Center for Housing Policy, the research affiliate of the National Housing Conference, has created an interactive Web site (www.centerforhousingpolicy.org) that analyzes the wages for a variety of vital community occupations and what these wages can afford both for homeownership and in the rental market.

With 136 different metropolitan areas and 64 different occupations, this Web site issues a true wake-up call for the nation. (See above charts for Chicago and Atlanta.)

In the Chicago metropolitan area, the typical wage for a police officer was $43,089, and $38,753 for an elementary school teacher. The annual income needed for a median priced home was $81,771. In the rental market, fair market rent for a one bedroom apartment was $797 a month. The hourly wage needed to afford this apartment is $15.33. The typical hourly wage for a janitor in Chicago is $8.65; it's $8.54 for a retail salesperson.

In the Atlanta metropolitan area the annual income needed to buy the median-priced home is $69,600. Typical wages for a police officer are $45,000 and $40,000 for an elementary school teacher. On the rental side, fair market rent on a one-bed-room is $810, or $15.58 an hour. Typical wages for janitors are $9.92, and they are $10.31 for retail sales persons.

This same scenario plays out across the country--Topeka, Kan., Orange County, Calif., Baltimore, Md. The fact is that communities need police officers, fire fighters and elementary school teachers. Communities need nurses and childcare workers and janitors. Yet, the country has become such that these individuals who play a critical role cannot afford to live and work in the same community.

To fight common stereotypes, NIMBYism and myths about affordable housing, apartment developers need facts. Following are five common myths with truths that dispel them.

MYTH No. 1

Affordable housing is ugly.

TRUTH Most citizens could not recognize affordable housing in their communities. Both public and private financial investors have worked with developers and architects to ensure that the design of affordable housing fits within the community. A 2002 report, "Joint Forum on Housing Density," by the National Multi Housing Council, American Institute of Architects and the Urban Land Institute, concluded that good design is "one of the most effective ways to overcome community opposition to apartment properties." While not addressing affordable housing specifically, the findings do apply. Even with a variety of densities (the number of dwelling units per acre) the face of today's affordable housing does not match the image in many people's heads.

MYTH No. 2

Affordable housing increases traffic,

TRUTH when affordable housing is sufficient in each community, people can choose to live closer to work instead of tolerating long commutes. This reduces traffic congestion and pollution. In addition, mixed-use developments that incorporate high-density housing, commercial and retail involve less traffic due to the ease of walking. Since these mixed-use developments often lead neighborhood revitalization efforts, they are often placed by mass transit stations--another way of reducing traffic issues. And finally, the National Personal Transportation Survey found that low-income households make 40 percent fewer trips per household than other households.

MYTH No. 3

Affordable housing developments increase crime.

TRUTH There is no correlation between housing and crime. One is not causal to the other. What does lead to crime is a lack of control of one's environment and a host of socio-economic factors. Crime can be higher if a neighborhood lacks jobs, community services and faces disinvestment. This, however, is more of a community development issue than an affordable housing issue. What is important to combating crime is thoughtful design, effective onsite management, security systems, good resident screening practices and a sense of pride from the residents.

MYTH No. 4

Affordable housing negatively affects a municipality's infrastructure,

TRUTH Whether discussing a city's utility infrastructure, such as its water pipelines or electrical power lines, or its social infrastructure, such as its effect on schools, high-density housing causes less strain than urban sprawl. As reported in the recent "Myths and Facts About Affordable and High Density Housing" by the California Planning Roundtable, high-density housing provides economies of scale for utility infrastructure both in trunk lines and treatment plants. Additionally, infill developments can take advantage of community services that are already paid for but underutilized. When discussing the social infrastructure, the American Housing Survey reports that single-family housing can have two to three times the number of school-aged children per household than those residing in apartments.

MYTH No. 5

Affordable housing negatively affects property values.

TRUTH The California Department of Housing and Community Development has developed a paper, "Documents and Web Sites on Affordable Housing and the Relationship to Property Values," which links readers to many studies conducted across the United States that show that affordable housing does not negatively affect property values. One study specifically looking at a low-income housing tax-credit community in Wisconsin concluded, "We have not been able to find evidence that Section 42 developments cause property values to deteriorate."

