Jersey City Mixed-Income Community is the Next Step toward Creating the City of 2050

By Erika Schnitzer, May 15, 2009

Jersey City, N.J.–Franklin Development Group and the Jersey City Redevelopment Agency (JCRA) recently broke ground on Margaret S. Herbermann Manor, a 45-unit mixed-income community located in the Heights neighborhood of Jersey City, N.J. The development is just one component of a larger, ongoing redevelopment effort.

The expected $16 million development, which is slated for completion in the spring of 2010, will be financed by a combination of New Jersey Housing & Mortgage Finance Agency’s “CHOICE” program and M & T Bank.

“CHOICE,” conceived to encourage the development of for-sale housing in Smart Growth areas throughout N.J., focuses on home ownership. “So that we can sell the condos, there are a number of subsidies from Jersey City’s Affordable Housing Trust Fund, the U.S. Department of Housing and Urban Development’s HOME fund and from the New Jersey Housing & Mortgage Finance Agency,” says Paul DeBellis, Sr., president of Franklin Development Group. “In addition, what makes this unique is that one of the waterfront properties had the responsibility to supply 25 affordable housing units so it put in an additional $2.5 million in subsidies.”

Herbermann Manor is the second new workforce housing project to break ground in Jersey City, with the first being the eight-unit Harriet Tubman Townhomes. Next month, the Jersey City Redevelopment Agency plans to break ground on Mary Norton Manor, which will add an additional 24 units. In total, JCRA has approximately 300 units in the pipeline.

“The hallmark of this housing is an inclusionary policy of all income groups,” says Robert Antonicello, executive director of Jersey City Redevelopment Agency. He adds that all projects are designed for at least LEED (Leadership in Energy and Environmental Design) Silver certification “so they are sustainable and affordable to own and operate. A lot of times these get built as code housing and it becomes, for a lot of low- and moderate-income families, very expensive to live [in] because it’s expensive to maintain.”

A five-story, all-brick elevator building, Herbermann Manor's green features will include tankless hot water heaters, high efficiency air conditioning and heating, low-E windows and green landscaping.

Despite the fact that the project team was able to get the development financed, Antonicello notes, “the problem with workforce housing is that federal and local funding is aimed at people making no more than 80 percent of AMI. But you need to subsidize those between 80 and 120 percent AMI.” He adds, “We continually try to develop new sources of funding to bridge that gap,” explaining that the Jersey City Redevelopment Agency’s goal is build a model for others.

Margaret S. Herbermann Manor, which will be four stories of condominiums over one level of parking, will be comprised of five low-income units, five very low-income units, five moderate-income units and 30 workforce housing units. All residences, which are two-bedroom units, will average approximately 1,100 sq. ft., and about half of the homes will be on one level and the balance will be duplex layouts.

According to DeBellis, Sr., the units at Herbermann Manor that are set aside for those with very low incomes will sell at the 45 percent AMI level, or $60,000, the low-income units will sell at 55 percent AMI, or 79,000, the moderate-income units will sell for 72 percent AMI, or $118,000 and the workforce units will sell for $279,000.

“There are two restrictions on all units,” Debellis tells MHN. “So that they are not used for investment purposes, they have to be owner-occupied, and if the owner sells within the first five years, they have to split the profit with the State of New Jersey. The shared equity keeps [the owner] in there so they are not looking to pick up a profit.”

As Antonicello points out, affordable housing is generally concentrated in particular neighborhoods. In the case of the JCRA’s plan, the developments are spread across the city. “Now we get people who understand the housing,” Antonicello tells MHN. “We get people who approach us. In the past, people didn’t want affordable housing in their neighborhood. It’s been a paradigm shift. The flip side is they are now competing with other neighborhoods for this kind of housing. There’s a large need out there for us and we are just trying to be as creative as possible.”

