Category Archives: Laws & Public Policy
For years, research has shown that smart growth development can reduce costs for localities and in some cases can even increase public revenue. Over the last 10 to 15 years, research about smart growth development strategies has continued to develop. However, one question in particular still remained: What impact does smart growth development strategies have on municipalities’ bottom lines? An organization called Smart Growth America sought to answer that very question.
Smart Growth America published a report entitled Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development. This report examined 17 case studies of municipalities across the country. Localities in this study included Afton, MN; Champaign, IL; Charlotte, NC; Fresno, CA and Phoenix, AZ just to name a few. Specifically, the report compared municipal revenues in two types of development scenarios: smart growth and conventional suburban. Smart growth development is characterized by buildings located closer to each other, neighborhoods that allow ample walking for residents, streets with better connections among destinations, a greater mix of home types and increased transportation options. On the other hand, buildings farther away from each other, neighborhoods designed primarily for driving, street systems with longer distances between destinations and fewer public transportation options are characteristics of conventional suburban development. The report by Smart Growth America focused on three financial aspects of these two strategies: the cost of upfront infrastructure, the cost of providing ongoing services, and the tax base created by additional development.
So, what did this comparison study show? First, smart growth development costs about one-third less for upfront infrastructure than conventional suburban development. Some type of infrastructure is of course required to support and supply any development. Often, the most expensive forms of infrastructure in new developments include roadways, water lines and sewer lines. The less expensive costs for upfront infrastructure in smart growth development scenarios can be attributed to the fact that smart growth development typically requires fewer infrastructures. This means that upfront capital costs, maintenance costs, and presumably costs for eventual replacements are lowered. Additionally, smart growth development scenarios often reuse existing infrastructure, which serves to further lower upfront capital costs.
Secondly, the comparison study showed that smart growth development saves municipalities an average of roughly 10 percent on ongoing delivery of services. Examples of ongoing delivery of services include the cost of services provided by first responders in emergencies such as police, fire and ambulance. The way a community is configured has a profound impact on delivery of public services. Because smart growth development utilizes street systems with better connections among destinations, service vehicles may drive fewer miles, thus allowing a reduction in operating costs. Further, research showed that the savings on services in rural areas were even higher.
Finally, the survey concluded that smart growth development produces 10 times more tax revenue per acre than conventional suburban development. Tax revenue typically refers to property and sales taxes, as well as licensing fees and other small sources of revenue in some instances. This finding is particularly significant because for most communities property taxes are an extremely important source of revenue. In fact, a 2010 U.S. Census survey of local government budgets nationwide showed that 48 percent of revenue from municipalities’ own sources came from property taxes.
The findings of Smart Growth America are significant for multiple reasons. The primary reason is because it shows that smart growth strategies create significant revenue for local governments and significant savings for residents! These findings are particularly relevant to local governments given our anemic recovery. Areas that experienced or are experiencing a lot of sprawled “McMansions” development are burdened with high land use and development costs. Localities across the country have seen that low-density developments fail to pay for their own infrastructure. Transportation costs for families have ballooned, in some cases to more than a quarter of their income. There is a significant correlation between lack of transportation and access to higher paying jobs. By making the decision to utilize smart growth development strategies, local governments may find that that their public balance sheets AND quality of life for residents can be improved for decades to come.
 Smart Growth America, Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development, available at http://www.smartgrowthamerica.org/documents/building-better-budgets.pdf
 U.S. Census Bureau (2012, September), State and Local Government Finances Summary: 2010, available at http://www2.census.gov/govs/estimate/summary_report.pdf.
 Shaila Dewan, Is Suburban Sprawl on Its Way Back?, Sept. 14, 2013, available at http://www.nytimes.com/2013/09/15/sunday-review/is-suburban-sprawl-on-its-way-back.html?_r=0.
Housing is a cornerstone for our families and our communities in Virginia. For 30 years, the Virginia Housing Coalition has advocated that every family and every individual in the Commonwealth should have an affordable and decent place to call home. As we emerge from the worst housing recession in our nation’s history, there are many reasons to focus on the housing status of our citizens here in Virginia.
- More than a million Virginia households are housing cost burdened – meaning, they pay more for housing than they can afford.
