She asked, “how do you fund housing for hourly workers?”

Carlos Gasca Yanez
Jul 21, 2017 · 3 min read

If there will never be enough government or charity funds, then how do you create affordable housing for hourly workers?

I am making some basic assumptions on my proposed solution, they are:

  • There is a spectrum of housing needs, on one end there is charitable and government housing for people that otherwise could not be housed, at the other end is high value housing. In between, where more than 60% of us live is “market rate” housing;
  • “Market rate” housing meaning the rate that a housing unit can fetch in a particular city. As stated before cities have a bias towards high real estate values due to property taxes being key revenue. So there is never enough “market rate” housing that hourly workers can afford;
  • Rents will always grow faster than hourly workers wages;
  • There is a lack of housing options (lack of competition) in the real estate sector. We need to diversify occupancy options, building envelope design and development approaches that can deliver stable housing opportunities at rates that hourly workers can afford;
  • A sustainable solution could be to implement a more competitive housing Eco-system where local builders, tradesman and small investors can participate in responding to our city’s housing needs.

To create an Eco-system that supports a sustainable housing market place that meets hourly workers we need four basic elements;

  • Access to alternative forms of capital;
  • Access to land;
  • Supportive building and development policy;
  • Supportive legal infrastructure;

Sources of capital could include; an employer/employee fund and crowd-funding sources that enable instrumental funds and is accessible to unqualified investors;

  • Employers contribute x cents per hour times the number of hourly wage workers, of course thought would be given to who and how, building exceptions for small businesses, etc.
  • Employees could choose to match their employer funds and enroll in a housing savings program;

Combined these funds are used to mitigate risk and enable housing for hourly workers needs;

  • A spectrum of crowd-funding options available to unqualified investors could provide instrumental funds to enable housing development, for example: smallchange.com;

Access to land is supported by a real estate trust. The trust accepts “land deposits” in exchange for access to adequate housing options or other goals an individual may have. The real estate trust serves those that own property but are aging out of their housing situation or being driven out by speculative development. By pooling land together under a real estate trust individuals can acquire housing at rates they can afford in their own neighborhoods.

Supportive land policy could enable housing innovation in transit oriented development areas, as well as, innovations like cottage housing developments, cohousing, live/work housing, alternative materials construction, tiny-houses as accessory dwellings in standard lots.

Supportive legal infrastructure could include agreements for different types of occupancy and real estate development approaches. May include adapting existing forms to new circumstances.

In the ideal world if this housing Eco-system/marketplace existed then hourly workers could find stable housing options at 25% of their net-income (Industry standard is 30% of gross income). Our local economy would prosper as more people could afford to do other things than work and pay rent. Our cities quality of life would increase as more individuals are able to find stable housing.

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