Antonicello also tells MHN that JCRA is “becoming evangelical” about workforce housing.” He says, “Keep in mind that Jersey City is right across the river from New York City, where the population is 8.1 million. If we don’t produce this housing, what will happen is that market-rate housing [in Jersey City] will become much more expensive. There will be a lot of pressure on the middle-class, so we are trying to address that now. We are being proactive. We are always concerned about the city in 2050. That city is the city we’re creating.”

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Gentrification Issues

Podcast link:
Gentrification on KunstlerCast

The KunstlerCast is a weekly audio program about the tragic comedy of suburban sprawl.

Featuring: James Howard Kunstler, author of The Geography of Nowhere, The Long Emergency and other books.

Duncan Crary, host/producer, speaks with Kunstler weekly about the failure of suburbia and the inevitable end of this living arrangement with no future.

Haves and Have-Nots: Income Inequality in America: NPR

by Uri Berliner

NPR.org, February 5, 2007 · An America where some have more money than others is nothing new. But in the past generation, the financial gap between the rich and everyone else has grown ever wider.

This week, NPR features a seven-part series that explores the human side of income inequality in the United States. We'll have stories about workers who are severed from the middle class when their manufacturing jobs disappear. We'll be speaking with people like Larry Podeswik, a wiry 52-year-old ex-Marine who lost the best-paying job of his life when the Carrier Air Conditioning company shut down its factory in Syracuse, N.Y.

We'll meet people who have succeeded beyond their wildest expectations, because their particular skills meshed perfectly with the Internet age. We'll explore the role of luck and timing — and marriage. And we'll look at what happens when middle- and working-class students attend an elite college with much-more-affluent peers.

The Very Rich… and Everyone Else

To get a sense of how the very wealthy have prospered over the past generation, consider this: The share of total income going to the top-earning 1 percent of Americans went from 8 percent in 1980 to 16 percent in 2004.

That doesn't mean that the average family is worse off than a generation ago; more people own homes, go to college, drive reliable cars and have access to sophisticated health care than ever before. But while the average family has done well, the very rich have done much, much better.

One reason: gains in the stock market. Affluent people own more stocks, and executives are often paid in stock or stock options. So when the market does well, their wealth accelerates quickly. Over the past 10 years, for example, the S&P 500, a broad proxy for the market, has increased 86 percent. At the same time, the people at the very top saw their incomes surge: In the 1970s, corporate chief executives earned 30 times as much as the average worker. Ten years ago, CEO compensation was 116 times the average. CEOs now earn close to 300 times as much as the average worker.

During the same 10-year period, American workers became among the most productive in the rich, industrialized, world. But the growth in their wages, when adjusted for inflation, was spotty at best.

What's Behind the Gap?

This widening gulf between the haves and have-nots has been a consistent trend for a generation or more. Economists largely agree about the primary underlying reasons. New technology has made many jobs obsolete, while creating dramatic opportunities for wealth in computers, finance, and media and entertainment. Global competition has done the same. As middle-class assembly-line jobs vanish, and routine white-collar work gets outsourced overseas, the value of education and special skills rises. The power of unions continues to decline.

For people in the broad middle class, the economic picture over the past decade has been mixed. Unemployment has been low and inflation largely contained. But behind those reassuring trends, you'll find a lot of volatility in labor markets — what economists call "churn." In short, there's more hiring and firing going on.

That churn had led to new opportunities for many workers, but caused hardship and anxiety for many others. Add to this the fast-rising cost of health care and the decline of employer-paid pensions, and you understand why many middle-class families describe themselves as financially squeezed. Low-income Americans, of course, are financially squeezed as well, only more so.

Is the System Broken?

Even the staunchest free-market advocates agree that a widening income gap can be harmful to a society if it cuts people off from economic opportunity. But they aren't convinced that is happening now.

Economists and others who dismiss fears about the income gap point to the low unemployment rate, rising home ownership and a fertile environment for entrepreneurship as evidence that economic opportunity is alive and well. And they argue that it's fine and well if the rich are getting a lot richer, as long as most other people make some economic progress and have the opportunity to make a lot more.