- Over 100,000 families lost their homes to foreclosure and this epidemic is still affecting our people and our neighborhoods. Many areas of the state still lag behind our stronger markets.
- The homeownership rate in the state and the nation are continuing to decline. We need to make sure that rental housing is available to meet this growing demand, but we also need to rebuild the opportunity for young families to buy a home and begin to build equity. Homeownership has long been the principle way that lower and middle class households increase wealth.
- The cost of rental housing has outpaced the growth of renter incomes over the past decade. In 2013, it would take a wage of $20.72 per hour to afford Virginia’s 2BR Fair Market Rent ($1,078), but the average renter wage in Virginia is only $15.79.
- Finally, while we have begun to make progress in reducing homelessness, this progress is threatened by cuts to federal rental assistance funding.
Good housing policy does more than just provide adequate shelter to Virginians. Housing is an important element of our state’s economy. Housing construction generates jobs and economic spinoff benefits the surrounding community. For example, the construction of 100 single family homes in Fairfax County supports 222 short term jobs and 20 long term jobs, bringing the total economic impact to over $16.5 million. Usually, housing leads us out of a recession. That has not been the case with the Great Recession. Our homebuilding industry has been in a depression for the past five years and that needs to change in order for economic growth to accelerate in our state.
Housing is integrally connected to many of the important issues that you will face as Governor. Housing density, location and development patterns fuel our transportation needs and expenditures. Good, stable housing correlates with improved educational achievement in young children, as well as providing mental and physical health benefits, especially to our older citizens.
As Governor, we urge you to place a priority on the development of a detailed housing policy and plan in the first year of your term. We also ask you to commit to continue funding for the Virginia Housing Trust Fund – an effort that has already begun to yield benefits to families across the state. The first round of Housing Trust Fund projects will be getting underway by the end of the year and will serve a broad range of housing needs in the state, including veterans, persons with disabilities and individuals experiencing homelessness.
On behalf of our membership across the state, we look forward to working with you to expand and improve housing opportunities for all Virginians in the next four years.
Bob Newman, President
As any homebuyer or renter knows, purchasing a new place to live is a multi-step process. But a lesser known truth about this common practice was recently released in a study from the U.S. Department of Housing and Urban Development. The HUD study findings confirm that you, as a consumer, can fall victim to racial housing discrimination at any point during the browsing and purchasing or renting of a new home, from the first phone call to the sale itself. HUD’s release from more than 8,000 fair housing tests conducted across the country indicates that although blatant discrimination in the advertising and sale of homes may be on the decline, more subtle forms persist with equal consequences to the housing consumer.
Searching For a Home
Before the first showing, homebuyers peruse the availability of homes in their preferred area. Throughout the country, testers found that when contacting agents about advertised residences for sale, black homebuyers learned about roughly 17.0 percent fewer housing availabilities than their white counterparts, and were “shown 17.7 percent fewer homes.”
The First Call: Scheduling an Appointment & Pre-Qualification Process
The 2013 HUD study showed significant disparities in the initial contact between buyer and REALTOR along racial lines, even when it came to sensing racial background over the phone. According to HUD, black “renters whose race is readily identifiable based on name and speech are significantly more likely to be denied an appointment than minorities perceived to be white.” During an in-person visit, renters who are identifiably black “are shown fewer units than minorities who are perceived to be white”. Similarly, homebuyers who are identifiably black…“face higher discrimination during the in-person visit than those who are perceived to be white.”
Significant numbers of testers in certain metro areas (including the Richmond, VA region) were repeatedly denied appointments by housing providers because they had not yet been prequalified. The report cites a case where the black tester called and spoke with an agent who insisted that she must be prequalified in order to see homes. He refused to meet with her until she had talked to a lender. The white tester was not asked about prequalification over the phone, and made an appointment to meet with the agent.
For example, field testers in certain metropolitan areas were so consistently denied appointments based on lack of pre-qualifications that HUD had to grant testing organizations permission to use qualifying dollar amounts over the phone just to schedule a first meeting. These nine localities included
Albuquerque, N.M.; Atlanta, Ga.; Chicago, Ill.; Dallas, Texas; Fort Worth, Texas; Greensboro, N.C.; Miami, Fla.; Washington, D.C. and our own Richmond, Va.
