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Why too many households can’t afford the housing that’s available

Some thoughts about the ‘affordable housing’ issue, how it affects us all, and what we can do

Byron Stookey, on behalf of Brattleboro Area Affordable Housing, gave this crash course on housing issues at the Brattleboro Citizens’ Breakfast on Nov. 11. Most data are from the 2010 Census, the National Low Income Housing Coalition, or Vermont Housing Data.


Let me say, first, that, the way it’s often used, “affordable housing” is not a helpful term.

That’s because the term “affordable” is based on no particular standard. Any housing can be affordable — or not. It depends entirely on income. A $3,000-a-month apartment is affordable, if your income’s $120,000.

So I’m going to call the category of housing we’re discussing here “low-cost” or “low-rent.”

There is, though, an accepted standard that takes into account both cost and income. It says you shouldn’t spend more than 30 percent of your household income, whatever it is, on housing costs.

Housing cost, if you rent, means rent plus all utilities. If you own your home, the 30 percent should cover mortgage, taxes, and insurance. Whether the housing’s simple or palatial, that’s the standard for affordability.

The problem for a bunch of years has been that there are too many households who, by the 30-percent standard, can no way afford the housing that’s available.

* * *

So why is there a shortage of low-cost housing here?

One reason is simple arithmetic.

Between 1990 and 2010, the size of the average Brattleboro household shrank from 2.30 people to 2.09 — a 9-percent reduction. But the population stayed about the same. So, to house the same population, you need 9 percent more housing.

But we’ve produced nowhere near that much. No private developer, for a number of years, has built low-cost, even moderate-cost, homes. Cersosimo’s Sherwood Circle was the last moderate-cost development — and that was 15 years ago.

And I don’t know the last time that a private developer built multi-family housing. The remarkable Windham and Windsor Housing Trust converted the Daly Shoe building and is making apartments above the new Brattleboro Food Co-op. But otherwise, the Housing Trust’s work has been mainly rehab, and all of it dependent on diminishing government help.

Without such help, it simply isn’t possible these days to build decent houses or apartments, offer them at prices that ordinary working people can afford, and make a profit.

So Cersosimo and others switched to building for the well-off. Last I knew, the median price of new homes, in Vermont, was $305,000.

* * *

And, to make things worse, we keep losing low-cost housing.

Within two blocks of here, since our organization’s been around, 15 or more good apartments have been demolished because someone had other designs on the land. And upper-story apartments on Main Street have been converted to offices.

The same things have happened on Western Avenue and elsewhere. In no case were those apartments replaced.

Another reason for the low-cost housing shortage is attitudes, which are less of a problem here than in a lot of places. But low-rent housing, especially, triggers resistance.

At the extreme is the rumor that the welfare office and Housing Trust bus people to Brattleboro from the South Bronx — which they don’t.

Or it’s said that renters overcrowd our schools. In fact, renters here have fewer children per household than homeowners.

Others say we’re getting to a “tipping point,” where too many renters will put the town onto a slippery slope. The fact is, our percentage of renters has been gradually decreasing: from 50.2 percent in 1990 to 48.7 percent last year.

Sometimes these anxious attitudes are stated, sometimes not. But they affect public perception and town decisions, making us less hospitable than we might be to housing efforts.

* * *

Probably the biggest cause of the growing need for low-cost housing is that wages have not kept up with the rising costs of housing.

Between 2007 and 2010, rents in the U.S. regularly out-ran income. In total, in those years, rents increased 8.1 percent, while renter income dropped .6 percent. And that’s been a long-term trend.

So working people who in the past might have afforded a modest single-family home are now trapped by low wages in rental housing.

As a result, pressure in the rental market is building.

And — oh, yes — women. Women have been a major cause of the growing need for low-cost housing.

From 1979 to 2008, while hourly wages barely changed, the costs of housing rose steadily. Yet, through most of that time, most families, somehow, managed the rent or mortgage.

They managed because the percentage of women who had jobs rose together with the rise in housing costs. Wages were stagnant, but household income grew. So the extent of our housing problems was hidden.

