The Plight of Affordability

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I Suppose We Already Knew This, But..

Jenny Schuetz is a housing researcher for the Brookings Institute.  In an article on Feb. 3, 2022, in the Eugene Weekly, she explains what is happening here in Valparaiso.

“America’s affordable housing crisis is deepening. Rents are rising faster than income, creating a wider gap between what renters can afford to pay and the cost of market rate rentals.”

Schuetz says much of the problem stems from low housing supply.

But zoning plays a role also.  The article refers to the Eugene, Oregon area, but seems equally applicable to Valpo. “The majority of the buildable land (in Eugene) is reserved for single-family homes. Restrictive Zoning has led to a housing shortage,…allowing the wealthy to take control of the housing market.” The article then talks about wealthy Californians moving north to Oregon and “they can pay more than lower income families for existing properties that might sell for less.”  Sound familiar?   

“The wealthy families win the bidding war, leading to neighborhoods filled with people who can afford to pay higher housing costs and allowing developers to charge more for new developments. The end result, Schuetz says, is lower-income people being forced out of the housing market entirely.”

Five years ago, Project Neighbors could purchase a small, old house in poor condition for $80,000, or an empty buildable lot for $30,000.  Today that same house will cost $150,000 or more and that same lot could cost $100,000.

Again, five years ago, we would buy that dilapidated house or the empty lot and get to work.  With generous volunteers, we’d fix up the old house or build a duplex on the empty lot (if we could get through the BZA) and have housing which could rent for about $500 a month. That monthly rent is predicated on not paying property taxes which is a benefit of the property being owned by a not-for-profit organization. 

At $500 per month, the housing is affordable, based on HUD standards, for a family with an income of $26,000 per year.  If property tax is added in, the necessary income is $32,000 per year.

Are there families in Valpo with these incomes? You bet.

But that was five years ago.  Today those numbers do not work. 

If we consider the recent, dramatic inflation in the cost of building materials, the plight of affordability becomes even more dire.

A duplex being built by Project Neighbors now…photo taken just before the big snow.

While much of our attention focuses on the most vulnerable – the homeless, folks living in tents, single mom’s – this rapidly evolving crisis is impacting many more than just the very poor. Retail workers, teachers, construction workers, servers in restaurants, childcare workers, and lots of other folks earn less than enough to comfortably rent or purchase in a gentrifying community.

There are solutions.  Stay tuned.

-Paul Schreiner

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