The First Meeting & Showing the House
A significant racial divide was also found when testers first met with real estate agents and were shown houses. In terms of variety of neighborhoods shown, national trends indicate that more homes and apartments are communicated and shown to white homeseekers than to racial minorities. HUD reports that
“agents spend more time with white homeseekers than with equally qualified blacks” and that “in about two-thirds of in-person visits, one tester is shown more units than his or her partner, with whites significantly more likely to be favored than blacks.”
Even an agent’s description of a neighborhood can be tinged with discriminatory language. The report states that:
“whites hear more positive comments about white neighborhoods and more negative comments about minority neighborhoods than do blacks, potentially steering them away from mixed or minority neighborhoods.”
Minority home buyers sometimes experience other forms of discriminatory treatment as well, relating to housing costs and financing, housing quality, and the helpfulness of the sales agent. These differences are less consistent and smaller in magnitude than the differences in numbers of homes available and shown.
But one particularly potent finding from the 2013 study may be the most unsettling – these disturbing trends only amplify when particular cities and towns (localities) are put under the magnifying glass, particularly urban areas.
The unfortunate truth is that even after sale, discrimination can occur during a buyer or renter’s time at their residence, and on bases of a variety of different “protected classes” other than race. The study itself cites the limitation that:
“results reported here probably understate the total level of discrimination that occurs in the marketplace… (and) do not capture all the forms of discriminatory treatment that minority home seekers may experience.”
HUD even indicates that the extent of housing discrimination faced by “minority home seekers with lower incomes, less wealth, weaker English language fluency, or blemished credit” may extend to levels beyond those actually reported this year.
We need to do more. To stop these disparities, it is paramount that buyers, renters and housing industry professionals are educated in fair housing practices.
Enforcement is still a necessity, as HUD states:
“Prejudice has by no means disappeared….minorities still face significant barriers to [their] housing search, even when they are well-qualified as renters or home buyers.”
A strong method to enforce fair housing laws is to have local fair housing organizations increase their proactive testing of the housing industry (the sales market more so than rentals). Another proactive step is to research what specific localities and neighborhoods are experiencing these discriminatory housing practices, in order to pinpoint areas where investigations could really make a difference. Reinvesting in neighborhoods to create equal access to services and encourage diversity is another long-term method to reduce these detrimental disparities facing minority home seekers, renters and owners. It is for these reasons that fair housing organizations like HOME fight for equal opportunity to housing for all, through fair housing policy change, education and enforcement.
As poverty increases, affordable housing, access to public transportation, and linkages between housing, transportation, and job centers become more important for RVA region.
The recent New York Times story about suburban poverty is getting a lot of attention. The story notes the shifting growth of poverty from the urban core of New York to its suburban peripheries, but it’s based around Confronting Suburban Poverty in America, a book released today by Elizabeth Kneebone and Alan Berube at the Brookings Institution. Admittedly, I haven’t read the book yet (yet!), but this trend came up in some data I was looking at recently. In Virginia, Richmond and its immediate counties – Chesterfield and Henrico – are good examples of this trend in action.
The shift of poverty growth from the city to the suburbs is a trend we can see pretty clearly in the numbers. A look at data comparing poverty in the City of Richmond and the counties of Chesterfield and Henrico, shows trends that aren’t far off from those outlined in the Times article.
The City of Richmond gets attention throughout the region for its poverty rate, which was 26.4 according to 2011 estimates. The city’s mayor, Dwight Jones, made the development of an antipoverty strategy one of the first priorities of his second term. But the bulk of the region’s poverty growth – numbers of people rather than rates – is happening in the suburbs.
From 1989 to 2011, which is as far back as the Census Bureau’s Small Area Income and Poverty Estimates go, the City of Richmond’s population in poverty has grown by about 14%, or about 6,200 people. In terms of poverty rate, that’s a 3.4 point increase, from 23.0 to 26.4. In the same time period, Henrico has seen its population below poverty grow by 163% (20,500 individuals), and Chesterfield by 181% (14,500 individuals).
