Tools To Fix a Broken System
Albert C. Eisenberg Remarks Before The Fairfax County Housing Authority Info-Fest August 8, 2003
"Thank you for that introduction. My father would have loved it. My mother would have believed it. I appreciate your invitation to be here this morning to share a few thoughts on housing issues. I apologize for the length of my remarks, if I had more time, I'd have made it shorter.
An old man lay dying, and in his last moments a preacher attended him. The preacher called on the old man to prepare for the next life by repenting his past sins. The old man remained silent. The preacher called on the old man again to repent his past behavior. And again the old man said nothing. This went on for awhile, and finally, the preacher, reaching the end of his patience said, "Why won't you atone for the transgressions that have marked your life?" The old man sat up, and said, "Look. It's like this. Until I know where I'm going, I don't want to aggravate anybody."
Actually, by the time I have finished, I will have probably aggravated somebody, whether I know where I'm going or not.
All of us live someplace. The issue is how we live. The 1949 Housing Act in its preamble promised a decent home and a suitable living environment for all American family, in an eloquent recognition of housing's place in U.S. law and among the most basic of human needs. It's as old as creation. It's central even to the spiritual beginning of one of the world's great religions, when a young couple with a baby on the way could not find a room at the inn and had to bed down for the night in a stable. Regardless of its form, from single room to mansion, housing represents what the American Institute of Architects calls a sanctuary for the human spirit, the quintessential shelter from all manners of storms. It is the central place in our lives, consuming the single largest share of our incomes; while symbolizing family stability and security.
And yet, housing presents us with one of society's most intractable problems. Millions of our people live in the most desperate housing conditions, and we have simply failed to provide enough housing and to ensure that what we provide people can honestly and happily call home. Along the way, housing has often been at the center of contentious, bitter disputes that can divide neighbor from neighbor and split entire communities. People just don't want those other people to live next to them. The nation had to enact a Fair Housing law to file away the roughest edges of housing discrimination, and then years later, it had to enact another Fair Housing Act.
For the last six years, we saw how a state agency, the Virginia Housing Development Authority, like no other authority in the U.S. abused its power by denying mortgage loans to among our most vulnerable, credit needy households simply because they did not fit the agency's definition of family. I fought that rule during my years on that panel, got it overturned once only to see it reinstated, and just a couple of weeks ago it was repealed again-and hopefully we have beaten the forces of discrimination for good on this issue.
So in this gathering today, we come here not because we are afraid of housing as a disruptive force, not because we believe that housing construction for our region's workers breeds social ills, not because we believe that we have too much of it. Rather we are here because we recognize that a society well housed, is one that fulfills among its most fundamental responsibilities and in the process supports the dignity and comfort of each family. We are here because we care how people live.
Our focus today is on how we house our workforce. There is a close relationship between housing supply and housing conditions and the stability of our workforce. And to that mix we must add transportation, because of its powerful influence over housing's future.
Over the last year, the housing market has been booming. On one hand that's a very good thing. Mortgage interest rates have been historically low-and so a lot of people, the Eisenberg-Davis household included, have taken advantage of the opportunity to take out equity, put on additions, move to new homes, and help fuel a housing market that has taken off. This combined with the substantial economic benefit from spending on homeland security and the military has helped many people into homes.
The region's unemployment rate has continued to be very low compared to most other places in the country, with the labor force actually increasing a fraction. In Fairfax, jobs have steadily increased and consumer confidence is up. Unemployment is around 3 percent.
An island of calm one might gather-unless you're a young family starting out on the path to homeownership; a large family of newcomers seeking an apartment with multiple bedrooms and low rents; entry level workers; service workers who staff our restaurants and hotels, along with teachers, firefighters, and other public employees, particularly those in local government. Their problems are not a new phenomenon. In 1986, when several of us got together to form the Northern Virginia Housing Coalition, we held a conference at Washington Gas, and brought out a group of business executives who one by one told the gathering that they were having trouble attracting and holding workers, particularly entry level workers.
Now, more than 13 years later, we continue to experience serious dislocations in our ability to match workers with jobs that they can reasonably get to and housing that they can reasonably afford. Let's go to the numbers. Since 1998, average monthly rents in Fairfax apartment projects have increased from $849 a month to $1,168. That's a compounded 36 percent increase. Housing assessments, which almost always lag the real market, increased by 14.6 percent to $317,240 on the average in Fairfax County. In three years, the assessments jumped 42 percent.