But others – including many politicians — are convinced that something has gone awry in our economic system, threatening the underpinning of the American Dream. Former Sen. John Edwards of North Carolina based his 2004 bid for the Democratic nomination for president on a "two Americas" theme. Democrat James Webb made economic insecurity a centerpiece of his Senate victory in traditionally Republican Virginia. President Bush hasn't emphasized income inequality much during his administration. But he pointedly mentioned it twice last week in a speech on Wall Street. Better schools, he said, can help close the wealth divide.

Action on Capitol Hill

Democrats in Congress have begun to introduce legislation designed to assist lower- and middle-income Americans, from raising the minimum wage to cutting interest rates on student loans. They will try to change labor laws to make it easier for unions to organize. And many will oppose an extension of the Bush administration tax cuts that have benefited wealthier Americans.

Conservatives tend to be mistrustful of any attempt to fix income inequality by making new laws. And they argue that the big increase in single-parent families has contributed significantly to the wealth gap — more so than liberals often acknowledge.

Economists of all political persuasions believe income inequality transcends partisan politics: Neither party caused it, and neither party has the means to reverse it. There are just too many forces at work for the wealth gap to be halted by a flurry of bills passed in Washington.

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New Urbanism

New Urbanism is an urban design movement that promotes a return to traditional neighborhoods, as well as the revitalization of cities and town centers. It was officially founded in the 1990’s by a group of renegade architects and planners, in reaction to sprawling development patterns of the automobile era. The Congress for the New Urbanism (CNU) spearheads the effort to create compact, walkable neighborhoods.

New Urbanism (NU) takes many forms. It includes masterplanned communities like Traditional Neighborhood Developments (TND) and Transit Oriented Developments (TOD), but also smaller projects, such as a group of renovated row houses within an existing city block.

History of Suburbia

James Howard Kunstler, writer and critic of the American surburban landscape, explains that suburbs emerged because people wanted to flee the true horrors — pollution, bad air, poor sanitation, crime — of industrial cities of the late 19th and early 20th centuries [1]. People yearned for a cabin in the woods or a little house in the country, or at least an escape from the factories that were filling the central city.

However, before the car, some of America’s best building and urban design was being done in early decades of the 20th century. Good examples of neighborhood design are found in streetcar suburbs and in small towns, along Main Street, USA. These neighborhoods, mixed-used and scaled for people, are the standard that many New Urbanists try to emulate today.

With the rise of the automobile after World War II, Kunstler describes that suburbia "became a cartoon of itself. It became a cartoon of ‘country life.’ It was no longer country living in any meaningful way; it had become basically industrial living in an industrial box in a fake country setting.” [1] Most American suburbs, especially those built between 1970 and the present, are cheaply constructed, poorly designed and hastily planned.

History of New Urbanism

New Urbanism began to take shape after Seaside, Florida was developed in 1981. Seaside opened as an old-style, walkable neighborhood that displayed attractive architecture and thoughtful design – all of which were rare for new construction at the time. By the 1990’s, there was growing frustration with suburban sprawl, so an alternative vision would easily attract scores of devoted followers.

Congress for the New Urbanism

The Congress for the New Urbanism, formed in 1993, is the founding organization of the New Urbanism movement. It sponsors annual meetings called Congresses, where “architects, landscape architects, planners, economists, real estate agents and developers, lawyers, government officials, educators, citizen activists, and students discuss issues related to the health and vitality of regions, towns, and neighborhoods.” [2] CNU was originally assembled by Peter Katz, who became the group’s first Executive Director.

The organization takes a very broad approach and “advocates the restructuring of public policy and development practices to support the restoration of existing urban centers and towns within coherent metropolitan regions.” [2]

Charter

The Charter for the New Urbanism [3], unveiled in 1996, establishes the principles of NU that revolve around reinvesting in central cities, reconfiguring suburbs and preserving countryside – with the goal of creating real places. The charter is divided into three main sections that descend in spatial scale:

The Region: Metropolis, city, and town
The neighborhood, the district and the corridor
The block, the street and the building

Each section presents 9 principles that should be considered not only by New Urbanist planners and architects, but by all decisionmakers involved in urban development. One key idea is that cities and towns should have recognizable centers and borders, beyond which new construction is strictly avoided. In addition, neighborhoods should be “compact, pedestrian-friendly, and mixed-use”. Regional architectural styles, historic preservation and shared public space are also crucial.