Suburban poverty rates remain lower the city’s 26.4, but poverty growth in the counties has outpaced total population growth. Point increases in the poverty rate of a suburban county – where the total population has been growing rapidly for decades – represent more people than point increases in the rate of the city – where the total population only recently reversed its shrinking numbers. Henrico’s poverty rate increased 5.0 points between 1989 and 2011 (5.8 to 10.8). Chesterfield’s increased 3.4 points (3.8 to 7.2). As noted above, Richmond also had a 3.4 point increase over those 22 years. But Chesterfield’s 3.4 point increase represents 14,500 individuals, more than double Richmond’s 3.4 point increase of 6,200 individuals.
The chart below shows pretty clearly just how significant those changes have been:
The growth of poverty in jurisdictions throughout the region is cause for concern, and the trend of more rapid suburban growth is important. As the suburban population of individuals below poverty increases, Richmond’s share of the region’s poverty drops. In 1989, the city’s share of poverty among the three jurisdictions was 68.5%. Today, it’s 47.9% (see the chart below). There are more people in poverty in the immediate suburbs of Richmond than there are in the city.
The shifting geography of poverty away from the region’s urban core has important implications for policy decisions at the local and regional levels. While there is still need for the antipoverty resources and strategies traditionally concentrated in the city, the counties are facing a growing problem. The more widely distributed suburban residential patterns may make addressing those needs more costly.
Urban poverty in the Richmond region isn’t shrinking, but that’s not for lack of attention or effort. Suburban poverty in Richmond has surpassed urban poverty in total numbers, presenting new challenges to the counties. As the population of suburban poor continues to expand, antipoverty resources and infrastructure – affordable housing, access to public transportation, and linkages between housing, transportation, and job centers – will only increase in importance across the region.
This is a guest post by Mike MacKenzie. Mike is a Housing Research Analyst at HOME. He joined the staff in January 2013 after spending 2012 helping HOME study how local governments identify and address fair housing needs. The former journalist and radio producer is passionate about sharing information and analysis that promotes transparency, informed decision-making, and accountability. Mike specializes in fair housing planning, the spatial impacts of local policy decisions, and the federal regulations that guide local and state governments. He received his Master of Urban and Regional Planning at Virginia Commonwealth University in 2011.
A Fair Chance in the Economy is Humanly Possible
George Mason University Economics Professor Don Boudreaux wrote recently: “I do not in the least care about income (or wealth) inequality.”
This seems a pretty bold and heartless statement, but he clarifies:
“I care – very deeply – whether the process for pursuing one’s life’s goals is fair or not. I want everyone to have as fair a chance in the economy as is humanly possible. I despise special privileges that stack the deck either in favor of Jones or against Smith. (We can have a debate about what the details of “fair process” and “special privileges” look like, but this post is not the place for such a debate.) But I do not care about differences in monetary income or wealth as such.”
Every American is entitled to a fair chance to succeed in our economy. But here’s an incontrovertible fact: human bias and prejudice actively prevent some Americans at a fair shot.
What am I talking about? I’m talking about housing discrimination.
Zenobia of Petersburg Virginia wanted to move her family to a better neighborhood so her four children could attend better schools and build a better life for themselves. Unfortunately, she was turned down for housing repeatedly because she uses public assistance to pay for rent. This type of housing discrimination reduced the fair shot Zenobia is entitled to.
A recent study found that many low income Americans are trapped in areas with fewer opportunities:
One of the most disappointing results of the study, Tegler says, is that the majority of recipients of the Housing Choice Voucher Program still live near low-performing schools, even though the program is designed to provide greater housing options.
It is humanly possible to give these folks a fair chance in our economy. We have to eliminate discrimination against people using public assistance for housing. When people are able to choose great neighborhoods themselves, they will have the fair shot they are entitled to in our economy. We must also make sure that there is affordable housing in great neighborhoods.
Virginia is getting more money from a national settlement stemming from the foreclosure crisis. The Virginia General Assembly will be getting $3.5 million from a settlement over “robo-signing” and “surrogate signing” of mortgage loan default servicing (aka foreclosures). This money is supposed to be used for housing, but the Virginia General Assembly now gets to decide where and how to spend this money.
Robo-signing was a significant problem in Virginia that raised serious questions about the sanctity of property rights in the Commonwealth. It was such a serious concern, that a community group in Northern Virginia organized citizen volunteers to investigate this problem in Prince William County.