Common‐interest housing in the communities of tomorrow

Abstract

This article offers a broad conceptual framework for understanding the rise of common‐interest housing developments (CIDs), including gated communities, townhouse and condominium projects, and other planned communities. The article begins by describing the CID as an institution and the essential characteristics and varieties of CIDs. Second, the rapid spread of CIDs is attributed to the incentives currently operating on real estate developers, municipal governments, and consumers. Third, this institution is placed in the context of definitions of public and private, and the categories of state, market, and civil society.

The article then presents the eight different “big‐picture” interpretations of this overall phenomenon that could inform the public policy framework within which CIDs are situated. They can be seen as an imperfectly realized version of the “rational choice” or “public choice” model, and reform efforts should be aimed at making choice mechanisms more effective.     

The housing system of the former Soviet Union: Why do the soviets need housing markets?

Abstract

The administrative‐command system that had been in full force in the Soviet Union between 1927 and 1990 had its own logic and internal consistency. It is now common knowledge that this economic system has flaws that led to a deepening secular decline over the past three decades. Because of ideological reasons, and an inadequate economic understanding of the capacity of their system to be liberalized, many reformers sought a third way between central planning and markets. The consensus today is that there is no third way. Among the former Soviet republics, Russia has just embarked on market‐oriented reforms and is facing a difficult and unstable transition because central planning mechanisms have ceased to function, but markets are not yet in place. This transition is particularly problematic for housing, which is a very severely distorted economic sector.

The international evidence on market economies that has accumulated over the past 20 years shows that, when housing sector distortions exist, they are predominantly found on the supply side. In socialist economies, however, housing is part of the compensation provided by enterprises and other employers. As a result housing suffers from demand‐side distortions in addition to the supply‐side problems caused by the absence of land markets, vague property rights, and burdensome urban regulations. The housing sector is already so large and distorted in these highly urban economies that overall economic reforms cannot succeed without housing reforms. In addition to presenting an overview of Soviet housing, this paper provides comparative evidence indicating that, among all the distorted socialist housing systems, Russia's probably is the most impaired. The basic elements of a market‐oriented strategy to improve housing are briefly presented.     

Do impact fees raise the price of existing housing?

Abstract

This article uses 1991–2000 data on single‐family housing sales from King County, WA, to provide new evidence relating to the effects of impact fees on housing prices. The hedonic regression method is used to examine the effects of these fees on existing housing as well as their differential effects on price as determined by housing quality.

Impact fees raise existing home prices by about 83 percent of the amount of the fee. The increase is 103 percent for high‐quality homes and is not statistically significant for low‐quality homes. The owners of high‐quality homes realize capital gains from impact fees. However, such fees do not raise the price of low‐quality homes. To the extent that low‐quality housing is more likely to be owned by low‐ and moderate‐income households, which are often composed of racial and ethnic minorities, this finding has significant policy implications for the supporters of impact fees.     

Long‐term care reform and the role of housing finance

Abstract

The Clinton administration's recently announced home and community‐based care proposals have potentially important implications not only for long‐term care policy, but also for housing policy in the United States. This article attempts to draw out some of those implications. The first section examines problems inherent in the current “medical/welfare” system of financing long‐term care, which constrains consumer choice by limiting the supply of providers to control costs and by increasing medical professionals’ control over the types of services provided in the name of quality control. The medical/welfare dominance of long‐term care policy has resulted in an overreliance on nursing homes as providers, resulting in both escalating costs and continued consumer dissatisfaction.

The second half of the article looks at recent market and policy developments in response to consumer demand for lower cost alternatives to nursing homes. These alternatives promote more consumer autonomy and control in supportive housing arrangements. A more comprehensive services and housing policy could promote these developments in an approach that combines the security of public financing of supportive services with the benefits of consumer choice, market competition, and legal protections that characterize housing markets. In such a scenario, housing finance institutions—including government agencies, lenders, developers, and investors—could play a pivotal role in the long‐term care debate not only by unlocking substantial financial resources but, equally important, by transforming the provision of long‐term care services to promote consumer choice and autonomy.     

