According to a recent Abell Foundation report, 57 percent of all renters in Baltimore spend more than 30 percent of their income on rent. This means that even Baltimoreans earning middle incomes ($40,000-$75,000 a year) are struggling to pay the rent, while the city’s poorest residents face slum living conditions and eviction rates well above the national average.
We clearly have an affordable housing crisis.
Economists claim that there is not enough housing supply because of strict government regulation. But a quick look at development in Baltimore shows that this theory is incomplete.
Construction is booming in some of Baltimore’s neighborhoods. Yet brand new city subsidized developments like Baltimore’s Harbor Point have starting rents of around $2,000 for a one-bedroom apartment. Prices are equally high in nearby Harbor East. Even the Jefferson Square at Washington Hill Apartments, located near Johns Hopkins Hospital in East Baltimore, has studio rents listed above $1,600 a month. In other neighborhoods, vacant land and housing abounds with nothing being constructed.
It’s critical we continue to build market rate housing in Baltimore. But the affordability problem is not one of under-supply and under-construction, it’s a problem of construction for whom. The private housing sector is unable or unwilling to address the housing needs of the poor and middle class. Creating affordable housing, then, demands more — not less — intervention from our public officials.
In an era of fiscal austerity and a Republican-run state and federal government, cash-strapped cities like Baltimore are increasingly limited in their ability to address this crisis without leveraging private investment. Many of these cities are therefore turning to mandatory inclusionary housing (IH) to boost production of affordable rental units. In brief, cities mandate that new developments reserve some housing for those earning low and/or middle incomes.
To offset the potential losses from renting or selling units at below market rates, developers are awarded cost offsets such as density bonuses, decreased parking requirements and express permitting. Sometimes developers can pay an “in-lieu fee” instead of building the units themselves, or they can build the affordable units off-site.
Baltimore currently has an IH policy on the books. It has been wholly ineffective. The current law mandates that developers be paid cash for all affordable units constructed or the mandate is waived; this effectively deters the construction of such units as the city does not have cash to pay for luxury construction. As of 2015, only 32 units had been built at a cost of $2.2 million.
Recognizing this flaw and the council’s previously failed attempt to fix it, City Council President Bernard C. “Jack” Young has tasked new council member John Bullock with the development of a task force to fix Baltimore’s failed IH law. This is a critical step in a comprehensive affordable housing strategy.
However, in order to re-write the ordinance to effectively produce affordable units without stifling market rate production, this task force requires a feasibility study to gauge Baltimore’s unique housing market.
If requirements are set too high, financially sustainable projects become unfeasible. As a result, less housing will be built and prices for market rate housing, which the majority of Baltimoreans depend on, will increase. If the requirements are set too low, then the city will continue to fail in delivering much-needed affordable housing to residents.
Some developers argue the housing market in Baltimore is too weak to support IH at any level. However, a recent feasibility study conducted for Pittsburgh, a city with a somewhat weaker market than Baltimore, illustrates how an ordinance, with the right incentives and construction types in place, can find this delicate balance.
Grounded Solutions, a network of highly respected affordable housing experts, has offered to conduct a similar assessment for Baltimore City at a cost of around $70,000. However, to date the city administration has shown nominal interest in paying for this study and is instead asking the nonprofit community to solicit funds from local foundations to pay for it.
Baltimore’s housing crisis is too severe and too urgent to push a feasibility study over to the nonprofit sector — their resources can be put toward other worthwhile projects. Moreover, by paying for the feasibility study, the administration will send a clear message that it believes in the virtues of shelter as a right for all its residents.
We urge the administration to fund this or a similar study ASAP. The city can afford a $70,000 feasibility study. Continued evictions and escalating rents are much too costly to wait another minute.
Michael Snidal (email@example.com) is a teaching fellow and doctoral student in urban planning at Columbia University, and president of Citizens Planning and Housing Association in Baltimore, where Gregory Friedman (firstname.lastname@example.org) is a community engagement associate.