Economics in Real Life: Affordable Housing Laws

Periodically I come across things that I think are good examples of why studying econ is useful. Time for a pop quiz. Explain what is wrong with this assertion (the entire email is below, if you need more information on what the law actually says):

 

What does the Law say?

Known as Chapter 40B the law says that all communities must have a minimum of 10% affordable housing and streamlines the permit process for construction as a way to eliminate exclusionary zoning processes and prevent individuals from being priced out of their communities. [MY NOTE: In practice, this means that 10% of the rooms in every building is reserved for "affordable housing"].

 

 

What happens if this [mandated affordable housing] law goes away?

12,000 affordable homes will never be built. This will cause the state to [lose] jobs and individuals across the state to not have access to adequate housing. Essentially NO affordable housing will be built outside of the major cities and Habitat for Humanity will not be able to adequately operate in MA. 

 

 

 

Graham this is not an optional response for you.

 

(answer below- scroll down)

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My response looked something like this:

 

"Setting aside whether affordable housing laws do good things (there are legit arguments on both sides - I tend to think they're an inefficient solution to poverty and should be replaced with more impactful poverty policies, but I see the argument for them)... how does a mandate that developers make 10% of their units unprofitable drive away jobs? Eliminating affordable housing laws, thus making units more profitable, actually would create construction jobs because projects that couldn't be viable now would become viable..."

 

[I'm also very interested in hearing why Habitat for Humanity would be forced to cease operation... is it a land issue?]

 

 

On Thu, Oct 7, 2010 at 2:29 PM, ****** <*****@****.*****.*****> wrote [on a "democrats-talk" email list]:

Did you know affordable housing in Massachusetts is under attack? Question 2 on the November 2nd ballot seeks to eliminate MA's primary affordable housing law

What does the Law say?

Known as Chapter 40B the law says that all communities must have a minimum of 10% affordable housing and streamlines the permit process for construction as a way to eliminate exclusionary zoning processes and prevent individuals from being priced out of their communities 

Has the law been successful? 

Yes. the law has created 58,000 affordable homes for seniors and working families. The law has helped 51 cities in towns get to 10% and incentivized another 150 to come up with a plan to reach that goal. 

What happens if this law goes away?

12,000 affordable homes will never be built. This will cause the state to loose jobs and individuals across the state to not have access to adequate housing. Essentially NO affordable housing will be built outside of the major cities and Habitat for Humanity will not be able to adequately operate in MA.

Why should you care?

A study from Northeastern shows that the cost of housing for recent graduates will skyrocket if the affordable housing law is removed. MA is an expensive place to live and under the law a single individual making up to $44K a year qualifies for affordable housing. 

The law has also been used to help seniors who do not have pensions remain in their communities and is  part of the "housing first" solution to homelessness. Furthermore it provides stability to families and entire communities in a time where the economy can put someone at risk of losing their home. 

Who is protecting affordable housing and Voting NO on 2?

Over 1,500 individuals and organizations including all 4 candidates for MA governor, the League of Women Voters, Habitat for Humanity, the YWCA, City of Cambridge, and Catholic Archdiocese.  

Who came up with the idea for question 2?

An organization known as the Slow Growth Initiative, funded by the New England Coalition for Sustainable Population that advocates for population control (We literally can't make this up)

How you can help? 

Please e-mail **** or ****** for more information or if you have questions. 

Whether you have 5 minutes or 5 hours, any time you can give protects our seniors and working families. 

Thanks and we look forward to working with you.