The role of limited‐equity cooperatives in providing affordable housing

Abstract

This article develops an economic analysis of the role of limited‐equity cooperatives (LECs) in providing affordable housing. Using a model of the user costs of housing that focuses on housing externalities, it examines methods for overcoming externalities in multiunit rental dwellings.

Investment in management can reduce these externalities and thereby improve the quality of the housing environment, but the added cost excludes low‐income households from housing with a high level of management. LECs can reduce housing externalities without imposing the dollar costs of management on residents. They do this principally by attempting to attract a favorable resident population and by substituting self‐management for traditional hierarchical management. Given these findings, the article makes recommendations regarding the structure of a federally sponsored LEC program and draws implications for affordable housing policies in general. Finally, it calls for further empirical research into the desirable (and undesirable) features of self‐managed affordable housing.     

Neighborhood change and the city of New York's ten‐year housing plan

Abstract

This article examines neighborhood changes associated with New York City's Ten‐Year Plan—the largest municipal housing program in the United States. We examine indicators of change, in the context of two possible hypotheses about the program's impact: (1) neighborhood revitalization, including improved physical and housing market conditions, as well as gentrification, and (2) the concentration of poor and welfare‐dependent households, as well as the possibility of residential segregation by race or ethnicity.

Our results present a mixed picture, with some evidence favoring both hypotheses, especially when parts of the city, particularly the South Bronx, are examined separately. Specifically, the program is associated with steep declines in the rate of boarded‐up buildings and some indications of increased home values, as well as rent burdens. However, it is also correlated with increases in maintenance deficiencies and a greater proportion of poor, single‐parent, and welfare‐dependent households, but there is little evidence of accentuated residential segregation.     

Is homelessness a housing problem?

Abstract

Homeless people have been found to exhibit high levels of personal disability (mental illness, substance abuse), extreme degrees of social estrangement, and deep poverty. Each of these conditions poses unique housing problems, which are discussed here. In the 1980s, the number of poor people has increased and the supply of low‐income housing has dwindled; these trends provide the background against which the homelessness problem has unfolded. Homelessness is indeed a housing problem, first and foremost, but the characteristics of the homeless are such as to make their housing problems atypical.     

The excessive costs of creative finance: Growing inefficiencies in the production of low‐income housing

Abstract

The paper examines creative finance as a means of low‐income housing production and preservation. The low‐income tax credit has evolved as the main federal housing production program in recent years. But this evolution can only be understood as a last resort. The inefficiencies of this approach outweigh any advantages. High transaction costs, inappropriate targeting of benefits, and insufficient monitoring are among the problems. Recent changes in the tax credit may actually cost the government more. Furthermore, current policy in fact creates the same time bombs now exploding in the prepayment projects. Current proposals for housing reform and revitalization have positive features, but are either underfunded or still rely on creative finance. What is needed is a direct one‐ or two‐step low‐income production program.     

Family self‐sufficiency and housing

Abstract

Since the early 1980s, an increasing number of initiatives have been introduced to link housing programs and policies with efforts designed to promote family economic self‐sufficiency. This article reviews a set of programs that have worked to manipulate various components of the housing bundle to improve the economic well‐being of acutely poor families. They include programs that modify the characteristics and services available in the local community, alter families’ residential location, provide incentives and opportunities for homeownership, and link the provision of housing subsidies to increasing local capacity for service delivery.

This article suggests that the centrality of housing in fostering or impeding economic mobility makes it a key element in dealing with acute poverty and part of a creative strategy for intervening in the dynamics of poverty. Several important areas need to be taken into account when evaluating current policy; and multiyear evaluations will be necessary to determine the success of these programs.     

Social capital and the revitalization of New York City's distressed inner‐city housing

Abstract

This article presents evidence that social capital can be an effective component of locally sponsored low‐income housing programs. It provides a model for measuring social capital at the building level, where it may be most effective in improving housing quality and security. The study compares five programs in New York City that house the city's poorest, mostly minority residents. The surveys from 487 buildings in Brooklyn, NY, were analyzed to compare the success of programs in maintaining and revitalizing landlord‐abandoned buildings taken by the city in lieu of taxes.