While rental vacancy rates are about 5.6 percent, tight, but not alarming, people of low incomes, who have secured vouchers continue to encounter a difficult rental market. Some 30 percent of vouchers are returned to Fairfax's housing authority because they can't find landlords who will take them, or the units are over the rent limits. Over 6600 eligible households are on various Fairfax waiting lists for assistance. The census showed how the county's housing market and living conditions have deteriorated for a great many people that we rely upon for a labor supply. In 2000, one out of 7 households ran out of money for basic needs. That same year, 73,000 families paid more than 30 percent of their income for housing costs. The number of people living below the poverty level increased by half from 1990 to 2000 decade, the last five years of which experienced the greatest prosperity the country has ever known.
Using 2001 data, you would have to make $18.13 cents an hour to afford a 2 bedroom apartment in the Washington, DC, area. However, if you're a licensed practical nurse, you earn only $17.30 an hour, and if you're a retail clerk, you're pretty much out of luck, earning only $8.59 an hour. And, on top of these indicators of housing distress, housing discrimination closes doors to people, just like rising housing costs, but far more insidiously because victims often don't know they're being discriminated against. In Fairfax, 13.6 percent of tests in rental properties found evidence of discrimination.
Transportation, of course, plays a major role in workforce living patterns and the ability to get to and from employment. The search for affordable shelter has forced so many families outside the beltway to places where the land is cheaper-but not necessarily where the jobs are. In Arlington we found that half our public employees live outside the county and that many of our school bus drivers were coming from West Virginia. Within the region, commute times of an hour or so, and distances of 30 to 40 miles each way are commonplace. Assuming 38 cents a mile, that's over 15 dollars a day, $1800 a year, with time out for a two-week vacation. Of course, the time spent away from family while leaving early and getting back late imposes a cost that you can't calculate.
The transportation facilities essential to carry people from home to work and back cannot keep pace with the need. The money isn't there. The state gets a certain amount of money from the federal government through the so-called highway trust fund, which also contains a sizeable amount for transit, not just roads and bridges. But the law requires a non-federal match for the projects it funds, and the state's budget woes are so dire that it is in jeopardy of losing the federal money because it can't put up the match.
Together these statistics underscore an argument for attention to a multi-layered set of problems. A community that fails adequately to house its people yet aspires to prosperity and a high quality of life will gain neither. The range of programs and policies for households of modest means are substantial. I counted 45 separate programs or revenue sources at work in Fairfax today. Funding, however, is not compared to the great need, neither for the government nor for the private sector. The Federal government's formula programs, from HOME to CDBG, from Shelter Grants to Housing for People with AIDS, along with a variety of home-grown programs such as affordable dwelling unit ordinances and locally supported housing funds, have generally proven their worth.
At the same time, policy disputes arise. For example, there is a lot of discussion about whether developers should buy their way out of affordable dwelling unit ordinances, in effect paying into a county fund instead of building the affordable units, often for reasons of cost. To the extent that height and density limits make such units more costly, it makes sense to loosen those restrictions. To the extent that the cost of providing affordable units in high-rises can entail high per unit costs, would not the money for these units be better used someplace else to preserve existing units that may otherwise be lost to the market? If the developers' payments into a housing fund are used for that purpose isn't the community's need properly met? Debates rage, compromises are found, life goes on.
Yet we still can't connect the dots. We can't we provide an adequate supply of housing at an affordable price for our workforce, AND ensure that they can live reasonably close to where they work.
And, the likelihood is that things are going to get a lot worse. A watershed study that George Mason University produced at the beginning of this year projects that housing production is seriously falling behind job growth. As of 2000 the region already had a housing deficit that amounted to 43,200 units. Looking ahead a generation, to 2025, the housing supply will fall short of need by 218,000 units. The study projects that with a growing economy hungry for housing, the median housing value in the region will rise to $415,000 by 2025 compared to $177,000 in 2000. Well, folks, the median price in Arlington is already half a million dollars today. The potential has been overtaken by new reality.