Canons of Sustainable Architecture and Urbanism

CNU created an addendum to its charter – partly in response to criticism has been leveled at New Urbanism, but also to address the emerging environmental crises of the new century. For example, critics pointed out that several New Urbanist developments were built on farmland or open space, much like sprawling subdivisions. The Canons [4] attempt to link green building with urban planning, while emphasizing environmental issues like land conservation and global warming.

Hurricane Katrina

Hurricane Katrina brought New Urbanism national attention, as New Urbanist planners were called upon to help rebuild New Orleans and the Gulf Coast.

New Urbanist Developments: Some Examples

Seaside, Florida, USA (1981)

The Kentlands in Gaithersberg, Maryland, USA (1989)

Oceanview Lofts in Berkeley, California, USA (1993)

Celebration, Florida, USA (1995)

Civano in Tucson, Arizona, USA (1997)

Orenco Station in Portland, Oregon, USA (1997)

Highland Terrace, Louisville, Kentucky, USA (2000)

Paseo Colorado in Pasadena, California, USA (2000)

Del Mar Station, Pasadena, California, USA (2003)


Criticism

One of the most salient critiques of New Urban projects is that many of them have consumed valuable farmland and open space. Just like conventional suburbs, they sometimes sit far from town centers. CNU’s revised Canons have therefore called for building primarily on urban infill and urban adjacent land.

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Economic Segregation Impacting Education

News & Notes: NPR , October 30, 2007

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A new study released by the Southern Education Foundation shows that most public school students in the South are from low-income households.

Joining Farai Chideya to talk about the implications of that finding are Lynn Huntley, president of the Southern Education Foundation, and Joseph Edelin, a teacher at Kipp Ways Academy in Atlanta, Ga.

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THE STABILITY OF MIXED INCOME COMMUNITIES

by Douglas J. Krupka, January 2006

Income segregation is a visible aspect in American urban areas. Many believe that the presence of isolated populations of the poor in central cities and inner ring suburbs has important effects on residents, including reducing upward mobility. The undesirable sideeffects of economic sorting underlie policy interest in creating and sustaining mixed-income communities in American metropolitan areas. To varying degrees, federal, stateand local governments all attempt to induce greater income mixing in select neighborhoods through regulation and subsidies. While proponents of these efforts assume that if a mixed income neighborhood can be created, the income mixing that is induced will persist, the accuracy of this assertion has never been directly tested.

The level of economic segregation in American metropolitan areas offers something of a puzzle. Mixed income neighborhoods exist in all cities, despite the broad pattern of economic segregation. Standard urban economic models predict strict sorting along economic lines (Alonso 1964, Muth 1969, Tiebout 1956), a result that motivated a line of research explaining mixed-income neighborhoods. 1 Taking a cue from studies of racial sorting, the prevailing approach to explaining mixed-income neighborhoods tends to rely on the assumption that residents obtain additional enjoyment or benefits from living in such neighborhoods. Nonetheless, the results from these models are not very robust; often the mixed equilibrium is only one of several equally likely outcomes or occurs only for arelatively small range of parameter values. These studies ignore the fact that the standard models predicting economic segregation describe long-run equilibria while the income-mixing data are derived from cross-sectional snapshots of urban areas in America at a single point in time. A dynamic interpretation of models that predict income segregation implies that mixed income neighborhoods may exist due to transitional factors, but will not be stable in the long run. The fundamental question then becomes: are mixed-incomeneighborhoods self-sustaining equilibrium outcomes or are they simply observations of transient states, neighborhoods that are in the midst of changing from one income group to another? New research by Krupka (2005) offers the first rigorous attempt to empirically answer this question.

