The Need for Mixed-Income Housing

It’s no secret that US residents suffer from a worsening affordable housing crisis. The Philadelphia area is no different. According to this resource from the National Low Income Housing Coalition, “only 33 affordable and available rental homes exist for every 100 extremely low-income renter households” across the United States. The most devastating lack of affordable housing is concentrated along the West Coast and some southern states. Still, Philadelphia is barely above the US average with 38 affordable and available homes per 100 low-income renter households. The wait to access public housing in Philadelphia is disturbingly long. According to TaRhonda Thomas and Maia Rosenfeld in an article for Philadelphia’s 6ABC Action News, public housing residents who were placed “last year had waited an average of 3.4 years — more than double the national average.” Given an ever-worsening affordability and availability crisis, the need for mixed-income housing could not be clearer. Developing more mixed-income housing in Philadelphia would not only increase the number of affordable units. It would also prevent displacement that often occurs during the gentrification of previously low-income neighborhoods. Furthermore, building more mixed-income housing could create denser communities – which reduces our collective carbon footprint. Read on to learn more about how developers can help alleviate this crisis by advocating for mixed-income housing.

Must-Know Statistics About Our Affordable Housing Crisis

TaRhonda Thomas and Maia Rosenfeld write in an article for Philadelphia’s 6ABC Action News that “the average wait time for Section 8 housing vouchers…is 2.5 years across the tri-state metro area.”
According to this resource from Habitat for Humanity, “the U.S. now has a deficit of 3.8 million homes, with the greatest supply shortages at low-income price points.”
This resource from the National Low Income Housing Coalition, notes that “the U.S. has a shortage of 7.3 million rental homes affordable and available to renters with extremely low incomes.”
According to Andre M. Perry and David Harshbarger in an article for The Brookings Institute, “about half (49.8%) of today’s redlined population resides in the 10 cities with the most populous redlined areas: New York, Chicago, Los Angeles, Philadelphia, San Francisco, Boston, San Diego, Detroit, Milwaukee, and Baltimore.”
In this article for Shelterforce, Elizabeth Kneebone, Carolina Reid, and Natalie Holmes write that “of the nearly 47,000 U.S. Census tracts that make up the nation’s 100 largest metro areas, just under 5,000 met our definition of mixed-income.” This means that “just one-tenth of major-metro neighborhoods are mixed-income.”
Referencing research from The Pew Charitable Trust in a 2020 article, Larry Eichel and Octavia Howell write that “4 in 10 Philadelphia households, including 54% of renters and 28% of homeowners, are cost-burdened.”

The Need for Mixed-Income Housing

In today’s society, the need for mixed-income housing has become increasingly evident. Mixed-income housing refers to the development of neighborhoods or buildings that offer a range of affordable options for people with different income levels.

As outlined below, mixed-income housing offers a variety of benefits to both high and low-income residents. It can promote economic diversity, lift property values, improve each demographic’s upward mobility, and alleviate concentrated poverty that many areas suffer from as a consequence of redlining in the 20th century.

BENEFITS OF LIVING IN A MIXED-INCOME NEIGHBORHOOD

One of the primary goals of mixed-income housing is to help combat poverty and create economic opportunities for low-income residents. By providing affordable housing options within higher-income neighborhoods, we can break down barriers and create a more inclusive community. This not only improves the quality of life for those living in low-income households but also promotes diversity and reduces social isolation.

EDUCATIONAL OPPORTUNITIES

A prime example of the benefits of mixed-income housing can be seen through its impact on education. When children from low-income families have the opportunity to live in a neighborhood with access to high-quality schools, their chances of success greatly increase. By creating mixed-income developments that include both market-rate and affordable housing units, we can ensure that families of all income ranges have access to the same educational opportunities.

A Sense of Empathy and Community

Furthermore, mixed-income housing can also have positive effects on the overall well-being of all residents — both higher-income residents and lower-income residents. Living in a diverse community allows for increased social interaction and provides opportunities for personal growth. It encourages understanding, empathy, and a sense of belonging among neighbors from different backgrounds. This fosters a strong sense of community and creates an environment where everyone — regardless of income groups — feels valued and supported.

More Affordable Housing Options

Additionally, mixed-income housing can help address the issue of limited affordable housing options. With skyrocketing rental and housing prices, many individuals and families are being forced out of their homes or into overcrowded living conditions. They simply cannot afford market-rate housing.

By building new mixed-income projects, we can provide much-needed affordable housing while also offering a broader range of options for those who may not qualify for traditional public housing assistance.