Results of the analysis demonstrate that the positive effects of tenant ownership were largely mediated by the higher levels of social capital found in these buildings. These levels have implications for the survival and economic advancement of poor households and civic participation in poor communities. The study suggests the value of alternative homeownership programs.     

Private market provision of low‐income housing: Historical perspective and future prospects

Abstract

The unaided private market provision of new low‐income housing is substantially a fantasy. There is little on the horizon to alter this situation in the next decade. The income/cost gap is so substantial as to overcome the decline in household formation and positive changes in job patterns that have been advanced as bridge mechanisms.

To set the debate in context, an overview of the demographic and economic future of the United States is provided and mainstream forecasts of economic and demographic trends affecting housing supply and demand are reviewed. Particular attention is given to demographic maturation and shrinkage, household diversification and segmentation, and income and poverty dynamics.     

Politics and the implementation of public policy: The case of the US military housing allowance program

Are bureaucracies in fact controlled by the president, Congress, or legislation? We analyze a 1998 policy change in the Department of Defense’s (DoD) $6.5 billion annual military housing allowance program. Results show that both the president and Congress were able to influence the bureaucracy, even in the presence of an exceedingly specific law that outlined the manner in which the DoD was to allocate the funds. After policy implementation, allowances were disproportionately higher in locations that (a) supported the president in the 1996 election and (b) were represented by members of the House or Senate Armed Services Committees.     

Moving out of poverty: Expanding mobility and choice through tenant‐based housing assistance

Abstract

Historically, federal housing policy has contributed to the concentration of poverty in urban America. Moving out of poverty is not the right answer for every low‐income family, but tenant‐based housing assistance (Section 8 certificates and vouchers) has tremendous potential to help families move to healthier neighborhoods. This article explores the role of tenant‐based housing assistance in addressing the problem of concentrated inner‐city poverty.

The Section 8 program by itself does not ensure access to low‐poverty neighborhoods, particularly for minority families. Supplementing certificates and vouchers with housing counseling and search assistance can improve their performance; a growing number of assisted housing mobility initiatives are now in place across the country. The U.S. Department of Housing and Urban Development (HUD) should continue to fund these initiatives and increase their number over time. HUD should also strengthen incentives for all housing authorities to improve locational outcomes in their Section 8 programs.     

Do housing bubbles generate fiscal bubbles?

This paper examines the effects of the most recent U.S. housing bubble on the fiscal policy of California cities. We use an instrumental variables approach that helps isolate the fiscal consequences of house price appreciation by taking advantage of the influence of local topological constraints on the elasticity of house prices with respect to interest rates. Our analysis generates three main findings. First, despite Prop 13 fiscal constraints, rapid house price appreciation has a strong effect on property tax revenue. Second, the resulting increase in property tax revenue was largely offset by a reduction in other local tax revenue. This offsetting response leaves total city expenditure unrelated to local house prices. In that sense the housing bubble did not produce local fiscal bubbles. Third, we find that fiscal adjustments to house price appreciation depend on local political institutions.     

Does mobility matter? The neighborhood conditions of housing voucher holders by race and ethnicity

Abstract

Mobility is one mechanism used to address the federal goals of deconcen‐trating poverty and minorities. The Housing Choice Voucher Program relies on participants to make residential location decisions consistent with these goals. Our research investigates the level and impact of mobility on the neighborhood quality of voucher holders, their neighborhood conditions by race and ethnicity, and perceived obstacles to mobility within the jurisdiction of a Southern California housing authority.

About one‐third of the sample moved during the study, and moving resulted in improved neighborhoods for only one subset of movers. Minorities live in more impoverished, overcrowded neighborhoods than nonminorities, even when controlling for mobility status, contract rent, and other factors. Further, most voucher holders see the lack of rental units as a major obstacle to mobility. These findings suggest that current policy is not uniformly achieving deconcentration and that real and perceived barriers to mobility exist, especially for minorities.     

