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December 1, 2018Harmony Communities President Matt Davies believes that everyone deserves a safe and affordable place to call home.
In California, the need for affordable housing options is staggering. According to one study from the California Department of Housing and Community Development, in a population of families making 50 percent or less of an area’s median income, there is a need for 1.5 million housing units. And in every major metropolitan area and its surrounding counties, between 30 and 60 percent of residents cannot afford market rent.
“Someone making minimum wage,” Davies explains, “would have to work over 90 hours a week to afford an average one-bedroom apartment in Los Angeles County.”
In a recent interview, Davies explained the landscape of affordable housing needs in the State, as well as the solutions Harmony Communities is working to implement.
Who needs affordable housing?
So many people are in need of affordable housing. Underpaid public servants like teachers, police and firefighters often need affordable housing close to where they work.People who work in the service industry, like daycare providers, baristas, custodians,restaurant workers, and people in retail jobs all need affordable housing close to large cities.
In California, we have a large number of immigrants who work multiple jobs and use cash for many transactions, which can make a traditional home purchase a challenge.Finally, the elderly are a huge subset of the population that desperately need affordable housing because they have fixed incomes with no room for uncertainty around housing costs.
What solutions are available for the lack of affordable housing?
Rent control is often touted as the best solution, but it’s a double-edged sword. For someone who can get into a unit with rent control, it’s great. But from the perspective of an owner, landlord, or future resident, it’s a problem. Rent control in manufactured housing communities is inherently flawed. When rents are kept below market the subsidized rent is captured by the first resident through inflated housing resale prices.
While the first resident in the door wins, all future residents are losers. For proof, look no further than Malibu, home of million dollar manufactured housing. These homes have an actual value of $50,000 in a non-rent controlled market but sell at the exorbitant premium because the purchase price includes discounted rent. What do you think is more attainable for the population at large, $500 monthly rents and a million dollar home or $2,500 rents and a $50,000 home? The fact is that rent control doesn’t control the overall cost equation, it merely shifts from rents to home value. Hardworking prospective residents without significant savings are now locked out of this important affordable housing market.
Manufactured housing communities single-handedly help the State meet the need for affordable housing. California used to build 200,000 new houses a year. Now, that number is down to 80,000. All the while, more people come into the State and scramble to find a place to live. So the solution, besides building more housing? Thoughtfully planned manufactured housing is essential. Mobile home parks are one of the largest forms of unsubsidized affordable housing in the State.
What are the challenges of maintaining high quality, affordable neighborhoods in a market like California's?
As we delved deeper into some of the eligible neighborhoods that were originally built in the 1950s and 60s, our team was struck by the lack of infrastructure. We’re appalled that in a prosperous nation like the United States, some places still lack dependable running water, updated electric service, and functional sewer systems. It’s heartbreaking to go into these communities of hardworking, decent people and find they do not have these basics.
One reason why these services have not been updated is because it’s expensive.
Manufactured housing communities, in some areas, are apart from the city water and sewer system. It’s a self-funded, self-managed service. When we see that, we know that improving basic services has to be a top priority. Obviously, that kind of work requires a significant investment of funds.
Keeping monthly expenses attainable, especially for the elderly, is part of our mission. In most any community we take over where it looks like this population would be negatively affected, we offer a rent subsidy program out of our own pockets. It’s means-tested, subsidized rent for up to 10% of the community. There will always be some trade-off in order to create effective positive structural change. But overall, our goal remains the same: to offer great value in a great environment for all residents.
How do high quality, affordable homes improve the community as a whole?
When we create purposeful communities around high quality, affordable homes, we step in with the intention of establishing an atmosphere of care and respect for property, and by extension,individual personhood. We aim for Harmony Communities to be clean and neat, to have local ownership and governance through homeowner’s associations, and to make obvious to any onlooker that we care about our community, that people are watching, and that crime is not welcome. I think that this attitude – that people know each other and know about the neighborhood – helps increase safety and affects the greater good.
