'How Do You Mean?'

Four 'must-dos' can help us arrive at a comprehensive solution on affordability.

By: Bob Taylor, RCE, CEO of the Grosse Pointe Board of REALTORS®.

My apologies to the purists reading this: “How do you mean?” is terrible English. However, it was a phrase taught by one of the best Dale Carnegie instructors in the country and works well because it is perceived as non-confrontational and unlikely to make people defensive. As a result, for 47 years, it has served me well. So, let me ask again as it relates to affordable housing: “How do you mean?”

I ask because, while our members are passionate about affordable housing, there’s no easy solution to our affordability woes. For there to be a comprehensive solution, many factors need to be considered. These include the home (or the dirt if you are a builder) and access to capital for both buyers and builders. Other factors include sustainability, infrastructure, the cost of materials, and the cost to occupy, whether as an owner or tenant.

In Southeast Michigan, for example, there is a neighborhood where a home built in the 1950s sold for $200,000 just 20 years ago. Now, in that same subdivision, a house that will be torn down and replaced starts at $400,000. Add in the inconvenient truth that affordable housing is frequently not located near jobs, municipal services, quality education, or reliable public transit. These considerations make the concept of “affordable” relative.

Commodity prices have also driven up the cost of traditional homebuilding materials to the point where the private sector cannot buy the land, build affordable starter homes, and make money. Additionally, most, if not all, building ordinances are now 50 or more years old. Want to build a 3,500-square-foot home made from shipping containers? How many variances would someone need to apply for before receiving a permit? Interested in adding solar power? Some municipalities prohibit it from being retrofitted on a roof because it is aesthetically unpleasing, and others disallow panels as free-standing structures in the yard. What option does that leave?

Finally, there’s the well-documented national disgrace of inequitable property ownership resulting from years of systemic disenfranchisement of sectors of the American population.

All these factors and many more make the solution to creating more affordable housing anything but simple. Single-dimension solutions provide only short-term fixes, kicking the can of a comprehensive solution down the road.

So, what do we think a program to increase affordable housing should look like?

  1. It must be available to all (no qualifiers): The program should also empower those who have been systemically disenfranchised over time. What form that empowerment takes remains to be seen. It will be interesting to see what comes from the state of California’s Task Force to Study and Develop Reparation Proposals for African Americans formed in 2021, as that state is a frequent trendsetter.
     
  2. It must be friendly to our municipalities: Higher density maximizes municipalities’ return on tax dollars but also increases demand on infrastructure. Is the answer the elimination of single-family zoning, or, with only 3.9% of the land in the U.S. developed for residential usage, does this require an investment in transportation so people can live where they wish and commute?
     
  3. It must include ubiquitous quality services and a safe “way of life”: Access to education and health care, among many other things, cannot be taken for granted by some, while others must struggle to access these services every time they make a major decision.
     
  4. It must involve revamping municipal ordinances: Many of these ordinances need to be changed, and when they are, they should be structured to allow for change in a timely fashion instead of every 50 years. Alternative energy sources, 3D printing of homes, and multigenerational housing are all becoming more prevalent, yet home builders and homeowners frequently run up against regulatory issues at the local level simply because such uses are not addressed within municipal ordinances.

“Under all is the land.” Let’s never lose the wisdom of the statement that opens the preamble to our Code of Ethics. The crafting of the American dream took into consideration three things uncommon at the time: self-determination, the right to vote, and the right to own real property. Additionally, in the last 20 years, homeownership has proved itself to be both a buoy that can keep the national economy afloat and an anchor that can sink the entire global economy. Consequently, the need to work hand-in-hand with our members to craft a comprehensive solution to the dream of affordable housing cannot be understated.

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