The Case Against Affordable Housing





Affordable housing is the wrong way to revitalize Trenton

(The article originally appeard in the Trenton Downtowner, September 2002)
by Dan Dodson

Rising median income is the surest sign that a city is revitalizing, but Trenton has lost ground over the last decade. According to the 2000 Census, New Jersey’s median household income has risen 4% over the last decade to $54,226 when adjusted for inflation and Mercer county’s has risen 6% to $56,612. Meanwhile, Trenton’s median household income has actually decreased 6.7%, when adjusted to inflation, to $31,074, that’s right, decreased.

There are only three ways this could have happened: 1) Trentonians didn’t receive pay increases, 2) highly paid people moved away, or 3) low income people moved in. The debate over housing won’t affect salaries much but it has everything to do with immigration in and out of our city.

The debate over housing is difficult

Affordable housing is a popular cause because it’s easy to want people to have nice homes. Arguing against the cause elicits strong emotions and breeds suspicion of racism and classism. The debate is made harder because the unintended consequences of subsidized housing manifest themselves over long periods of time to which the press and politicians have difficulty responding. Finally, workers in both governmental and non-governmental agencies tied to the affordable housing industry create a powerful lobbying force to which the public responds.

I take the approach that real public debate needs to think beyond short term benefits no matter how uncomfortable it may be.

Why is subsidized housing a bad idea for Trenton?

Building homes for low income people sounds like a good idea. But if it were such a great idea, why aren't our wealthy suburban neighbors doing it instead of paying us to do it for them?

More low income housing won’t revitalize Trenton

Becoming Princeton’s poor neighbor isn’t sustainable. One argument for affordable housing subsidies is that working people need a place to live and all those jobs in Princeton and West Windsor would go unfilled without affordable housing. That’s true, but low income housing also places a burden on police, social services, schools and has a negative impact on property values. Overburdening a city with low income neighborhoods drains the very social welfare systems meant to support the poor. The Mt. Laurel money that rich towns pay for Trenton to develop housing doesn’t cover these social costs. It’s a great deal for Princeton and a bad deal for Trenton.

Average is a great goal for Trenton

According to which provides quality of life information to leading real estate brokers, Trenton’s low income level ranks it in the bottom 9% of communities in New Jersey. Our schools are in the bottom 2% and our crime is in the bottom 1%. Students of NJ policy know that crime and school performance are highly correlated with a town’s median income and not even increased school funding seems to make a difference. The data for Hamilton, Princeton and Trenton show this to be true.

Because Trenton’s ratables are lower than our neighbors, we are always in the position of having to beg for more than our fair share of state, federal and private funds. Even with these donations and the highest tax rate in the county, the city budget is always under strain, our streets are littered and pot-holed and we’re closing firehouses.

If our incomes and home values were average, Trenton would no longer have these problems and with our history, charm and density would be a much better place to live than Hamilton.

Trenton has an oversupply of low income housing

According to the NJ Guide to Affordable Housing, Trenton has almost 6000 publicly funded affordable housing units; Hamilton has 436 and West Windsor 161. According to the 2000 census 89% of owner occupied homes were valued at under $100,000, 89% of rents were under $1000/month and 11% of rents were under $200/month. Only 0.5% of homes in Trenton are valued at more than $300,000. Trenton’s median home value is only $65,500, much below the $120,000 median national price and $171,988 in New Jersey. Trenton is a low cost housing haven in the middle of the highest priced state in the union. It is disingenuous to argue that Trenton has a shortage of affordable housing when the evidence clearly points to the contrary.

Downtowner readers who surely aced their college Economics courses, will know that increasing the supply of a product pushes down prices and then stimulates demand. When a family moves into new affordable housing there is always another family ready to move into their old apartment. Because Trenton has so many low income housing units, it is a very popular destination for low income people moving into central Jersey. We should be more worried about creating a better community for the folks who already live here than attracting low income newcomers.

Affordable housing initiatives hurt revitalization efforts

Low cost housing is not a bad thing and a healthy economy produces all types of housing and even allows housing stock to change in value over time. The damage is done when housing is restricted to a certain income group. Income restrictions prevent housing units from gaining value if a neighborhood improves. Therefore, the only direction income restricted housing and the neighborhoods surrounding it can go, is down. That’s what has happened with public housing projects.

If Trenton can find a way to move its median income up, then its quality of life factors will improve as well. Since affordable housing production moves income levels down, it has the opposite effect.
Trenton needs to be attractive to people with the money to build and renovate expensive homes, spend money in our restaurants and support our cultural organizations. More neighborhoods with homes in the $200,000 to $400,000 range will attract these middle class emigrants. A manageable urban city like Trenton could be a very attractive alternative to suburban sprawl, if only we provide a reason to move here.

Dan Dodson, a resident of Trenton, is a management consultant and Leadership Trenton Fellow.

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Copyright 2002, Dan Dodson