On Sunday, May 17, Princeton’s Community Democratic Organization (PCDO) hosted a symposium on what many residents feel is Princeton’s central issue: how to keep — or, depending on your perspective, how to make — Princeton affordable.
What are some of the barriers to affordability in Princeton? Our property taxes, for one thing. We learned, from estimates prepared by Councilman Patrick Simon, that the 2015 property tax on an average Princeton home, which is assessed at just over $800,000, will probably be just under $17,700.
Where will that money go? Some 48 percent of our property taxes will go to the schools, 22 percent to the municipality, and 30 percent to the county. Startlingly, 50 percent of the county’s budget is spent on corrections. If everyone in Mercer County behaved themselves, in other words, our taxes would drop by 15 percent.
Our taxes could drop even more depending on the outcome of a lawsuit brought by attorney Bruce Afran on behalf of local taxpayers who challenge Princeton University’s tax-exempt, nonprofit status. At the May 17 meeting, Mr. Afran stressed that the university has done nothing illegal or immoral. But the university shares profits with many of its science faculty and undertakes other commercial activities. It cannot be deemed a nonprofit according to New Jersey law. The university has agreed to non-binding mediation in the case.
Meanwhile, the May 17 meeting addressed not just legally defined affordable housing but what some Princetonians call “housing that’s affordable.” By “housing that’s affordable,” I mean me and maybe you, or anyone who’s ever wondered whether they can afford to stay in Princeton.
How can Princeton — or any town — supply enough housing that’s affordable for middle- and low-income residents? Let me discuss rental housing, but similar arguments would apply to housing for sale rather than for rent.
According to Cheryl Cort, policy director for Coalition for Smarter Growth in Washington, D.C., conservatives and liberals offer different solutions to providing rental housing that’s affordable. Republicans argue that zoning and other building regulations constrict supply and drive up costs, so we should eliminate regulations. Then the free market will build housing for both high- and low-income households.
The argument that market supply-and-demand applies to housing is partly correct, Ms. Cort writes: “If there’s not enough housing on the market to meet demand, higher-income people will bid up prices and out-compete lower-income people.” This is already happening in Princeton.
And, yes, regulations do increase development costs and risks. Projects may be denied, delayed, or decreased. Developers need to make a return for investors. Housing won’t get built if the return isn’t high enough.
Ms. Cort calculates (these figures are from March 2015) that the baseline cost of building a one-bedroom apartment in D.C. requires a rental of “$2,000 a month to meet the level of return [an investor] demands.” Your income must be about $38 per hour, or $80,000 annually, for $2,000 to be only 30 percent of monthly income, which is the generally-recommended level of spending on housing. People who earn $15 an hour, or $32,000 a year, the new minimum wage in some states, can afford only $800 apartments.
One “solution” is for lower-income people to live in older housing, and this is what usually happens — except in places like Greenwich Village, Hodge Road, or Georgetown.
Meanwhile, Democrats, who argue correctly that new development mostly provides high-end housing, may oppose any new market-rate development. Perhaps they mistakenly ignore the law of supply and demand because they remember when local governments could supply below-market-rate or public housing. Those days are largely gone — although, as Bruce Afran implied, they may come again for Princeton.
Nevertheless, another, modest way to increase rental housing that’s affordable is by means of Accessory Dwelling Units, or ADUs.
ADUs — sometimes called granny flats or in-law apartments — are smaller, secondary dwellings on the same lot as a primary dwelling. They offer shelter, bathrooms, and cooking facilities. ADUs may be completely new construction, like a new addition or a garden cottage. Or they might be existing garages, basements, or attics converted into living space, maybe just by adding a hotplate and a microwave.
ADUs offer new housing units while respecting the look and scale of single-dwelling neighborhoods. They can be added to cottages or mansions. They use existing housing and infrastructure more efficiently, providing smaller housing for today’s smaller households (in Princeton, think retirees or the university’s post-docs). They free up larger apartments for families with children. And — most important — in return for some amount of investment, they offer the homeowner income. That is, they let two families find housing that’s affordable.
Our zoning should not only permit but actually encourage them. In particular, zoning should relax the parking requirement for new dwelling units since many young Princeton residents rely on bicycles or buses. ADUs should be allowed to homeowners as of right, and lot-size requirements should also be relaxed.
As I’ve written in this space before, my favorite kind of ADUs are tiny houses — as in “Tiny House Movement” — structures built like houses but perhaps only 250 or even 150 square feet, the size of a very small trailer. In fact, tiny houses are often built on wheels so they’re movable. If you could build a tiny house for $15,000, you could probably recoup your cost with one year’s rental. Here’s how easily zoning could encourage housing that’s affordable: make it legal to park tiny houses in Princeton’s driveways.
But let me mention that it’s already legal in Princeton to rent as many as two rooms in your home to two people per room, without adding extra kitchens or bathrooms. Rooms with shared facilities seem to rent for $750 to 1,000 monthly in Princeton. If you’re seriously worrying whether you can continue living in Princeton, please consider this option. We don’t want to lose you!
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