But now two things have changed.

The percentage of women in the labor force has reached a plateau. In Vermont in 2008, their rate of employment caught up with that of men. So the workforce of women won’t be growing a lot.

The other thing that’s happened is our economy collapsed. In many households, there are now no earners. Or they’ve settled for poorer jobs.

So for a lot of years, women shielded us from widespread housing problems. Now those problems are less escapable.

* * *

So how are people managing?

Mainly, they’re paying more than they can afford for housing — often, a lot more.

In 2009, 35 percent of Vermont homeowners were paying more than the accepted 30 percent of income for housing. And 15 percent were paying more than half their income.

Renters were worse off: 48 percent paid more than 30 percent of their income; 21 percent, more than half.

Or people manage in other ways. They or their spouse takes another job.

Or they stay with their parents — or move back in.

Or they’re at Morningside Shelter, where the population has shifted from unemployed single men toward working people and families.

Or they move to Bellows Falls, or Hinsdale, N.H. It’s not an accident that, a few years ago, we began running buses from Bellows Falls.

Which, parenthetically, gets me to my biggest fear for Brattleboro: that, if we’re not careful we could become one of those awfully attractive towns where the people who do the basic work can’t afford to live any more.

* * *

But doesn’t the government help with housing needs? Yes.

The federal government, from 1937 until the late 1970s, played a serious and growing role in housing. Since then, it has been backing away.

There’ve been two big changes.

The first has been a major shift from supporting new low-rent housing to reliance on individual housing vouchers.

The low-income individual or family gets a Section 8 voucher, which means the government will help pay their rent, if they can find an apartment with a cooperating landlord and with rent below the maximum the government will subsidize.

It’s a good program in that it makes a variety of housing available to people and gets away from the bad old ghettoizing housing projects.

But there are two problems.

One is that there are never enough vouchers. In Brattleboro, vouchers are administered by the Brattleboro Housing Authority, which now has a three-year waiting list and has stopped taking applications.

The other problem is that allowable rents are low, which makes finding a qualifying apartment difficult.

But the basic fact about the federal role in housing is that government support of low-cost housing, in any form, has become low priority.

Thirty-five years ago, the budget of the Department of Housing and Urban Development was $89.8 billion. For 2012, the president has requested $42.8 billion. (Those are roughly constant dollars.)

Yet, curiously, government funding for housing assistance has been increasing. But it isn’t help for low-income people — it’s help for the better-off.

This year, homeowners — especially wealthy homeowners — will get more than three times as much in housing help as the entire Housing and Urban Development budget.

That help takes several forms, none of which you’ll find listed as expenditures in the federal budget, because they’re in the form of tax deductions. But they’re expenditures nonetheless — as much as any other commitment of public funds.

The biggest help to homeowners is the mortgage interest deduction. As you know, you can deduct from your taxable income the entire interest you pay for the mortgage on your home — up to $1 million mortgage dollars.

Reducing that million to, say, $200,000 would give the government enough new revenue to improve a lot of housing.

You may not know — I didn’t — that you can also deduct mortgage interest on a second home!

The mortgage interest deduction alone costs the government, annually, about $100 billion.

Plus, you can deduct your property taxes. And the first $500,000 of capital gains when you and your spouse sell your home.

These deductions obviously are regressive. And they benefit only homeowners, not renters.

* * *

So, what are some answers?

⦁ As a start, I think — and hope — we’re beginning to look at rental housing differently.

Usually, at least in the suburbs and rural areas, rentals have been seen as lower-class housing. And the government, by pushing homeownership, has encouraged that idea: if you’re a good American, you own a home.

But, in the last few years, people have started to wonder. Ownership has often proven a bad idea. And renting has been found to have advantages.

⦁ Also, we need to change what we wish for in a single-family home, both to make homes more affordable and to help save the planet. We’ve been going crazily in the wrong direction.

