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Tim Roper
Council Member
Asked a question 9 months ago

My city is working on creating a downtown in our city. We had a mobile home park of all things on our main corridor where a downtown would go. We have lined up an amazing and developer with a killer track record of helping other cities redevelop. One thing they want to do is use Low Income Housing Tax credits (LIHTC) to build the housing component at 80% low income and 20% market rate with an AMI of about $51k for a family of four. It has raised concerns on our city council of how big the ratio is. I feel this is a great tool to allow the developer build a unique product with extra amenities to give it a draw people to it in our community. Does any one have experience with this?

Where am I?

In Strong Towns you can ask and answer questions and share your experience with others!

Where do you live? Do you have a huge housing crisis? Personally I think that sounds like a lot of low income. Not that I lean NIMBY, but we need to stop lumping lower income and poor people together and help them live distributed across a healthy, diverse community. 50/50 or 40/60 would be more desirable IMO.

In Happy City there is mention of Vancouver CAN allowing builders to add several floors in downtown hi-rises if 20% were below market.  That’s probably too low to meet the need, but also doesn’t segregate them.

Concern is too many market rate or "affordable" units? Other funding sources? Tax incentives?

Has anyone performed a housing survey or market feasibility study? I think it's helpful to go back to basic supply/demand economics to begin searching for answers (relative to the mix of low income/market rate housing). Often, we tend to focus on the "free money" (tax incentives/credits or, in some cases, grants) first, and that frequently results in an outcome that is not market-driven; the market must then adapt to the strategy instead of the other way around. Not much good results from that.

Asked another way: what is the demand for low-income housing in your market area? And what is the demand for market rate housing? Too much low income housing will chase out prosperity, in my view, when what is really needed in depressed areas is to attract wealth and prosperity. I am making the assumption you want your community to meet the needs of people at all socio-economic levels. Determining the ideal mix--that's difficult. Markets tend to do that for themselves through supply and demand, but when government incentives are present that can skew the answers. 

To summarize, I would suggest 1) identifying what the ideal outcome looks like--i.e. what are you trying to create? 2) Why-for what purpose? and 3) using research methods to test the market and determine if your vision for the community is shared by community members.

I am no expert--my answers are based on my experience in government, community-building and residential construction/real estate development. I hope this is helpful. 

 

Andrew Clum
Assoc. AIA, Urban3 Analyst

Is there a map of this? My concern is that "creating a downtown" nowadays often means up-zoning a fringe area that is not at all in a central location. This leads me to ask, is there "a mobile home park... where a downtown would go" or is there a ' "downtown" going on top of a mobile home park?'