Thirty percent. That’s the traditional metric of housing affordability, which holds that housing should cost no more than 30% of a family’s income. By that measure, about 55% of U.S. neighborhoods would be considered “affordable” for the average household.
When you factor in the cost of transportation, however, the percentage of neighborhoods that the typical family can afford falls to 26%, according to the Center for Neighborhood Technology, a nonprofit research group based in Chicago. Transportation is most household’s second-biggest expense, after housing.
The conundrum is that many lower-income families and individuals can’t afford to live in the more desirable areas served by good public transit. They are forced to choose neighborhoods whose housing they can afford, but which have limited transit service, or none at all. As a result, their housing costs may be 30% or less of total income, but the high cost of commuting to work makes their daily living costs unaffordable.
Transit-oriented developments help address this problem. TODs place housing at or near rail and bus service nodes and routes. This can, in many cases, enable lower-income residents to reduce the cost of their commute to work, making their total housing and transportation budget fall more in line with the traditional affordability metric.
Enterprise Community Loan Fund, an affiliate of the nonprofit Enterprise Community Partners, recently closed three deals that will create 462 renovated or newly constructed apartments in neighborhoods served by Denver’s transit system:
- Crosswinds at Arista, a $1.8 million loan to acquire vacant land in Broomfield, with rapid bus routes to Denver and Boulder. Sponsoring developer Gorman & Company plans to develop 159 one-, two-, and three-bedroom affordable apartments.
- Bonsai Apartments, a $2 million loan to acquire a nursery in Sheridan, 10 miles south of Denver, where Medici Development will build 149 new affordable apartments.
- Johnson & Wales Family Housing, a $5 million loan to acquire two student housing buildings on the former Johnson & Wales University campus. Archway Community Investment plans to turn the dorms into 154 affordable rental units. Buses with frequent rush-hour headways go right to downtown Denver.
The deals were financed through the Denver Regional Transit-Oriented Development Fund. Since 2010, the fund, a partnership among state and local housing agencies, banks, philanthropic institutions, and community development financial institutions (like Enterprise Community Loan Fund), has invested $50 million to renovate or build more than 2,000 affordable homes in the seven-county metro area. (All properties must meet Enterprise Green Communities criteria for the affordable housing sector. ) As loans are repaid, the capital goes toward new acquisitions to increase the supply of affordable homes near transit.
Seems like a pretty good model for other metro areas to adopt, don’t you think?
Related Stories
Multifamily Housing | Oct 15, 2015
Montreal apartment is world’s largest residential cross-laminated timber project
Its 434 condo, townhouse, and rental units in three eight-story buildings are made from sustainably harvested wood turned into panels by Canadian company Nordic Wood Structures together with the Cree Nation in Chibougamau.
Sponsored | Multifamily Housing | Oct 15, 2015
Apartment takes progressive turn in architecturally traditional D.C.
The new Lyric 440K Apartments is a 14-story structure housing 234 one- and two-bedroom units in the heart of D.C.'s up-and-coming Mount Vernon Triangle
Multifamily Housing | Oct 12, 2015
Freddie Mac: Multifamily demand should outpace supply through 2016
Vacancy rates and rent growth are “converging” in most markets.
Multifamily Housing | Oct 7, 2015
BIG designs lush, terraced mixed-use building in Sweden
Cascading glass and wooden cubes create a form similar to Northern Ireland’s Giant’s Causeway rock formation.
Multifamily Housing | Oct 6, 2015
Multifamily completions in buildings with 50 or more units continues to climb
The Census Bureau estimates that 255,600 multifamily housing units were completed in 2014 in buildings with at least five or more units, representing a 37.3% increase over the previous year and the highest total in those multi-unit structures since 2009.
Multifamily Housing | Oct 2, 2015
Utilities should do more to give building owners energy use information
Owners of multi-tenant buildings lack basic information.
Multifamily Housing | Oct 1, 2015
Wiel Arets unveils twin, 558-foot mixed-use towers in Bahrain’s capital
The development, Bahrain Bay Tower, will consist of two residential towers connected “by a plinth of retail, office, parking, and public park space.”
Multifamily Housing | Sep 29, 2015
The developer that planned a mosque near Ground Zero now proposes a five-star condo tower instead
Sharif El-Gamal of Soho Properties is looking to cash in while lower Manhattan’s real estate market stays hot.
Multifamily Housing | Sep 28, 2015
Vo Trong Nghia’s 'diamond lotus' will feature sky garden pathways linking high-rises
The 22-story housing complex in Ho Chi Minh City will have façades covered with plants and a rooftop garden that connects the structures.
Multifamily Housing | Sep 23, 2015
Richard Meier unveils design scheme for residential high-rise in Taipei
The sleek and minimalist luxury tower will offer guests and residents views of the iconic Taipei 101.