Question to both Seana Doherty (whose response is linked here) and Chris Egger: Does the achievable local housing definition take attention and possibly funding away from those who most need it?
BY CHRIS EGGER
Local funds addressing housing issues in our area are extremely limited, so prioritizing issues is crucial. Housing projects that target households above 120% of area median income (AMI) must come entirely from local funding sources; below this level, local funds can be leveraged with state and federal funds at ratios of up to 20-to-1, so a dollar toward lower-income housing goes further than those at the upper income levels that fall under achievable housing.
The achievable local housing definition was derived from a series of calculations concerning the income necessary to purchase a single-family, median-priced home while spending no more than 30% of household income on housing. The result of this calculation was that households making up to 195% of AMI were in need of housing assistance.
Housing issues in our area are numerous: substandard conditions, overcrowding, inadequate housing supply, and affordability. Needs are not all the same; consider the following hypothetical example of two four-person households in Placer County: The Smith family has a pre-tax income of $67,000 (80% of AMI), pays $1,159 in taxes, and spends 45% of their income to rent their home in the region (about $30,000 annually). The Jones family has a pre-tax income of $150,000 (180% of AMI), pays $22,287 in taxes, and spends the recommended limit of 30% of their income ($45,000 a year) on the single-family condo that they own. As the Jones family is building wealth via equity, they are also left with a residual annual income of $82,713 a year to fulfill their family’s needs. The Smith family is left with a total of $35,841 after taxes and housing costs.
The differences between these families is stark, yet both of these households qualify for assistance under the Mountain Housing Council’s achievable housing definition. Most would agree — and our norms and laws reflect as much — that if a dollar of housing support went to only one family, it should go to the Smiths. If, however, that local dollar were instead allocated to the Joneses, it wouldn’t be one less dollar for the Smiths: through leveraging of state and federal funds, there could be $5 or maybe even $10 foregone for the Smiths.
The achievable housing definition is a response to the question, “Who needs help with housing?” Yet the proper question to ask in the context of scarce housing resources is, “Who needs the most help with housing?” Failure to distinguish between these questions opens the door for directing funds away from the neediest, toward those with far lesser needs, potentially resulting in an egregious case of economic injustice.
DOHERTY’S REBUTTAL (see her initial argument here)
It is no secret that housing in California is broken. The fact is, there is not enough state subsidy funding available to tackle the need for low-income earners, as you point out. Therefore, we must try new ways of defining and solving the problem. The term achievable local housing allows us to define our needs as a community and embrace the fact that our middle-income earners also cannot afford housing in our region. This new definition aspires to solve the more comprehensive problem with a more expansive framework beyond the forced-upon traditional “affordable” vs. “market” dynamic. By thinking this way, we invite private and philanthropic partners to bring new resources to the table. Perhaps we can all agree, prioritizing public resources must be a thoughtful, community-by-community and project-by-project decision.
What’s Achievable Housing?
The Mountain Housing Council of Tahoe Truckee put forth a policy recommendation in 2018 to expand the defined range of housing needs to include households earning between 80% and 195% of Area Median Income, in addition to those with very low or low income levels up to 80% of AMI.