Spaces of exception: governing fuel poverty in England’s multiple occupancy housing sector

Homes in multiple occupancy (HMOs) – residential properties containing common areas shared by several households – are a growing feature of the housing landscape across the UK. They have often been subject to political stigmatization as a result, in part, of comprising poor quality dwellings. This paper uses a “spaces of exception” framework to explore the juridical and material mechanisms involved in the rise of fuel poverty among people living in HMOs. Having analysed evidence from interviews, census data and the secondary literature pertaining to the English context, we highlight the processes that have led to the biopolitical othering of this housing stock in institutional and infrastructural terms. We argue that the expansion and persistence of fuel poverty in HMOs are promoted not only by the disproportionate concentration of low-income residents in relation to the rest of the private rented sector, but also by the socio-technical configurations that underpin this type of housing. Fuel poverty can thus be seen as the joint outcome of broader practices of legal, political and material delegitimization.     

Advance Australia fair? Anatomy and pathology of an 84‐year trade dispute

• This paper examines the very long‐running trade dispute between Australia and New Zealand concerning a ban on the importation of apples on the basis of fire blight disease present in New Zealand. This particular example illustrates the more general case of the frequent conflict between science and politics in regard to technical trade barriers. This same issue of fire blight disease in apples became the subject of a protracted World Trade Organization dispute between the USA and Japan, with New Zealand a third party to the USA, and Australia a third party to Japan. The World Trade Organization Dispute Settlement Body, and subsequently the World Trade Organization Appellate Body, ruled in favour of the USA (and thus New Zealand) on this issue. Despite this ruling, Australia has continued its ban on New Zealand apples and the issue has become highly politicized in Australia.
• This case highlights the need for World Trade Organization rules to be changed to ensure that its rulings become binding on third parties and other World Trade Organization members. This would ensure that once an issue is decided through the full World Trade Organization conflict resolution process, the principles established should become generally applicable to other instances of the same scientific issue.

Copyright © 2005 John Wiley & Sons, Ltd.     

Comment on Shishir Mathur's “do impact fees raise the price of existing housing?”

Abstract

Impact fees raise the price of new homes, which pay the fee directly, and existing homes, which serve as substitutes for new homes. I argue that such fees are excessive because the net economic benefit of additional homes is not included in the calculation and because more efficient financing tools exist. An impact fee actually pushes prices higher than the fee because it is paid when construction begins but collected at the time of sale. Costs are increased by construction period interest and other costs determined as a percentage of the sale price.

Local governments calculate impact fees incorrectly by not including the indirect and positive impacts from construction and occupancy. If these added net benefits were also considered, the fiscal impact would be less and little or no fee would be required. Moreover, other methods for financing infrastructure are available in most states, so impact fees are unnecessary.     

Crime,New housing,and housing incivilities in a first‐ring suburb: Multilevel relationships across time

Abstract

Concepts deriving from criminology, housing policy, and environmental psychology are integrated to test two ways that housing conditions could relate to crime in a declining first‐ring suburb of Salt Lake City. For existing housing, we use a model to test whether housing incivilities, such as litter and unkempt lawns, are associated with later crime. For new housing, we test whether a new subdivision on a former brownfield creates spillover reductions in nearby crime and incivilities.

Police‐reported crime rates were highest for residences near the brownfield and lowest for those farther away. After the subdivision was constructed, this linear decline disappeared, reflecting less crime adjacent to the new subdivision, but also more crime farther away. A multilevel analysis shows that incivilities, particularly litter and unkempt lawns on the block, predict unexpected increases in crime. Both brownfield redevelopment and reductions in incivilities may be important ways to improve declining suburban areas.     

Fair treatment,fair play? The relationship between fair treatment perceptions,political trust and compliant and cooperative attitudes cross-nationally

Obtaining citizens’ voluntary compliance with political decisions is a fundamental democratic challenge. Fair treatment by public officials plays a key role in theoretical and empirical studies on citizens’ compliance and cooperation. Yet it is unclear whether citizens within different societies react to (un)fair treatment in the same way. Using multilevel structural equation modelling and multilevel regression analysis on the European Social Survey 2010–2 (N = 52,458), this article shows that perceptions of fair treatment by police officers are associated with higher levels of trust in political institutions and in turn stronger compliant and cooperative attitudes of citizens in 27 countries. Yet the link between perceptions of unfair treatment and institutional trust is stronger in countries in which fair behaviour is more prevalent. While fair treatment is often considered to be a universal norm affecting citizens in a uniform way, this article sheds light on important cross-national variations.