Home Repair Ordinance Introduced
by Laurie Goodman and Bhargavi Ganesh
With limited supply and skyrocketing housing costs, renters and homeowners face severe housing affordability issues. A higher share of renters face severe housing cost burdens. Over a quarter of renters, or 11.1 million households, are severely cost burdened, spending at least half their income on rental housing.
In contrast, only 10 percent of homeowners (7.6 million) are severely cost burdened. Renters’ generally lower incomes explain most of this difference. But a close look at the data makes it clear that homeownership doesn’t protect low-income homeowners from the same cost burdens as low-income renters.
Lower incomes make renters more cost burdened than homeowners
Homeowners are less likely to have extremely low or very low income. Eight percent of homeowners have extremely low income (30 percent or less of area median income, or AMI), and 7 percent have very low income (31 to 50 percent of AMI). Twenty-six and 15 percent of renters, on the other hand, have extremely low income or very low income, respectively.
Homeowners are also more likely to be wealthy. Forty-five percent of homeowners are in the highest income group (over 120 percent of AMI), compared with 18 percent of renters.
For both renters and homeowners, the severely cost burdened are generally in the lowest income categories. Ninety-two percent of cost-burdened renters and 72 percent of cost-burdened homeowners are from the extremely low–income or the very low–income groups.
When incomes are equally low, renters and homeowners have similar rates of severe cost burden
When controlling for income, a similar proportion of low-income homeowners and renters are severely cost burdened. Extremely low–income and very low–income homeowners are just as vulnerable to severe housing cost burdens as renters at the same income level.
In the extremely low–AMI group, 66 percent of homeowners and 70 percent of renters are severely cost burdened. And in the very low–AMI group, 30 percent of homeowners and 34 percent of renters are severely cost burdened. Although renters may face greater instability than homeowners, housing presents both groups with difficulties in meeting nonhousing needs.
Extremely low–income and very low–income homeowners tend to be elderly
Although low-income homeowners and renters have similar rates of severe cost burden, the composition of these households differs significantly. Poor, severely burdened homeowners tend to be elderly, while severely burdened renters tend to have young families.
In the lowest AMI group, 37 percent have an elderly household head, and 57 percent have a child in their household. But cost-burdened homeowners are approximately twice as likely as cost-burdened renters to be elderly (54 versus 27 percent), and renters are more likely to have at least one child under age 18 than homeowners (68 versus 38 percent).
The same pattern holds true for the low-income category overall. Severely cost-burdened homeowners are more likely to be elderly and less likely to have children in the home than their renter counterparts.
When incomes are low or very low, renters and homeowners have different rates of moderate cost burden
The figure below shows that for extremely low–income households, a similar share of homeowners and renters face a moderate cost burden (spending 30 to 49 percent of their income on housing). But the benefits of homeownership kick in at the very low–income and low-income levels, where fewer households spend 30 to 49 percent of their income on housing.
Many low-income homeowners, especially low-income elderly homeowners, do not have a mortgage. For extremely low–income borrowers, the burden of property taxes, maintenance, utilities, and homeowners’ insurance overwhelm income, whereas those costs are less overwhelming on a slightly higher budget. Cost burdens equalize again between owners and renters at higher income levels (albeit at much lower burden levels), likely because some higher income owners are carrying a sizeable mortgage relative to income.
Although renters shoulder the bulk of the severe housing cost burdens, our data show that low-income homeowners, a predominantly elderly group, struggle as well.
Higher cost burdens for elderly homeowners reflect their lower incomes following retirement. But we need to understand more about this group and what kind of impact this severe cost burden has on low-income, elderly homeowners. How does this decline in the portion of their income available for non-housing uses impact their quality of life? Can they still buy food and necessary medication, pay utility bills, maintain their home, and pay for transportation?
As populations of low-income renters and homeowners differ, the policy solutions for these challenges will likely differ as well.
On May 17, Mayor Kenney, City Council President Darrell L. Clarke, City Councilwoman Cherelle Parker, and Philadelphia Housing Development Corporation (PHDC) celebrated the first of many residents receiving services because of the $100 million in bond funds issued by City Council. These funds are designated to eliminate the current waiting list for the City’s home preservation programs. In December of 2016 Philadelphia’s City Council approved the issuance of $100 million in bond funds. These funds will help eliminate the waiting lists Bond Issuance Reduces Resident Waitlist for PHDC Housing Preservation Services of PHDC’s Basic Systems Repair Program (BSRP), Adaptive Modifications Program (AMP), and Weatherization Assistance Program (WAP). The waiting lists for these programs are currently 3-4 years, with over 7,000 Philadelphians waiting for services and repairs. City officials and affordable housing advocates spoke outside the home of Hagar Redmond, who was receiving plumbing and insulation repairs more than three years after being approved for BSRP assistance.“These programs are very important to our most vulnerable neighbors,” Mayor Kenney said. “These funds help repair roofs, fix heaters, replace sewer pipes, and enable other repairs that not only help a homeowner’s quality of living, but help keep them in their homes by providing these much needed repairs that may be prohibitively expensive otherwise.”