A study from Wayne State (Mich.) University, "A Review of Existing Research on the Effects of Federally Assisted Housing Programs on Neighboring Residential Property Values," tracked property values before and after affordable housing was built, and it found that affordable housing actually has an insignificant or positive effect on property values in higher-valued neighborhoods and improves values in lower-valued neighborhoods.

The affordable housing crisis in America has caught the attention of government officials, community leaders, Realtors, housing advocates and everyday citizens. As more communities realize that the lack of affordable housing will adversely affect economic growth, people will begin to demand positive change. The affordable housing profession has prepared for this by conducting a plethora of research programs and studies. Information can be found at www.naahq.org, www.nmhc.org, www.nhc.org, www.hud.gov and many other sites. It is strongly suggested that housing professionals become educated on the facts behind affordable housing's amazing track record. The first step in this process is to be able to dispute common misperceptions and stereotypes.

Wages and the Cost of Housing in Lake Country, IL
(Chicago, IL Metropolitan Area)


                       Typical Annual Salary (2004)

Annual Income
  Needed (3)                    $81,771
Police Officer (4)              $43,089
Firefighter (4)                 $33,830
Elementary
  School Teacher (4)            $38,753

The Homeownership Market in 2004
Showed the Median Priced Home(1)
(Single- and Multi-Family)
at $262,492.00

                   Typical Hourly Wage (2004)

Hourly Wage
  1BR                       $15.33
Needed to
  Afford(2)
  2BR                       $18.29
Retail
  Salesperson(4)             $8.54
Janitor(4)                   $8.65
Construction
  Laborer(4)                $21.35

The Rental Market in 2004
Showed Fair Market Rent
at $797/month for 1BR and
$951/month for 2BRs.

Wages and the Cost of Housing in Fulton County, GA
(Atlanta, GA Metropolitan Area)

                       Typical Annual Salary (2004)

Annual Income
  Needed(3)                     $69,600
Police Officer(4)               $45,000
Firefighter(4)                  $32,556
Elementary
  School Teacher(4)             $40,000

The Homeownership Market in 2004
Showed the Median Priced Home(1)
(Single- and Multi-Family)
at $223,266.00

Typical Hourly Wage (2004)

Hourly Wage
  1BR                       $15.58
Needed to
  Afford(2)
  2BR                       $18.15
Retail
  Salesperson(4)            $10.31
Janitor(4)                   $9.92
Construction
  Laborer(4)                $11.04

The Rental Market in 2004
Showed Fair Market Rent(2)
at $810/month for 1BR and
$944/month for 2BRs.

(1.) Median Home Price was calculated using the median value of
single-family and multifamily owner-occupied homes as reported
in the 200 Census for the country. This value was inflated to the
beginning of 2004 the Conventional Mortgage Home Price Index
produced by Freddie Mac.

(2.) Fair Market Rents (FMRs) are determined by the U.S. Department
of Housing and Urban Development (HUD) and are based on a survey of
recently occupied units. In 2004 the FMRs for Lake County were set
at the 50 percentile of prevailing rents. The Hourly Wage Needed
to Afford is the hourly wage that must be earned so that this rent
does not exceed 30 percent of income, a standard measure of
affordability. The concept of the Housing Wage was developed by the
National Low Income Housing Coalition.

(3.) Annual Income Needed to Quality for a Mortgage was calculated
using the average interest rate prevailing in 2003, assumes a 10
percent downpayment and the use of private mortgage insurance,
and includes estimated principal, interest, taxes and insurance.

(4.) NACo Typical Wage Rates were obtained from the NACo and
Center for Housing Policy County Survey of Affordable Housing
for Working Families conducted in April 2004.

(5.) BLS Typical Wage Rates were obtained from the Bureau of Labor
Statistics, Occupational Employment Statistics Survey, May 2003,
and adjusted to 2004.

(6.) Salary.com Typical Wage Rates are as of May 2004 and were
obtained from a proprietary database of salary information by
geographic location maintained by Salary.com.

Note: Table made from bar graph.

Julie Bornstein is President of The Campaign for Affordable Housing, a national, nonprofit organization dedicated to dispelling the negative stereotypes surrounding affordable housing. Supported by a wide range of industry leaders, The Campaign for Affordable Housing promotes the benefits of affordable housing and acts as a clearinghouse for local and regional organizations. For information, please visit www.tcah.org or call 323/330-0540.