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It's no secret that many parts of the city have been gentrifying rapidly over the course of the past decade, and Lawrenceville may just be the best poster child of this.
In Lower Lawrenceville median home sales prices have gone from $35,000 in 2007 to $251,000 in 2016.
In Central Lawrenceville median home sales prices have gone from $66,000 in 2007 to $244,000 in 2016.
In Upper Lawrenceville median home sales prices have gone from $30,000 in 2007 to $182,000 in 2016.
Median housing sales prices and median rents have continued to explode in Lawrenceville, making typical 1-BR apartments and homes unaffordable to most entry-level renters and entry-level buyers, respectively.
I was made aware of a new program that is now available in which homes in Upper Lawrenceville are going to be made AFFORDABLE to first-time home-buyers.
The homes will be priced between $120,000-$140,000.
The estimated monthly mortgage cost will be $800-$1,075
The estimated down payment requirement will be $6,500-$9,500.
Interested buyers should be earning no more than 80% of the area's median income at the time of application (<$39,900/yr. for an individual and <$45,600/yr. for a couple).
What do I LOVE about this more than ANYTHING?
I've been involved in some epic "Great East End Housing Crisis" debates on here with a few members---I believe WhoIsStanwix, PghYinzer, and eschaton come to mind, among others. My thought process is that someone should buy a house for thrice their annual gross household income (general rule of thumb). Then when it would be time for resale it would be sold for NO MORE THAN thrice what the prevailing median household income of the neighborhood is at the time of resale, regardless of how "trendy" the neighborhood became during the time of ownership. For example, let's suppose the median household income of Polish Hill is $45,000 in 2016. Someone earning that income in the neighborhood would buy a home in the neighborhood for $135,000. In 2030 that person would like to sell their home. The median household income of Polish Hill at that time is $62,000. The home should be sold for NO MORE THAN $186,000 to permit another entry-level middle-of-the-road buyer in 2030 to have the same opportunity to purchase shelter as the original buyer had in 2016. Hypothetically maybe the home "COULD" fetch $240,000 in 2030. However, the buyer(s) of that home would then need to be earning $80,000/year ($18,000/yr. over the prevailing median household income at that time) meaning a home that was available for a median-earning buyer in 2016 was now pulled out of the grasp of affordability of a median-earning buyer in 2030. In a city with a finite housing stock and supply this means people need to earn progressively more and more annually to afford the same type of home that their predecessor could have purchased.
This program? It has a stipulation very similar to what I proposed in a debate on here. When it comes time to sell one of these homes in Upper Lawrenceville, the seller gets back their down payment, the amount of money they paid towards the mortgage at the time (or the entire mortgage amount if the house was paid off), and then a PORTION of the appreciation of the home indexed to the prevailing rise in median household income in the neighborhood during that same timeframe. In this sense you can cash out with SOME profit from the home while not making such a killing that the next buyer, instead of being middle-class like YOU were when you bought the home, must now be UPPER-MIDDLE-CLASS in present-day to afford your home.
Here's a very helpful slideshow with more information about the program:
I've got no issue with this sort of arrangement if it is entered voluntarily. You get into a community for below market rate but commit to selling below market rate. If all of the legal procedures are in place to keep this going, by all means. If prices increase at twice the rate of wage inflation, though, I can see some bribery happening at the next transfer of title of things aren't monitored and enforced carefully. I would also never support anyone trying to impose this upon existing homeowners or making an entire community work this way.
One question - what happens if someone improves the property? Are they not entitled to recoup their investment?
The key difference between what you have been saying for years is that the construction of these houses is subsidized so it makes sense you can’t sell them for huge profits. You have been trying to shame the homeowners on this board into feeling as if they shouldn’t maximize the returns on their investments which are unsubsidized.
What I don’t like about this whole program is that we have many safe neighborhoods where houses cost much less than the ones to be built. We should be working to repopulate other neighborhoods with home owners rather than concentrating our efforts on feel good things. It’s one thing to move an elderly resident or the truly poor (aka those that struggle to find their next meal, dont waste money at Starbucks, and can’t afford heat or a car) to a different area removing them from a required community of doctors, jobs, and caregivers. However, there are many that could have bought a house years ago in a number of neighborhoods, but they didn’t want to leave your beloved East End. They make it sound like leaving the East End is like becoming a refugee or something. I can guarantee that they would survive just fine living in Beechview or Brookline. SCR you may feel poor in the East End, but you would be completely average income in many other neighborhoods.
