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Councilors urge city to increase affordable housing

By Peter Rice
Friday, October 27, 2006

With milk in one hand and the other on the door, 16-month-old Tyler waits for Dad to let him outside to play. "He is our main motivation for us being here," Othole said. "If he didn't come along, we'd still be in apartments."

Photo by Erin FredrichsTribune

Tribune

With milk in one hand and the other on the door, 16-month-old Tyler waits for Dad to let him outside to play. "He is our main motivation for us being here," Othole said. "If he didn't come along, we'd still be in apartments."

Kevin Othole strolls down the sidewalk of his Martineztown neighborhood with son Tyler. Othole and his family are among the growing population of residents seeking affordable housing. With help from a local nonprofit, they live in a home valued at $145,000. "We now have a home, a place to look forward to at the end of the day," he said.

Photo by Erin FredrichsTribune

Tribune

Kevin Othole strolls down the sidewalk of his Martineztown neighborhood with son Tyler. Othole and his family are among the growing population of residents seeking affordable housing. With help from a local nonprofit, they live in a home valued at $145,000. "We now have a home, a place to look forward to at the end of the day," he said.

Smart Box

Terms to know

"Affordable housing:" No one standard definition exists, but generally it means decent housing that middle- to low-income people can buy and maintain with about 30 percent of their income or less.

"Workforce housing:" When you say "affordable housing," some people conjure up images of massive Soviet-style apartment complexes rife with crime and drugs. "Workforce housing" is meant to say something very different, and takes on special meaning in areas where housing prices are out of reach of decently paid working professionals.

"HUD:" The federal department of Housing and Urban Development. It gives various grants to cities and other organizations to fund affordable housing projects. Most of the money the city of Albuquerque spends on housing comes from these grants.

"Drive until you qualify:" Houses can be made affordable through the free market, or failing that, some sort of government subsidy. This saying refers to the tendency of free-market affordable houses to be located on the outskirts of cities.

"Median:" Often used just before the words "income" and "home price," it refers to the middle number in a range of numbers. Not to be confused with average.

"Gentrify:" When rising land values or redevelopment initiatives make neighborhoods more costly, discouraging lower-income people from moving there and driving out low-income renters. Longtime residents who own also have a big financial incentive to move.

The problem If property values keep going up, and construction costs follow close behind, Albuquerque faces increasing gentrification, driving low income people out of core neighborhoods, creating more stratified communities and leading to long commutes two and from more affordable areas. That causes all sorts of practical social problems, according to affordable housing advocates:

Adult children have a harder time taking care of their parents, who are more likely to live farther away.

Neighbors are less likely to know one another in more transitory neighborhoods, leading to more crime and generally less stable communities.

Long commutes hurt the environment, create transportation infrastructure headaches for governments and, given rising gas prices, place a financial burden on people who, tragically enough, moved away from the city to save money.

Possible solution: Status quo.

Advantages: Avoids massive public spending, unpopular regulation and lets the free market take care of things.

Disadvantages: The current mix of governmental and nonprofit housing work won't have much of an affect on the situation if costs really take off.

Possible solution: The city's recently approved Workforce Housing Initiative.

Advantages: If approved by voters next November, the plan would raise an additional $5 million per year for new projects, effectively doubling what the city now spends on housing.

Disadvantages: It's almost the same situation as the status quo. If the property value/construction cost situation really gets out of hand, the $5 million alone won't have much of an impact on the problem.

Possible solution: Ramping up affordable housing subsidies.

Advantages: Could potentially have a major impact on the problem, especially if done before land and construction costs get way out of hand (California style).

Disadvantages: We're talking about trainloads of money, potentially, and it would have to come out of taxpayers' pockets.

Possible solution: Make the developers do it.

Advantages: Often called "inclusionary zoning," developers could be required to add some element of affordable housing to their new projects.

Disadvantages: People don't generally like being told what they can and cannot do with their property, especially by the government, so the idea is at best, insanely controversial.

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The bar creeps higher.

Property values rise. Construction costs balloon. And the minimum income needed to buy a house around Albuquerque climbs perilously higher.

That leaves low- and middle-income working families in an increasingly tougher search for a place to call home, even as the city prepares to double its housing subsidies.

In some neighborhoods, those who make it into quality affordable houses are doing so by the skin of their teeth.

Just ask Kevin Othole, who with his wife, Cathy Ahiyite, moved into a new, 1,240-square-foot house in Martineztown in July of 2005. Ahiyite, who manages an office, and Othole, who teaches fifth grade, had looked on the open market for their first house without much luck.