In northern New England, you don’t see it so much. But, especially in suburban developments elsewhere, we’re building ever bigger houses: with four bedrooms, three baths, a mostly idle gourmet kitchen, and a two- or three-car garage.

These homes are designed as though there were still six children and a wife who spent her days at home, and as though land, materials, and fuel were infinitely available.

Instead, what we badly need are energy-efficient, compact homes, ideally built in clusters to reduce costs. That way, young couples and downsizing elderly people could have houses that are affordable and manageable — what I think of as starter/ender homes.

⦁ And we need to do a better job of preserving the multi-family housing we’ve got.

Brattleboro Area Affordable Housing has been working on two fronts: We’ve worked in the Legislature to get serious enforcement of rental housing codes, and in Brattleboro, devised and run for the town the Rental Housing Improvement Program.

This program provides cheap loans for landlords to bring buildings up to code, make basic repairs, or improve efficiency.

If we don’t preserve the housing we’ve got, nothing else will make much difference.

⦁ Another thing our organization’s been doing is helping single-family homeowners make apartments in their homes.

I said earlier that no private developer is building new rental housing. But our Apartments-in-Homes Program, slowly and quietly, has been doing that.

So far, we’ve midwifed 38 “accessory” apartments, in Brattleboro and outlying towns. This is the cheapest way there is to create decent, low-cost housing. It’s energy- and land-efficient. And, often, the rental income enables homeowners to keep their homes.

⦁ In the old days, factories built worker housing.

But, today, we do the opposite: we give extravagant moving and housing help to senior executives.

We’ve been trying to sell the idea of modest help to non-senior people who are trying to buy a house or move to a new apartment.

We’ve talked with a dozen companies, and Brattleboro Savings & Loan came close to establishing a program. The plan there would have helped maybe five employees in an average year at a total cost to the bank of maybe $12,000. In the end, the bank’s financial situation was too tight.

So we’d love your help in finding a receptive employer and would eagerly provide a model proposal.

⦁ We’ve also tried, in both Brattleboro and Montpelier, to sell the idea of tax abatement.

As an encouragement to builders, the abatement would phase in property tax on new low- or moderate-cost housing.

* * *

Then there are the two biggest answers to our housing problems.

• The first is to pay people a livable wage.

To afford a two-bedroom apartment at this year’s median rent in Brattleboro, you’d need to earn $19.73 an hour. But the average renter wage in Vermont is $11.03. To afford that apartment at our average wage, you’d have to work 72 hours a week.

If workers earned even close to a livable wage, that would solve probably 70 percent of our housing problems.

But we could never rely entirely on the market to provide housing. Because, no matter how good wages are, there’ll always be poor people unable to work, because they’re elderly or disabled, or for other reasons.

And to provide decent housing for those people requires public help.

⦁ So, we need to revive the government’s commitment to housing.

And right now, we have an extraordinary chance to do that: to provide permanently for the building of at least some new low-cost housing.

Congress, before the economy crashed, approved the National Housing Trust Fund, a dedicated permanent fund for new housing similar to Vermont’s Housing and Conservation Trust Fund.

So a federal fund is now there in theory, but proponents are still looking for the permanent source of funds. If we did away with the mortgage interest deduction just for second homes, that would fund the trust handsomely. But, at least for now, we have to find another source.

* * *

Which gets us finally to the question: how is any of this going to happen?

I don’t have an answer. Except I know that our housing problems won’t get solved if we leave it to the victims to solve them.

In the Brattleboro Selectboard room, the Vermont Legislature, Congress, and the White House, low-income people, alone, are no match for more powerful interests. They need as allies those of us who have more time, more resources, or some clout.

Or, more accurately, we need each other.

Because shortage of decent, affordable housing is a problem for the whole society. Kids from shabby housing are handicapped in school. Families who pay too much for rent shortchange food and health care. Housing that’s not maintained blights the whole community. Economic development doesn’t happen if there’s inadequate housing for workers.

And there just is no way we can be a decent community, if we let people be ill-housed.

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Originally published in The Commons issue #129 (Wednesday, November 30, 2011).

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