It's no secret that many parts of the city have been gentrifying rapidly over the course of the past decade, and Lawrenceville may just be the best poster child of this.
In Lower Lawrenceville median home sales prices have gone from $35,000 in 2007 to $251,000 in 2016.
In Central Lawrenceville median home sales prices have gone from $66,000 in 2007 to $244,000 in 2016.
In Upper Lawrenceville median home sales prices have gone from $30,000 in 2007 to $182,000 in 2016.
Median housing sales prices and median rents have continued to explode in Lawrenceville, making typical 1-BR apartments and homes unaffordable to most entry-level renters and entry-level buyers, respectively.
I was made aware of a new program that is now available in which homes in Upper Lawrenceville are going to be made AFFORDABLE to first-time home-buyers.
The homes will be priced between $120,000-$140,000.
The estimated monthly mortgage cost will be $800-$1,075
The estimated down payment requirement will be $6,500-$9,500.
Interested buyers should be earning no more than 80% of the area's median income at the time of application (<$39,900/yr. for an individual and <$45,600/yr. for a couple).
What do I LOVE about this more than ANYTHING?
I've been involved in some epic "Great East End Housing Crisis" debates on here with a few members---I believe WhoIsStanwix, PghYinzer, and eschaton come to mind, among others. My thought process is that someone should buy a house for thrice their annual gross household income (general rule of thumb). Then when it would be time for resale it would be sold for NO MORE THAN thrice what the prevailing median household income of the neighborhood is at the time of resale, regardless of how "trendy" the neighborhood became during the time of ownership. For example, let's suppose the median household income of Polish Hill is $45,000 in 2016. Someone earning that income in the neighborhood would buy a home in the neighborhood for $135,000. In 2030 that person would like to sell their home. The median household income of Polish Hill at that time is $62,000. The home should be sold for NO MORE THAN $186,000 to permit another entry-level middle-of-the-road buyer in 2030 to have the same opportunity to purchase shelter as the original buyer had in 2016. Hypothetically maybe the home "COULD" fetch $240,000 in 2030. However, the buyer(s) of that home would then need to be earning $80,000/year ($18,000/yr. over the prevailing median household income at that time) meaning a home that was available for a median-earning buyer in 2016 was now pulled out of the grasp of affordability of a median-earning buyer in 2030. In a city with a finite housing stock and supply this means people need to earn progressively more and more annually to afford the same type of home that their predecessor could have purchased.
This program? It has a stipulation very similar to what I proposed in a debate on here. When it comes time to sell one of these homes in Upper Lawrenceville, the seller gets back their down payment, the amount of money they paid towards the mortgage at the time (or the entire mortgage amount if the house was paid off), and then a PORTION of the appreciation of the home indexed to the prevailing rise in median household income in the neighborhood during that same timeframe. In this sense you can cash out with SOME profit from the home while not making such a killing that the next buyer, instead of being middle-class like YOU were when you bought the home, must now be UPPER-MIDDLE-CLASS in present-day to afford your home.
Here's a very helpful slideshow with more information about the program:
The key difference between what you have been saying for years is that the construction of these houses is subsidized so it makes sense you can’t sell them for huge profits. You have been trying to shame the homeowners on this board into feeling as if they shouldn’t maximize the returns on their investments which are unsubsidized.
What I don’t like about this whole program is that we have many safe neighborhoods where houses cost much less than the ones to be built. We should be working to repopulate other neighborhoods with home owners rather than concentrating our efforts on feel good things. It’s one thing to move an elderly resident or the truly poor (aka those that struggle to find their next meal, dont waste money at Starbucks, and can’t afford heat or a car) to a different area removing them from a required community of doctors, jobs, and caregivers. However, there are many that could have bought a house years ago in a number of neighborhoods, but they didn’t want to leave your beloved East End. They make it sound like leaving the East End is like becoming a refugee or something. I can guarantee that they would survive just fine living in Beechview or Brookline. SCR you may feel poor in the East End, but you would be completely average income in many other neighborhoods.
It also says the income requirement is "at the time of application."
So I imagine you can be an “artist” who is barely getting by, purchase the house, and then decide that you are giving up the dream and get a corporate job making 75k+ and keep the house. Heck, maybe I should quit my job, live poor for a year or two, and then reenter the workforce and enjoy house in Lawrenceville.
Last edited by PghYinzer; 01-07-2017 at 01:33 PM..