The family, which includes 16-month-old Tyler, did find "a lot of fixer-uppers . . . not in the greatest condition," Othole said.

Then they got lucky, finding a house developed by the nonprofit Greater Albuquerque Housing Partnership.

Marshalling a combination of government grants, corporate donations and more traditional bank loans, the organization develops houses generally targeted at those earning less than 80 percent of the area's median income, a dollar figure that changes depending on the size of the family.

The process is complicated. The bottom line is not: Othole and Ahiyite now own a modest but respectable three-bedroom house, valued at $145,000, in the middle of the city.

"They gave us a lot of assistance," Othole said, referring to the housing partnership. "By ourselves, we'd probably still be looking for a house."

The question for Albuquerque today is this: A decade or two from now, will we look back on the Othole/Ahiyite house buy and marvel at how easy and inexpensive it all was? Or will we look at it as the foothold on which the city tamed at least part of the real-estate market on behalf of working families?

The Western explosion

To be sure, other parts of the country have it worse than we do. California, for instance, features median home prices above $500,000. The trend is old news by now, having been repeated in Western locales as San Francisco, Los Angeles, Portland, Seattle and Denver. Some version of the story even plays out in Santa Fe.

Sometimes encouraged by massive municipal reinvestment, cities become too expensive for all but the top incomes. Yet the cities still have jobs, so people, as the saying goes, "drive until they qualify." Suburban bedroom communities pop up, and commutes get longer, as the high prices radiate out from the city centers like shockwaves from a bomb. Neighborhoods become more socially stratified. Employers have a harder time finding workers.

"Our wages are not keeping up with the cost of construction, the cost of land," said Louis Kolker, the executive director of the housing partnership. "You're losing middle class neighborhoods. . . . What you see in California is coming to New Mexico. How could it not?"

Kolker's construction costs have risen 35 percent in the last year and a half. The median price of a single-family home cashed in at $121,000 back in 1996 - it's now up to $194,000, according to the Albuquerque Metropolitan Board of Realtors.

And over at the Sawmill Community Land Trust, another Albuquerque nonprofit that develops affordable homes, the pool of people who can buy a home is shrinking, says Executive Director Connie Chavez.

Just a few years ago, her organization could help people who made 50 percent to 60 percent of the median income buy a house.

Now, even with a subsidy lowering the up-front price by tens of thousands of dollars, only those in the 70 percent to 80 percent bracket can afford to buy. The federal aid that helps fund the housing projects, meanwhile, is reserved for those at 80 percent or lower. For those who drown in that rising tide, the only thing left to do is rent.

"It's kind of scary," Chavez said. "Affordable housing is becoming difficult."

Building a new plan

The city is working to address this, but it's not clear if its efforts will reverse the trend or just chase it a little.

This past August, the City Council passed a bill sponsored by Councilors Debbie O'Malley and Isaac Benton that would have the city team up with developers and spend about $5 million per year on affordable "workforce" housing projects. Voters must approve a bond package next fall.

That would effectively double the city's investment in housing, adding to the $5 million in federal grants it channels to projects developed by such nonprofits as Sawmill.

Benton and O'Malley say they want diverse neighborhoods where people with varying incomes live next door to each other. They want jobs to be close, minimizing commute times and outlays for gas. They want grown children to be able to live close to their parents and grandparents, creating more cohesive communities that look out for each other.

"We pay the social costs - the rest of us do - if we don't provide for that," Benton said.

The workforce housing initiative is a good start, but "I think we're way behind the curve," he said. "We're in a holding action."

The social goals may be fairly bi-partisan, but in trying to meet them, affordable housing advocates run into some harsh political realities. The two obvious solutions involve unprecedented public spending (buying lots of land, subsidizing lots of construction) or controversial regulation (forcing developers to build affordable units next to new construction) or both.

So it's perhaps not surprising that Mayor Martin Chavez takes a relatively conservative stance on the issue.

Of all his priorities, "It's not the number-one thing," he said. The housing market is cyclical, he argued, and it makes sense to see where the current lull and O'Malley's initiative takes the situation.

"We shall see," Chavez said. "If I find the panacea, I will hold a press conference."

To O'Malley, it would be better to strike while land is still relatively cheap. As the problem gets worse, she said, fixing it will get more expensive.

"I want to be able to walk down the streets of our city and say, `Yeah, we had a plan,'" she said.