The analysis of mixed-income neighborhood stability presents subtle statistical issues. The standard models of income segregation suggest lengthy periods of transitional mixing. In the standard Alonso/Muth model, people sort by income into homogenous neighborhoods because different income groups value land differently and the marketallocates land to valued uses. However, secular trends like population in-migration or uneven growth in income across the population are likely to change the structure of an urban area slowly; neighborhoods will not instantaneously change to accommodate the new income group. Costs of relocation and housing stock adjustment slow this adjustment process down considerably. If this transitional process is at all extensive, census data simply cannot speak to the stability of mixed income neighborhoods.

Tiebout offers a model of income segregation whereby families sort into jurisdictions in order to maximize their utility derived from the consumption of public services like education, police protection and garbage pick-up. If the demand for these and other public services exhibit strong income effects, people will sort into jurisdictions based on income. However, if public service levels are slow to adjust to demographic changes in the community, it may take a considerable amount of time before indigenous residents realize that non-preferred service levels are not aberrations, but permanent deficiencies in the community. It is only as families realize this transition is irreversible that they will consider a move to a new jurisdiction. The intervening years will likely include long periods of uncertainty as the political process works out which income group “wins” and gets its preferred level of services. During these periods, jurisdictions will exhibit substantial mixing, but this is no sign that the mixing represents a stable situation.

Finally, if we adopt Schelling’s (1969) approach of assuming people have direct preferences for the incomes of their neighbors, income mixing again appears to beunsustainable at the neighborhood level. These income preferences could arise from various sources: neighborhood externalities, or demand effects on the provision of privategoods and services. This equilibrium, however, is most likely reached via a long transitional period whenever demographic or economic change in the metropolitan area as a whole cause neighborhood instability. These transition periods will exhibit large amounts of income mixing, as classes are thrown into neighborhoods together and wait to see which class will become the dominant group in the neighborhood. If these transitions are at all drawn out, cross sectional estimates of mixing will simply not reflect the long-run equilibrium level of mixing, and cannot yield any insights into long run neighborhood stability

Krupka’s (2005) empirical study of mixed-income stability draws from a private data set that compiles demographic, economic and housing information at the census block group level, and connects census geographies over thirty years. With this data it is possible to use the census block group as the unit of observation to study how neighborhoods change over time. There are three predictions that the models of income segregation make. Allof them are interpretations of the idea that income mixing is not a stable equilibrium. The first prediction is that neighborhoods that exhibit large amounts of income mixing will tend to become more homogenous over time. Second, income mixing will be a result of instability in neighborhood demographics. Finally, a mixed incomeneighborhood, because it is unstable, will tend to have larger changes in demographic mix over the ensuing time period as sorting occurs, and the neighborhood empties out except for a homogenous group

The study tests these predictions using the standard deviation of income in theneighborhood as a measure of the amount of income mixing. Demographic instability (or change) is measured by the magnitude of the change in neighborhood median income. Several control variables are included in the empirical analysis. The results suggest thatneighborhood demographic shocks are indeed a primary predictor of income mixing, while prior income mixing is a strong predictor of subsequent demographic transitions, just as the standard economic segregation models predict.

The most important result, however, is that the amount of income mixing does indeed decrease over time. All else equal, the most conservative estimates reveal that a typicalmixed neighborhood will lose at least 20 per cent of its standard deviation in incomes over ten years. This estimate ranges to as much as 70 per cent per decade in some cases.

These results are important for two reasons. First, they are consistent with the prevailingview of neighborhood income mixing as a transitional phenomenon. The branch of the economics literature which has struggled to explain mixed-income neighborhoods as stable equilibrium outcomes appears to be on the wrong track.

On the other hand, stable mixed-income communities have been a public policy goal for some time. Local housing agencies, redevelopment authorities and HUD have all offered incentives to developers to induce the development of such communities. The logic ofsuch policies would seem to be that mixed-income communities, while preferred by all,are unprofitable because of some sort of market imperfection.

