All About Housing

It’s a basic premise that before you can solve a problem you must first properly define the problem. If you don’t know where you want to go, you don’t know how to get there. If you are fighting a war, you need a strategy and a definition of victory.

However, with housing, affordable housing and building communities, trying to understand the problem is much more difficult. So, let’s start with definitions of commonly used terms.

NIMBY

NIMBY: Not In My Back Yard. This is a typical attitude of neighborhoods, who may support or not support a particular land use, but they sure don’t want it next door and anywhere near them. An example would be Group Homes, which are homes where a number of people who are not members of the same family live, perhaps seniors or a halfway house for troubled teens, with a supervisor or care-worked on site. Nice idea, but NOT in MY Back Yard/ neighborhood.

CAVE People

CAVE People: Citizens Against Virtually Everything. These are good citizens who are active at opposing anything that represents change. Zoning change? – no. New Apartments? – no. Remodeling a historic structure? – no. Etc. ad infinitum. Sometimes they get their way and suppress other people’s ideas, and sometimes the other people out vote them. This term may perhaps be age dependent.

Gentrification

Gentrification: The active conversion of old and very old neighborhoods by remodeling homes and tearing down very old homes to build new and more modern structures, aka McMansions. This applies to highly sought after locations, close to work, shopping and amenities, thus younger and wealthier folks want to live in the area, but not in dilapidated houses. It certainly freshens up an area, may reduce crime and replace unlivable residences. But the negative is that it drives up property values, and taxes, and thus, may make the original residents unable to afford to live in the home they have been in for decades. So, the original residents have to move out. They are able to sell their homes for a nice price, but now, where will they move that they can afford? And they will miss their old neighbors and neighborhoods. So, Gentrification has pros and cons, like everything.

Urban Renewal

Urban Renewal often goes along with gentrification. Here public funds are used to update and rebuild infrastructure, streets, sidewalks, utilities, parks, and the like, revitalizing the desirability of the neighborhood. The goal is usually to make an area nicer, more sustainable, more equitable, and reduce crime. However, it may also result in possibly driving out the older residents. Changing the look of a neighborhood does not automatically change the economic status of the residents of that neighborhood, but it may change who the residents are.

Urban Sprawl

Urban Sprawl is the result of subdivisions spreading out of from the urban core. They are made up of low-density housing (detached on a separate lot) essentially into suburbs and exurbs (areas beyond the suburbs). One issue is that sprawl requires more car usage, thus pollution, street maintenance, traffic congestion and parking issues. Wildlife habitat and agricultural uses are lost. However, people seem to enjoy moving away from the congestion, noise and crime of a central city. Don’t you really want a backyard for your kids to play in and enjoy? A term that goes along with this is …

Densification

Densification results when most everyone moves into high rise apartments downtown so they can walk to work and shopping. Think The Pearl. There is less traffic and more convenience. Off set by less privacy and personal space and more noise.

Affordable Housing

Affordable Housing refers to housing that is within the budget of low to moderate income families, and that is defined as no more that 30% of the household’s gross income, including rent or mortgage and utilities. This ensures families live in safe, stable, decent homes without spending an excessive portion of their income on rent or mortgage payments. For Bexar County the Area Median Income (AMI) is $69,755, according to the Federal Reserve. Thus, your monthly payment for housing should be no more than $1,744 for a family of four. Then, low-income housing is defined as housing for those earning 80% of the AMI, which translates to a maximum housing cost of $1,395 per month.

Are we in a Housing Crisis?

The Housing Crisis resulted from the after-effects of the Great Financial Crisis of 2008. The many foreclosures resulted in a major decline in home construction in the following years. Going back to the 1960’s we built about 1,000,000 homes per year on average and reached a peak in 2006 of 1.654-million homes per year. But with the 2008 housing crisis, building dropped dramatically with the result that by 2011 construction fell 73% to only 446,600! Builders did not get back up to 1,000,000 homes per year until 2022 and 1,050,000 starts in 2024.

Some say there is a crisis in that we are not building enough homes. I disagree, in that builders would be delighted to build more homes. However, finding the developable land and then going through the roughly two-year process to develop lots is a drag on deliveries. Municipal entitlements can be very cumbersome and costly adding about $24,000 per home, and then land costs are high, too. The biggest draw back now is higher interest rates, from a low of 4% to a current 6.7%, making home purchases harder to afford. This means builders must build less expensive homes, that is smaller houses on smaller lots with fewer upgrades, and then subsidize the interest expense by buy-downs. Other factors are folks waiting longer to marry and then having no or fewer children, thus delaying the demand for suburban homes. The Crisis is in affordability.

If we are building too few homes, there would be a waiting list of buyers. There is not. You can always find homes to buy and builders are eager to start a home just for you. There is a demand for rentals and whole communities of rental homes are being built for those who cannot buy. Multi-family occupancies are relatively strong, running from 90% to 96% depending on location and type of apartment. Builders survive by not over-building and if there is a sudden change in the market and economy, they react extremely fast. I have seen it personally. Builders with excess inventory of houses for sale go broke. So, just building fewer houses does not make a Crisis.

*I don’t have the answers and solutions. This report is simply to help us begin to define the questions so we can start to seek solutions.*

Just For Fun, How fast can you name ten crises? I’ll start: Housing Crisis, Border Crisis, Climate Crisis … Now it’s your turn, please send me your thoughts!