“Since January, PHDC has been hiring and training additional staff and partnering with additional contractors to develop an effective strategy to administer these additional funds to the existing waiting list,” said Fred Purnell, Deputy Director for Housing and Community Development. “We are excited to be here today to serve this resident, and look forward to serving many Philadelphians in significantly less time.”“Housing preservation assistance is a costefficient and highly effective way to create jobs, prevent homelessness and displacement, and stabilize neighborhoods at risk for decline,” Council President Clarke said. “With the help of committed partners in the Administration and the affordable housing advocacy community, Philadelphia can be an example to other cities of managing growth in an equitable way. Homes are not islands; we should all care about our neighbors and about making sure every Philadelphian is able to live in a community of choice.” “As a longtime advocate for housing preservation, I am pleased to have one of the first homes impacted by these additional funds be in the 9th District,” said City Councilwoman Cherelle Parker. “Residents in this district, and across the City, have been waiting for services, but funding has been very limited. These additional funds give PHDC the ability to positively impact so many homeowners across our great city! I am glad to be a part of that today.”The Division of Housing and Community Development (DHCD), Philadelphia Redevelopment Authority (PRA), and Philadelphia City Councilwoman Jannie Blackwell joined community members, public officials, and community partners to celebrated the completion of Phase II renovations for Mt. Vernon Manor on April 19, 2017. Mt. Vernon Manor II is located in the Mantua section of Philadelphia at 34th and Wallace Streets. Mt. Vernon Manor II is 46 affordable apartments. The mission of the project is to preserve affordable housing options in the rapidly changing Mantua neighborhood.“Mt. Vernon Manor is the type of investment the 3rd District needs,” said Councilwoman Jannie Blackwell. “I support this project because it gives the community access to quality affordable housing. I know how hard people are working to support their families, and they deserve to live in a decent neighborhood that they can call home.” “The former design and operations of the apartment buildings were a deterrent to the community,” said Michael Thorpe, Chairman of the Mt Vernon Manor Board. “This project encourages businesses, homeowners, and Sustaining Affordable Housing in Mantua section of Philadelphia.” BSRP provides free repairs to roofs, electrical, plumbing and heating systems for owner-occupied homes in Philadelphia. AMP is designed to help Philadelphians with permanent physical disabilities remain in their homes. WAP provides free weatherization and energy-efficiency improvements to owner-occupied houses and tenant-occupied rental units located in the City of Philadelphia. Each program has income requirements and other criteria for participation.
Philadelphia has a persistent childhood lead poisoning problem. In December 2016, Mayor Jim Kenney released a plan called “Lead Free Kids” to improve the city’s efforts to prevent lead poisoning. Along with this plan, the Mayor convened a Childhood Lead Poisoning Prevention Advisory Group. A coalition with representatives from city and state government, healthcare providers, landlord organizations, advocacy groups and other stakeholders, the Advisory Group worked to craft final recommendations to help guide the city’s ongoing work to address the problem of childhood lead poisoning.
To expand upon the city’s current plans, the Group offers three recommendations for primary prevention: to expand the Lead Paint Disclosure Law to all rental units built before 1978, increase funding for landlords to remediate properties if they show financial hardship, and explore a pilot program for proactive housing inspections in high-risk areas. For secondary prevention, the group recommends seeking state cooperation to submit a Medicaid waiver to increase funding for home remediation (along with maximizing billing of Medicaid under current rules) and monitoring research on lead exposure to modify PDPH protocols as appropriate.
Lead poisoning is a serious problem for many Philadelphia children. With Mayor Keeney’s “Lead-Free Kids” plan and the recommendations from the Advisory Group, the City hopes to reduce the number of children with blood lead levels greater than or equal to 5 μg/dL by 40% from 2,106 children in 2011 to 1,200 children in 2020.
Healthy Rowhouse Project is pleased to share news of a major step forward in helping Philadelphia homeowners. On May 18, City Council President Darrell Clarke and Councilwoman Cherelle Parker announced that long-awaited $60 million funding for homeowners in need of home repair grants is set for distribution. Mayor Jim Kenney, Deputy Director for Housing Fred Purnell and affordable housing advocates joined Clarke and Parker to make the announcement.
The funding is the result of a $100 million bond issue financed by a 2016 increase in the real estate transfer tax. Clarke proposed that the revenue raised from the modest increase should go toward funding three Philadelphia Housing Development Corporation (PHDC) programs: The Basic Systems Repair Program (BSRP), Adaptive Modifications Program (AMP), and Weatherization Assistance Program (WAP). The other $40 million is slated to be part of a loan program for families in need of health-related home repair who need access to home improvement loans rather than grants to repair their homes. These programs are designed to assist homeowners who need help paying for much-needed repairs on aging buildings, such as leaky roofs, mold infestation, faulty plumbing and structural damage. Like Healthy Rowhouse Project, this initiative is designed to improve conditions in rowhouses occupied by homeowners and renters with a specific emphasis on homes where disrepair is adversely affecting the occupants’ health.
Seventy percent of homeowners in Philadelphia reside in rowhouses, and most of these buildings date back to the 1950s and earlier. Many residents of these houses are senior citizens, and many have limited incomes. Rowhouses that have received substandard maintenance and are in poor repair pose health risks due to mold, water infiltration, crumbling structures, and poor insulation. Lower and middle-income homeowners have been waiting for up to five years for grant assistance from the city. Providing such assistance helps homeowners and stay in their homes and their communities—and helps neighborhoods resist the forces of both gentrification and decay.