In the face of these policy initiatives, it is important to understand how and why income mixing occurs. If it is the case that people prefer to live in mixed neighborhoods but real estate markets do not provide them, then the policies encouraging such development will be correcting a market failure. The empirical evidence, however, indicates that this is not the case; whatever households’ expressed attitudes about income-mixing per se, economic forces shaped by household residence decisions, business location and/or public service provision do not allow extremely mixed neighborhoods to persist.

This is not to say that public policy has no place in encouraging mixed-incomeneighborhoods. There are justifications for valuing such communities beyond households’ preferences. The fact that income mixing within block groups is so substantial (over 60 per cent of the total variance in income occurs within block-group boundaries) might give planners hope that sustaining mixed neighborhoods is not impossible. Nonetheless, this empirical research indicates that market forces work against income-mixing so that mixed-income advocates must recognize that maintaining such neighborhoods requires sustained policy over time

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Low income housing: beneficial for students?

Mat Lindenberg - The Clipper, 10/10/08

As tuition and other college expenses and the pure cost of living escalate, more and more students in Washington and across the nation are finding it harder to live on their own. Yet not every student has the support of parents to fall back on, or enough money to even share the rent with a few other roommates.

College students are a notoriously thrifty bunch, living on a diet of Top Ramen and powering their cars with crossed fingers and whatever change hides in their pockets, yet a lack of disposable income does not necessarily qualify you for low-income housing.

"The system was not designed, or intended, for (a majority of) college students," said Jerry Brevier, a Housing Management Coordinator for the Low Income and Affordable Housing Institute.

"This is a program for the homeless and soon to be homeless, senior citizens and the disabled, and people who do not make enough money or have the ability to pay rent and [support families]."

Still, there are a number of students who can and will benefit greatly from low income housing. It is important, however, to know both your rights and your landlords, and to be aware of the regulations involved so you don't suddenly end up on the street or be found ineligible and owe back rent to the government.

Low Income housing is defined by the government as housing that costs its residents 30 percent or less of their total annual income, and is only available to those who make less than 60 percent of the annual median income of the area in which they live. In Snohomish County, the most recent figures on the median income set it at $54,584, which means you must make less than 32,750$ to qualify. College students cannot legally apply if they are taking or plan to take more than 12 credits a semester.

Most people who live in Low Income Housing are also able to get some, most, or all of their rent paid for by the government under Section 8 of the US Housing Act of 1937. In 2006, however, numerous regulations were introduced after loopholes in the law allowed college students to not count money they received towards their college education as part of their total income.

Aid under Section 8 is now only available for college students who meet one of the following criteria:

Over 24.
Veterans of the Military.
Married, but still meeting income limitations.
Parents of a child considered a dependent for tax purposes.
Children of parents who both could qualify for low-income housing.


These, it should be noted, are the most basic rules - the housing authority in the county in which you live, or the landlord you are renting from may have their own rules. The Snohomish County Housing Authority did not return calls for a statement.

"We hear from people, time to time, who take advantage of this program," said Brevier. "It really is sad to me, because {Low Income Housing} is like welfare; it's for those that need it."

WSU Student and internet blogger 'Kirt' recently wrote about his interaction with his landlord after he was found to be in noncompliance. He talked via email with the author about some of the problems that come about when either the landlord or the tenant break the agreements.

"I lived in a low income housing complex for a few months and started taking more than the 12 credits [allowed, but I didn't report it.] The [landlord somehow found out], and threatened to [turn me into the government] unless I paid him [much higher rent]." 'Kirt' did not say how the situation turned out, or provide details to confirm his story.

"There are real legal consequences to lying about this sort of thing," said Brevier. "You can be charged with fraud and [many other charges, depending on your case.]"

According to a police report put out by the Department of Justice in 2007, lying to receive Low Income Housing is "a felony that provides for a term of imprisonment of up to five years and a fine of up to $250,000 upon conviction."

Our area offers a lot of opportunities to take advantage of this program, and though as college students it is much harder to qualify, for those that need it low income housing could be a lifeline.

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