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Vermont Commentary: Housing market boom shutting door on affordable homes
By Darren Allen

SOUTH BURLINGTON – The biggest problem confronting affordable housing advocates is the simple fact that, for the vast majority of Vermonters and other Americans, housing isn't a problem.

"For most of the country, housing is not a problem," said Nicholas Retsinas, director of Harvard University's Joint Center for Housing Studies. "In fact, it is getting better."

Speaking before a couple of hundred advocates at the 2004 Vermont Statewide Housing Conference last week, Retsinas ticked off what he called evidence of one America's great success stories. Bigger houses. More affordable mortgages. Increasing property values.

"The American people are better housed than they have ever been in history," Retsinas said. "If you've owned a home in the last five years, you can go to sleep at night and you make money."

Retsinas is not saying the housing crunch isn't real — it very much is, as wages stagnate and the cost of renting or owning a home in Vermont and elsewhere continues to soar. He was pointing out the difficulty of engaging the public about the problem of inadequate housing, particularly when that public is, in the main, so well-housed.

Sarah Carpenter, executive director of the Vermont Housing Finance Agency, makes a living raising the issue of inadequate and expensive housing. Last week, she reminded conference attendees of the dire consequences that flow from an inability to secure a decent, affordable place to live.

"We have a serious housing problem in Vermont, and we have a ton of work to do," she said, pointing out a few statistics. The average cost of a house in Vermont has soared 60 percent in seven years, when the average wage over that period only grew 20 percent. "Wages just aren't keeping up," she said. "I see it as a matter of supply and demand, and we don't have enough supply. The answers to this are tough."

Vermont also has a sizable population of people who pay more than 30 percent of their income toward their rent or mortgage — some even have to fork over more than half of their paycheck just to have a roof over their heads.

And then there are those who can't make the math work.

"There are 4,000 homeless Vermonters," Carpenter said. "That's a pretty tough reality."

So the housing problem is real. In Vermont, obstacles to increasing the supply — and, consequently, the price — of our housing stock abound. One of the culprits is local zoning, in which many of the state's towns plan away any chance of developing a sizable housing project. (Look no further than Montpelier, which has a 100-acre parcel once zoned for many dozens of units that is stuck in limbo as city planners debate whether it should ever be developed.)

But one of the biggest problems is a phenomenon hardly unique to Vermont.

"There is a culture of NIMBYism nationally," said Retsinas.

You know NIMBY: that wind farm would be great, except not in my back yard. Affordable housing is necessary, but just don't put it too close to my house, because my property values might plummet.

More than 1.6 million new homes are built every year in America. Almost none of them are starter homes. Why? Because home builders feed an almost insatiable appetite for bigger, more expensive houses.

Meanwhile, remember that it is not just the working poor who are struggling to put a roof over their heads — countless employers in Vermont are growing frustrated with the lack of affordable housing for potential employees.

In short, as Carpenter said, there's an imbalance in the market, a disconnect between supply and demand. But housing doesn't work as most markets do by inexorably seeking equilibrium.

"Part of this is that there is no truly free market in housing," Retsinas said, imploring housing advocates to argue about the economic harm that can come about from a lack of affordable housing rather than hitting people over the head with the immorality of the current situation. "Social justice as your primary rationale just doesn't carry the day."

Darren Allen writes weekly about Vermont issues, people and events. You can reach him at darren.allen@timesargus.com.