At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods,and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.
In California, the need for affordable housing options is staggering. According to one study from the California Department of Housing and Community Development, in a population of families making 50 percent or less of an area’s median income, there is a need for 1.5 million housing units. And in every major metropolitan area and its surrounding counties, between 30 and 60 percent of residents cannot afford market rent.
“Someone making minimum wage,” Davies explains, “would have to work over 90 hours a week to afford an average one-bedroom apartment in Los Angeles County.”
In a recent interview, Davies explained the landscape of affordable housing needs in the State, as well as the solutions Harmony Communities is working to implement.
Who needs affordable housing?
So many people are in need of affordable housing. Underpaid public servants like teachers, police and firefighters often need affordable housing close to where they work.People who work in the service industry, like daycare providers, baristas, custodians,restaurant workers, and people in retail jobs all need affordable housing close to large cities.
In California, we have a large number of immigrants who work multiple jobs and use cash for many transactions, which can make a traditional home purchase a challenge.Finally, the elderly are a huge subset of the population that desperately need affordable housing because they have fixed incomes with no room for uncertainty around housing costs.
What solutions are available for the lack of affordable housing?
Rent control is often touted as the best solution, but it’s a double-edged sword. For someone who can get into a unit with rent control, it’s great. But from the perspective of an owner, landlord, or future resident, it’s a problem. Rent control in manufactured housing communities is inherently flawed. When rents are kept below market the subsidized rent is captured by the first resident through inflated housing resale prices.
While the first resident in the door wins, all future residents are losers. For proof, look no further than Malibu, home of million dollar manufactured housing. These homes have an actual value of $50,000 in a non-rent controlled market but sell at the exorbitant premium because the purchase price includes discounted rent. What do you think is more attainable for the population at large, $500 monthly rents and a million dollar home or $2,500 rents and a $50,000 home? The fact is that rent control doesn’t control the overall cost equation, it merely shifts from rents to home value. Hardworking prospective residents without significant savings are now locked out of this important affordable housing market.
Manufactured housing communities single-handedly help the State meet the need for affordable housing. California used to build 200,000 new houses a year. Now, that number is down to 80,000. All the while, more people come into the State and scramble to find a place to live. So the solution, besides building more housing? Thoughtfully planned manufactured housing is essential. Mobile home parks are one of the largest forms of unsubsidized affordable housing in the State.
What are the challenges of maintaining high quality, affordable neighborhoods in a market like California's?
As we delved deeper into some of the eligible neighborhoods that were originally built in the 1950s and 60s, our team was struck by the lack of infrastructure. We’re appalled that in a prosperous nation like the United States, some places still lack dependable running water, updated electric service, and functional sewer systems. It’s heartbreaking to go into these communities of hardworking, decent people and find they do not have these basics.
One reason why these services have not been updated is because it’s expensive.
Manufactured housing communities, in some areas, are apart from the city water and sewer system. It’s a self-funded, self-managed service. When we see that, we know that improving basic services has to be a top priority. Obviously, that kind of work requires a significant investment of funds.
Keeping monthly expenses attainable, especially for the elderly, is part of our mission. In most any community we take over where it looks like this population would be negatively affected, we offer a rent subsidy program out of our own pockets. It’s means-tested, subsidized rent for up to 10% of the community. There will always be some trade-off in order to create effective positive structural change. But overall, our goal remains the same: to offer great value in a great environment for all residents.
How do high quality, affordable homes improve the community as a whole?
When we create purposeful communities around high quality, affordable homes, we step in with the intention of establishing an atmosphere of care and respect for property, and by extension,individual personhood. We aim for Harmony Communities to be clean and neat, to have local ownership and governance through homeowner’s associations, and to make obvious to any onlooker that we care about our community, that people are watching, and that crime is not welcome. I think that this attitude – that people know each other and know about the neighborhood – helps increase safety and affects the greater good.
At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods,and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.
