Good enough to work in but too poor to live in?

Communities need not wait for studies to know that they benefit when housing costs more closely align with what workers can afford.

Milwaukee Journal Sentinel Editorial
Posted: Mar. 14, 2009

Another View: Mandated work force housing can end up backfiring

Economic growth - and recovery - hinges on a number of factors, but certainly one of them is connecting people with jobs. There are essentially three ways to do that: provide better transportation, provide jobs where people live and provide work force housing where there are jobs.
All three are essential, and all three need to be improved in southeastern Wisconsin. On the last item, the good news is that there are at least three efforts under way that can help with that connection: one by the Metropolitan Builders Association, one by the Waukesha County Affordable Housing Task Force and one by the Southeastern Wisconsin Regional Planning Commission.

Although these are separate efforts, they generally point in the same direction: Municipalities throughout the region need to do more to make sure they have the right housing mix to meet changing demands and trends.
And "right mix" generally will mean that some communities need to be more open to housing that workers can afford, which in turn will mean higher density, smaller lots and smaller houses. High-end housing has been all the rage in some communities because high-end housing on large lots pays a lot of bills for communities via property taxes.

But the reality is that as the population ages and changes, communities that aim only for high-end housing could end up with a lot of empty buildings in their subdivisions. Providing a balanced housing mix on the other hand can help families and business growth and still provide necessary property taxes for municipal services.

Police officers, teachers, child care providers, printers, nursing aides and other workers are needed in communities throughout the region. The problem is they and first-time home buyers can have trouble finding housing they can afford near their jobs in some communities.

There is no one-size-fits-all answer. Communities need to determine what works best for them and what kind of communities they want to be. But if they want to be part of a thriving regional economy, municipal officials need to re-evaluate their housing stock.

The builders association said in a recent press release that it will be "calling on municipalities throughout our region to embrace housing affordability to offer consumers sustainable housing options at a price that is within reach of the employment base. Land costs and the square footage of a home are the biggest obstacles to housing affordability."

The association said that the housing industry has been evaluating income and housing data county by county to determine whether the jobs that are available in the region match up to the housing supply available today. And it found that first-time buyers are not being served appropriately with work force housing options. And these options become more important once the baby boomer generation begins to retire and transition to more affordable housing.

J. Scott Mathie, vice president of government affairs for the association, said that "over the years, we've recognized that some local communities aren't evaluating employment and the housing mix appropriately. They're looking at their tax base, and they're not looking at demographics and jobs."

"We need to focus on financially sustainable housing," he added.

We agree. There are communities such as the cities of Milwaukee and Waukesha that are working on providing the right mix and are doing a pretty good job. Others, in and outside Milwaukee County, could do better.
A second effort aimed at Waukesha County could help. In December, the Waukesha County Affordable Housing Task Force and other supporting groups, including the Interfaith Conference of Greater Milwaukee and SOPHIA, launched a campaign to create a housing trust fund in that county.

The fund would be used to build low-cost homes, rehabilitate apartment buildings and improve other housing opportunities for people of modest means. The group has been making progress and will hold another meeting next month, according to Heather Dummer Combs of the Interfaith Conference.

As we argued last year, the trust is an idea worthy of widespread support and emulation. Combs pointed out last week that not only does an aging population want smaller housing, but workers who will be providing services to that aging population also need housing they can afford closer to their jobs.

According to numbers provided by the trust, an annual income of above $70,000 is required for the affordable purchase of a $200,000 starter home in Waukesha County with a 30-year loan at a 6.9% interest rate and a 5% down payment. The median annual income for a police officer in the area is roughly $55,000; for an elementary school teacher, it's $50,000; for a printer, it's just above $30,000; for a nursing aide just above $20,000; the same for a child care provider. Clearly, such people need housing they can get into that's under $200,000.

The third effort is more long term but is still essential. SEWRPC has begun its first study of regional housing needs since 1975. It will take time for the commission to complete its work - and it's important that, as Combs argued last week, others not sit on their hands in the meantime - but moving forward on the study is critical to the region.

The bottom line from all this is that change is coming in housing demands, and every municipality needs to start working now to make sure it is ready to meet those changes and ready to help workers connect to jobs by providing the right mix of housing throughout the region.