Economic Revitalization without Gentrification

From an economic perspective, mixed-income housing can have numerous benefits as well. The presence of affordable housing in higher-income neighborhoods can increase property values and stimulate economic growth. Additionally, the development of mixed-income housing can generate jobs in construction and other related industries, further boosting the local economy.

A Limited Carbon Footprint

Investing in more mixed-income housing could also reduce our collective carbon footprint. In an article for the Rocky Mountain Institute, Zack Subin writes that “building mixed-income housing in higher-income, urban, or walkable neighborhoods is a solution for both climate and equity.” Subin notes that “around the country, examples abound of wealthy, walkable or transit-rich, lower-carbon-footprint communities that largely restrict new housing.”

Examples of lower-income or mixed-income communities with lower carbon footprints are less common. He argues that by increasing the density of high income communities, we can “expand access to opportunity [and limit gentrification] in low income urban neighborhoods.” That density and walkability will also reduce the carbon footprint of mixed-income neighborhoods.

A Brief History of Redlining

We cannot discuss the lack of mixed-income housing without touching on redlining. After all, redlining prevented the development of ethnically diverse mixed-income housing throughout the 20th century.

For those unfamiliar with the term, redlining refers to the discriminatory practice of denying or limiting financial services, such as loans and insurance, to certain neighborhoods based on their racial or ethnic composition. This practice has had a long-lasting impact on communities across the United States.

The history of redlining can be traced back to the early 20th century when the federal government began mapping out cities and categorizing neighborhoods based on their perceived risk for investment. These maps were created by various agencies and organizations, including the Home Owners’ Loan Corporation (HOLC) and the Federal Housing Administration (FHA).
These agencies used a color-coded system to designate different areas within cities. Neighborhoods deemed desirable for investment were typically marked in green, while those considered risky or undesirable were marked in red. Hence, the term “redlining” was born.

The criteria used to determine which neighborhoods would receive favorable treatment were often based on racist and discriminatory practices. Factors such as the racial makeup of an area, income levels, and property values played a significant role in determining whether a neighborhood would be redlined.

Consequences of Redlining

The consequences of redlining were devastating for minority communities. Denied access to affordable housing and loans, these neighborhoods experienced disinvestment and neglect. Banks and other financial institutions refused to provide mortgages or loans to residents living in redlined areas, making it nearly impossible for them to improve their homes or start businesses.

As a result, these communities became trapped in a cycle of poverty and limited opportunities. Today, the impacts of redlining are still felt today – all across the country and specifically in Philadelphia.

Redlining In Philadelphia

Redlining in Philadelphia refers to a discriminatory practice that took place throughout the mid-20th century – beginning in the 1930s. This practice involved denying loans and insurance to certain neighborhoods based on their racial or ethnic composition. The effects of redlining are still felt today, as it has contributed to the segregation and economic disparities seen in the city.

Research into the history of redlining in Philadelphia reveals a systematic approach used by banks and other financial institutions. They would concentrate their lending and investment activities in predominantly white neighborhoods while avoiding areas with higher concentrations of minority residents. This deliberate design perpetuated racial segregation and limited opportunities for people of color to access affordable housing and build wealth.

Contributions to Redlining by Developers and Real Estate Moguls

Developers and urban planners played a significant role in implementing this discriminatory strategy. By concentrating subsidized housing in already disadvantaged neighborhoods, they further reinforced the cycle of poverty and limited resources available to these communities. This concentration of low-income housing also meant that amenities and services were often lacking, making it difficult for residents to thrive.

In Philadelphia, real estate tycoon J.M. Brewer was one of the worst offenders. He was notorious for his racism towards Black, Jewish, and Italian residents. As Amy Cohen writes in an article for Hidden City, Brewer “rated Philadelphia neighborhoods based on the age and value of the housing stock, types of businesses, access to amenities, and, most notably, the ‘racial concentrations’ within each area.”

Referencing Brewer’s maps from the mid-1930s, Cohen explains that “areas color-coded to indicate a substantial presence of these groups were deemed high risks for investment or mortgages.” To discourage anyone from investing in mixed-race or mixed-income neighborhoods, Brewer also described “neighborhoods with mixed or transitioning populations…as perilous.”

Of course, J.M. Brewer was not the only influential Philadelphian to undermine the success, happiness, and comfort of minority residents. Policymakers, bankers, and many other movers-and-shakers in 20th century Philadelphia locked these people out of opportunities they had every right to.

Continuing Impacts of Redlining in Philadelphia

The consequences of redlining in Philadelphia are still evident today. Many neighborhoods that were once subjected to redlining continue to face challenges such as high crime rates, limited job opportunities, and inadequate infrastructure. In a resource for the Office of the Controller, Rebecca Rhynhart elaborates. She writes that “historically redlined areas of Philadelphia continue to experience disproportionate amounts of poverty, poor health outcomes, limited educational attainment, unemployment, and violent crime compared to other neighborhoods in the city.” These conditions make it harder for residents to break free from the cycle of poverty and improve their quality of life.