Now things get interesting. The jurisdictions in the region now face the consequences of their land use planning which have tolerated substantial amounts of sprawling development inadequately served by infrastructure that nobody can afford. And the reaction is to cut back on the allowable amount of housing development. Loudoun County, the third fastest growing county in the country, has taken tens of thousands of housing units off their land use plans recognizing that they can't afford to serve them. And the housing deficit continues to loom.
As Hardy said to Laurel, "Now, that's a fine mess you've gotten us into." But it's no joke. We are caught between several rocks and several hard places. While as Daniel Patrick Moynihan once observed that "Urban planners are forever tormented by the fact that everything is connected to everything else," having entered the door of workforce housing, we must see the issue before us as more than just a housing issue. We are buffeted by powerful, competing forces of our own creation, largely ones that we have let loose like the furies in Pandora's Box. But, remember, at the bottom of that box, what was left was hope.
I believe that we have several hard choices to make and indeed we need to make them. We need to demand new and better tools, tuned to the needs of today's service and information economy. In a world of severely limited financial resources at the local and state level, we have to challenge the notion that we should tolerate a state policy based on an abject refusal to invest in the future of our state. The tax restructuring initiative that Governor Warner has begun to articulate offers an opportunity to approach the financial side of our responsibility in new ways.
Counties should have the same taxing authorities as cities so we can broaden the tax base, generating new revenues, while reducing reliance on property taxes. Why should highly complex, urban communities like Fairfax, Arlington, and Prince William have to tolerate a cap on tobacco taxes of 2.5 cents a pack-the lowest such tax in the nation, and a lower tax rate than we pay for food, just because 350 years ago, tobacco was king. Why should we have a system so inflexible that the last time we changed the income tax was 1926, the sales tax in 1965, and the gas tax in 1986? The system we labor under dates to 1910, predating the invention of the parking meter, the chocolate chip cookie, the crossword puzzle, and scotch tape.
Beyond tax parity, localities should also have more flexibility to address priority needs, such as the authority to offer low-cost housing loans to county employees to reduce closing costs and down payments on new homes. We should raise the gas tax to begin to provide for the transportation needs that the state has seriously neglected. That Senator Marty Williams, Republican from Tidewater, has called for a 5-cent gas tax increase indicates how desperate our transportation funding has become.
As we challenge hidebound icons of a fiscal past that the information and service economy has overtaken, we must also challenge the patterns of growth and development that may have suited the landscape of the 1940's and 50's, but which are now relics. In those days, FHA encouraged housing in the suburbs to meet the needs of our returning GI's and their new families of booming babies, and the car got them to the jobs in the central city and back home again in short order. Those days are gone, as we face new realities.
If we are going to provide for the workforce of today and tomorrow, we must return to tried and true designs that have served people well for centuries. We must recreate places where housing, shops, commercial buildings, and parkland work in harmony to create communities that respected how people really live. Today, we survey that landscape and we can see how we have so undermined the concept of community by separating the basic elements of community from one another, such that in many places pedestrians are an endangered species, and to cross the road you need a car to get to the other side. The places we have created are too often places where people go to get things done, but not to live.
In short we have thrown out what works for people and embraced what works for cars. Fairfax now has less than 14 percent of its land area remaining as open space. In Arlington, our high-density development is barely three or four blocks wide and takes place on less than 7percent of the land. In that density lies serious housing policy issues. To the extent we can create real, live communities that foster a close relationship with transit facilities, and that gathers development in high density clusters, we can mitigate rising housing costs, provide employment that people don't have to drive to, and in the bargain preserve open space. In effect, we can address our workforce housing needs in part by how we design and build communities that work and provide delightful spaces that their people can enjoy. Many in established neighborhoods fear the potential for traffic and urban ills; yet they need not do so.
A survey reported in Harper's Magazine found that 12 percent of the American people believed that Joan of Arc was Noah's wife. Some people will believe anything. As we ponder the future of housing for our region's workforce, we must believe in our responsibility to provide this essential good for our people and for our communities. We cannot be dissuaded or discouraged by the policy disagreements or the lack of funding or vision that often gets in the way. Rather, we have to grasp the opportunities that we make and put them to work, for the future of this region and the quality of life for this generation and the next are at stake."