Hey, builders: Don't forget the average folks
In response to this post about a call to convert downtown Baltimore office buildings into apartments, a reader offered this plea:
"What the downtown area really needs isn't just more apartments. It needs more affordable apartments where young single people can live alone in a nice place without dropping $1700 a month for a 500 sq ft studio/1br plus parking. There's really no middle ground between the high end apartments that aren't as nice as the rents would suggest and the never-renovated dumps. But that middle ground is a huge market. I know so many people who would ditch their 2 and 3 roommate row houses if more reasonable apartments were available."
It reminds me of the frustration expressed by middle-income home buyers that they can't find anything suitable in their price range.
The question I have for builders is, can you build homes or apartments aimed at people in the middle? If not, what's standing in your way?
The median household income in the Baltimore region is about $67,000, according to the Maryland Department of Planning. In Baltimore proper, it's $40,000. If you agree with the notion that 30 percent of your pre-tax income is the maximum you should be spending on housing, that's $1,675 a month for the typical household in the region and $1,000 for the typical city household.
Are you typical? What do you think of your housing choices?
Categories: Affordable housing, Renting
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Comments
In my experience Baltimore's housing choices are excellent compared to most cities on the east coast...try living in New York, Boston, or DC
Posted by: direwolfc | November 3, 2011 10:49 AM
The 30% metric (which is really 26% for standard DU guidlines) needs to be scaled based on total income. Someone who makes 10k/month has a lot more disposable income and could afford $2600/month but i think it is silly for someone making 40k/year which equates to 3333/month to spend $866 on housing. How does pay for their health plan and retirement under this scenario?....They dont.
Posted by: Anonymous | November 3, 2011 11:49 AM
My current income is greater than the median income for the Baltimore metro region (67K) however I can assure you that $1,675 a month to rent the typical household in the region is still way too expensive. And btw the typical house in this region is crap!
Posted by: Jaded | November 3, 2011 11:52 AM
Good point, Anonymous. Savings are even more important these days with job insecurity.
Posted by: Jamie Smith Hopkins | November 3, 2011 12:19 PM
Sorry Jaime-
anonymous=me
Forgot to tag it.
Posted by: elweedz | November 3, 2011 12:52 PM
Aha, I figured Anon must be someone with some mortgage experience.
Posted by: Jamie Smith Hopkins | November 3, 2011 1:16 PM
Over the last 10 years there has been an ever growing detach between homes middle income families can afford and super luxury homes or should I say luxury priced homes with middle class appeal.
The $250,000 1200 square foot Canton townhome is outside of most young professionals reach. Their only option is to move to a less desirable area. If you have been around town you know that area like Reservoir Hill, Irvington, and Lower Charles Village are not the most desirable places to live today. Could they be with a little redevelopment? Yes! However that takes time and currently there are no incentives for builders to venture into projects with risky outcomes. Furthermore, most lending institutions do not want to lend on developments without a stable infrastructure due to the state of the current housing market.
In short, Baltimore has pockets of good stable neighborhood, however this stability and desirability comes at a price. This price, in some cases separated the “haves” and the “have nots”. Very few people will come out and say this , but it is the truth.
Posted by: Baltimore Real Estate | November 3, 2011 5:56 PM
Its true, balance is hard to achieve. We find that most apartments in our area, Mt Vernon, are either 'luxury' modern large complexes -- ie: Fitzgerald - where a typical 1 bd is 1500, crappy old single family conversions with cabinets from the 80s and holes in the floor - 1bd $600. There is little mittle ground, though in renter research I find that most Mt vernon residents just want a decent size, 1 bedroom apartment, with no-thrills like doormen or gyms, but with basic modern amenities like dishwasher, washer/dryer, intercom, and no holes in the walls...Say for $1000/month for a 1 bedroom with 700 suare feet. unfortunately, you will not find too many of those....but keep looking, because they are out there!
Posted by: Affordable Apartment | November 4, 2011 3:07 AM
The issue of affordability and housing options was addressed in a recent book I read called Triumph of the City by Edward Glaeser. The thesis was that the only reason housing in coastal areas is so expensive is because of building restriction. Growth areas such as Houston, Dallas and Atlanta, however, have high housing demand, but nevertheless have very affordable real estate prices. The reason is because they have comparatively few restrictions on new housing construction. On the other hand, all of the very expensive metro areas have stringent building restrictions. You can debate whether that's good policy, but you must acknowledge that the effect is to increase land prices, and land prices - not construction costs - are what make houses expensive. Furthermore, if land is very expensive, economics dictate that you build a high-end home (or apartment building) on it.
Posted by: Rich | November 4, 2011 1:16 PM
10 years ago, almost all of Mt. Vernon was slumlord apartments, with a few nice places. It's not that developers don't build middle of the road units, it's that there was a long real estate lull were the entire stock was left to deteriorate and and now we have renovations that require relatively high rents to justify the massive rehab needed. And, of course, many developers will slap the term "luxury" on anything, when it really just means "very nice".
Posted by: Nate | November 7, 2011 11:52 AM