Fortunately, efforts have been made to address the legacy of redlining in Philadelphia. Non-profit organizations, community groups, and government agencies are working collaboratively to redevelop these neglected spaces and provide support to those who have been impacted by decades of discriminatory practices. One approach gaining traction is the development of more mixed-income housing. By intentionally incorporating a range of income levels within residential developments, we can start to heal communities still affected by the lasting effects of redlining.

Philadelphia's Affordable Housing Crisis

Redlining shaped the demographics of many neighborhoods here, but the affordable housing crisis can be felt all over Philadelphia by people of different income levels. The city of Philadelphia is currently facing an affordable housing crisis that impacts low-income residents most severely. This issue has been escalating over the years, leaving many residents struggling to find suitable and affordable places to live.Rising rent prices have become a major concern for Philadelphia residents.

As the cost of living continues to increase, many people are finding it increasingly difficult to keep up with their monthly rental payments. This puts them at risk of eviction and homelessness, further deepening the housing crisis in the city.

One of the main factors contributing to this crisis is the limited availability of affordable housing units. With a high demand and limited supply, landlords can charge exorbitant rents, taking advantage of desperate tenants who have no other options. This creates an unfair power dynamic that disproportionately affects low-income individuals and families.

Another issue plaguing Philadelphia’s affordable housing market is the lack of investment in low-income neighborhoods. Many areas with higher poverty rates and predominantly minority populations have been neglected by developers and investors. This perpetuates a cycle of disinvestment and neglect, making it even harder for these communities to access safe and affordable housing options.

Furthermore, the city’s policies regarding affordable housing have not been effective in addressing the crisis. While there are programs in place to assist low-income individuals and families, they often fall short in providing long-term solutions. As noted in the statistics segment of this article, the waitlists for these programs can be extensive

The Developer’s Role in Alleviating Our Mixed Income Housing Crisis

In recent years, there has been growing recognition of the need for mixed-income housing in our communities. This type of housing, which brings together people from different income levels, can have a profound impact on neighborhoods and individuals alike. By providing opportunities for people of varying socioeconomic backgrounds to live side by side, mixed-income housing can help break down barriers and promote social cohesion.

Developers play a crucial role in alleviating our mixed income housing crisis. They possess the expertise, resources, and influence necessary to spearhead the construction and implementation of these projects. However, it is imperative that developers approach this responsibility with a genuine commitment to creating sustainable and inclusive communities.

Financing mixed-income housing developments can be complex, but there are numerous funding opportunities available from private investors, government grants, and philanthropic organizations. By securing the necessary funds, developers can create affordable housing options while still maintaining profitability. Additionally, engaging in partnerships with local community organizations and non-profits can ensure that the needs and desires of existing residents are considered throughout the planning process.

Mixed-Income Housing Incentives in Philadelphia

Mixed-income housing and density incentives in Philadelphia aim to create diverse, inclusive, affordable, walkable communities where residents from various income levels can live together. This type of housing development not only provides affordable homes for low-income individuals and families, but it also helps to combat poverty and promote social and economic change within the neighborhood.

To increase the amount of mixed-income housing in Philadelphia, the city has passed several bills over the last few years. In “a September 2021 article for PBS’ WHYY, Aaron Moselle references one such bill which passed nearly unanimously. Moselle writes that this bill makes several changes to the Mixed-Income Housing Bonus – which has not been very successful in promoting the creation of these types of units in Philadelphia. In fact, Moselle writes that this voluntary program has “resulted in developers building fewer than two dozen affordable housing units.”

Changes made to the program by the bill that passed in 2021 prevent developers from choosing to contribute to the fund instead of building affordable housing. Now, developers “must build affordable housing on-site to earn a bonus for height or density.” To learn more about the bonus program, read this resource.

Final Thoughts on the Need for Mixed-Income Development

As outlined in great detail above, the need for mixed-income housing is clear. By creating communities that cater to individuals from all income ranges, we can promote inclusivity, reduce poverty, and create economic opportunities.

Mixed-income housing provides an affordable option for low-income residents while fostering diversity and improving overall quality of life. With its multitude of benefits, it is imperative that we continue to prioritize and invest in mixed-income housing developments in Philadelphia and across the country.

At AVLV Architecture I Development, we are committed to creating sustainable, affordable solutions for renters while ensuring profit for developers and investors. Join us in making affordable mixed-income housing a reality for more Philadelphians by becoming an investor. Learn more here.