Also, how is a house payment between $800-1075 a month affordable to someone making 32k a year? That is around what I made when I graduated college (what feels like eons ago) and I split a 2 bedroom with 2 other people. I paid $350 a month. I then lived alone when making around $35k and paid around $580 a month and it was the most miserable existence ever.
But what makes this even more mind blowing to me, my unsubsidized house has a payment that is about half of what these will carry. So again, you can actually get a cheaper house the old fashioned way, earn as much return on your investment as you can, but all it takes is moving out of that neighborhood.
People making $32,000 should be buying a house 4x their annual income?
Quote:
Originally Posted by PghYinzer
Also, how is a house payment between $800-1075 a month affordable to someone making 32k a year? That is around what I made when I graduated college (what feels like eons ago) and I split a 2 bedroom with 2 other people. I paid $350 a month. I then lived alone when making around $35k and paid around $580 a month and it was the most miserable existence ever.
But what makes this even more mind blowing to me, my unsubsidized house has a payment that is about half of what these will carry. So again, you can actually get a cheaper house the old fashioned way, earn as much return on your investment as you can, but all it takes is moving out of that neighborhood.
I think I may have explained the income restrictions incorrectly, and for that I apologize.
The median income of the area is $49,900 for a household of 1 and $57,000 for a household of 2.
80% of the median income of the area would be $39,900 and $45,600, respectively. If you're single you can earn UP TO $39,900 and still qualify for this program. If you're single and make $40,000+, then you're out of luck altogether because a single person earning a $40,000/year couldn't afford to comfortably buy a home in Lawrenceville without being subsidized via a program like this.
Also, PghYinzer, I hear you loud and clear; however, you always make it sound like Brookline is some "dirt cheap" neighborhood. It's not. Have you seen the listing prices lately in Brookline? They're not Lawrenceville-crazy, but they're largely unaffordable to households earning <$50,000/year and are only going to continue to get more expensive. Almost every home in Brookline <$100,000 is a foreclosure, is under contract soon after being listed (indicating high demand for entry-level housing in the neighborhood), or needs a ton of work (i.e. not really "affordable" if you're going to be spending most of your income keeping up with a $100,000 mortgage). There ARE quite a few nice homes in Brookline priced $120,000-$150,000 (meaning someone earning $40,000/year-$50,000/year could comfortably afford them), but those same homes used to go for $80,000-$100,000 not all that long ago.
I'm not being selfish and worrying about MYSELF and MYSELF alone, guys. Even if I were to restructure my debt, work more overtime, save aggressively, and buy a $110,000 home in Brookline in 2018, what about people in my situation looking to buy in Brookline in 2025, for example, when, if current trends hold true, the modest appreciation of housing in a neighborhood in Brookline coupled with anemic real wage growth among the working-class will make Brookline "unaffordable" to entry-level buyers, too? We could tell them "Not all of us can be lucky enough to afford Brookline. Try Beltzhoover." That's fine. Then in 2035 when Beltzhoover is pricing people out?
We need to start building UP in this city, and we need to STOP listening to the anti-density NIMBY's. I'm still seething that the residential tower that was proposed in the Upper Strip had so much opposition from selfish upper-middle-class homeowners in my own neighborhood who were concerned about "views" and "character" (code words for "I already got mine, so *@&@& you!")
What really needs to happen is a higher minimum wage, but given our impending political climate I foresee eight more years of stagnant real wages while housing prices continue to climb modestly to moderately throughout the city.
In any event I DO love Brookline, too. How could you walk from Brookline to Downtown, though? Is there a way around the Liberty Tunnel? Currently my commuting costs are $0 because I walk back-and-forth to work. I work 24 days per month. At $5 round-trip daily for the bus that would be $120/month in commuting costs that would need to be factored in as an added expense for those of us moving to further out neighborhoods.
It also says the income requirement is "at the time of application."
So I imagine you can be an “artist” who is barely getting by, purchase the house, and then decide that you are giving up the dream and get a corporate job making 75k+ and keep the house. Heck, maybe I should quit my job, live poor for a year or two, and then reenter the workforce and enjoy house in Lawrenceville.
This is why I don't believe in affordable housing programs centered on OWNERSHIP. Living, for many years, in NYC, I also know that a lot of young adults receive a TON of parental support. A newly graduated financial professional whose parents help with the mortgage could end up with a prime home, for a song, and enjoy a long, lucrative career while enjoying below-market housing costs. No thanks.
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