Bulletin #15
November 30, 2005
It appears that our last Bulletin resonated more than some of the earlier ones, having received many favorable responses. Sounds as if we have buried our audience in statistics for too long, and people really wanted to hear more about the human and cultural side of affordable housing at least as much or more than dismal demographics.
After the comments on culture and diversity, I have also added another paragraph discussing one of the most common retorts of people whom we meet that really do not want to deal with the problem and therefore resort to the “free private markets” argument. Unfortunately, the dreaded statistics have to come back into this discussion
From those who have passed our promotional tables at various county events and gatherings, we hear two areas of concern, taxes and neighborhood change. First, the concern about the loss of tax base from affordable housing is a no-brainer for our advocates, since we can respond that affordable housing is sold to private homeowners, and they pay taxes the same as any other purchaser of a home in the county.
The other concern is that people are uncomfortable with tracts of housing bordering or near their property which may be owned by less affluent strangers and somehow change both the values and culture of their neighborhoods. In shorthand, this is a NIMBY issue. This is a concern that cannot be refuted by statistics, but I would like to offer a personal observation.
Pat and I moved to Olga in 2000 and purchased a ten acre former orchard in a neighborhood of moderate incomes, organic farms, and a culture of self-sufficiency. Through dumb luck rather than any personal brilliance on my part, I ended my career with enough money to retire from the dot-com craze. My neighbors were immediately suspicious, with the general attitude of “here comes another urban yuppie to tell us how to run things.” It has taken us these five years to become accepted into their culture. However, the rewards of final acceptance for Pat and me have been immense. From a city culture where most, including neighbors, could care less about you, we have found ourselves in a neighborhood with:
My
point is that a neighborhood of more modest means is an advantage in terms of
diverse culture and being surrounded by a real community in every sense of the
word. My land and housing values have appreciated at the same rate or
greater than any other community on the island. My greatest fear is than
many in our community will be tempted by the higher prices and move out or back
to the mainland, and we will loose this wonderful diversity.
I grew up in a conservative business environment and frequently hear from my peers that we can safely ignore the affordable housing issue and that “it will solve itself.” The logic here is that, as island property and housing continues to rise in value and the increasingly wealthy purchase it, they will demand services and be willing to pay the private market cost for such services. Up to a point that is true, and has resulted in the wealthy and only the wealthy paying private market costs for living in such isolated communities as Nantucket, Martha’s Vineyard, and Block Island. However, the “solution” of reliance completely on private markets is invariably the destruction of local culture.
In Nantucket, this means that workers are flown in and out each day. If one has a plumbing problem, you arrange for a plumber to be on the same aircraft. School teachers manage to survive by doing the “Nantucket shuffle,” house sitting vacant homes and leaving the island over the summer. In Martha’s Vineyard, virtually all retail workers arrive by ferry, the shops selling tee shirts open to sell to tourists arriving on the same ferry, they close before the last ferry, and everyone goes home. The few residents retire into gated communities, go to the country club with the same other residents, and discuss their stock portfolios. One would be hard pressed to call these places “communities”.
Several have suggested that they would be perfectly willing to pay the going rate for infrastructure workers to afford housing on the island at private market prices. They make this assertion, that is, until we lay out the consequences for them. At a median price of $475,000 (up 33.8% since this time last year) an infrastructure worker would need a family income of $107,000 per year to afford the mortgage on a median priced house. This is, of course, assuming that they have $95,000 in equity for the 20% down payment. Given a 2000 hour work year, this means that their hourly wage must be $53.50 per hour. Many of our infrastructure wage scales are determined either by the state (public school teachers) or the county (public works, county employees, etc. Since the majority of the county’s cost of operation is wage related, providing a county employee with sufficient income to purchase a median-priced home would require an almost doubling of the county tax base. In the private sector, most service providers such as contractors, plumbers, electricians have to pay both the costs associated with their business, (such as office, equipment, storage, and insurance) and also for “down time” (such as traveling from site to site, billing, paperwork, and other non-chargeable time). As rule of thumb, these expenses result in their having to charge about 3 times their real take home pay in hourly charges, or about $160 per hour.
Even those with significant wealth tend to be less enthusiastic about paying “the going rate” when adding up these numbers. And naturally, for those without this level of wealth, such charges are prohibitive and will accelerate the decision by the less than wealthy to leave the county.
Signed,
Steve Garrison
As always, our most recent publications are posted at our website http://orcasresearch.org/ and now also at http://SanJuanHousingBank.org/. You can contact us at any time at Losleben@rockisland.com.
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