Baseball’s small ball strategy is to “get ’em on, get ’em over, get ’em home.” The premise is that to win you don’t need to swing for the fences every at-bat. Great Barrington Affordable Housing Trust Fund (GBAHTF) Board member Bill Cooke is investigating an affordable housing small ball strategy to get folks into homes. Rather than a 50-unit project, he is tossing around the idea of charming cottages of about 750 square feet, with up to eight cottages on a lot. Great Barrington should be listening closely to his pitch.
At the GBAHTF meeting on February 20, Cooke received permission to form a subcommittee to explore his concept of building quaint Oak Bluff-like cottages around town. Cooke’s point is that “if people can’t afford the houses we have, we have to build houses they can afford.” Truer words…
In a chat a few days after the meeting, Cooke explained, “[T]he plan calls for individuals to own the homes, and the Affordable Housing Trust Fund will own the land. Having the Affordable Housing Trust Fund owning the land permits us to put deed restrictions on the house. We don’t want someone just living in the house for five years and flipping it for a profit.” Right, affordable housing now, and affordable housing in the future, because it looks like we are going to cure affordable housing just after we cure cancer.
As currently envisioned, assuming you can build the cottages for about $225,000 each, GBAHTF will lend homeowners the downpayment of $15,000, and the homeowners will take out a mortgage of about $210,000 to finance the rest. To qualify for the program, homeowners may not earn more than 100 percent of Area Median Income (AMI). To qualify today, a one-person household may earn no more than $71,050, and a two-person household may earn not more than $81,200. Thus, based on current mortgage rates with insurance and taxes (which taxes would be assessed on improvements but not the land), the homeowners could expect to pay slightly more than $2,000 per month.
So, for about what it costs to rent an apartment in Great Barrington (this is hypothetical of course; let’s pretend there are apartments available to rent), the homeowners will be able to receive most of the benefits of home ownership: building equity monthly, tax deductions, and the like. “This is a way for people who would ordinarily be renting a house to own a house,” Cooke said. Not that you need to be sold on the virtue of home ownership, but Cooke suggests this as a path to wealth-building. The only thing Cooke’s plan doesn’t permit is real estate speculation. We should all be fine with that.
Cooke explained that when it is time to sell, the homeowner will “only be able sell to someone who is income qualified. Price of the home will be indexed to AMI. So if AMI goes up 5 percent, then the cost of the house will go up 5 percent. The point is that the home will always be affordable to someone that is at 100 percent of Area Median Income. [The house is] not going to double in price. [The] whole point is to make it affordable. But if you stay in the house for 30 years, you will have $210k in equity because you were paying down the mortgage. If you rent for thirty years, at the end of thirty years, you’ve got nothing. Owning a house is like an enforced savings. It’s a wealth builder. This will be a slower wealth builder.”
Let’s consider the size of the proposed cottages. In 2022, the average size of a single-family home in Massachusetts was 1,800 square feet. So, sure, the proposed cottages are smaller than the average home, but that doesn’t mean their size is unworkable. Designed efficiently, 750 square feet works. And smaller homes are easier on the environment and less expensive to maintain. A win for everyone.
Cooke remarked that most of the original homes in Levittown, the first mass-produced housing development, were 750 square feet. Interesting to note, then, that between 1947 and 1951, 17,000 homes were built in Levittown. Clearly, home size was not an impediment to thousands of happy homeowners (of course, to say that, you need to ignore Levittown’s deep racism and awful uniformity, but I digress).
I think we can all acknowledge we are in the midst of a housing crisis. In 2022, Massachusetts ranked 41st nationally in increasing its housing stock (at 5.9 new housing units per 1,000 existing units in 2022, half the national average of 11.7 new units). Going hand-in-hand, in 2022, Massachusetts ranked as the fourth most expensive state to live in due to its “housing affordability score”; a two-bedroom apartment in Massachusetts is six times more expensive than in Michigan. We need to attack the problem from every angle possible. Cute cottages could be one appealing way.
When he was President Clinton’s secretary of the treasury, Lawrence Summers was asked why it was so important for the government to promote homeownership. He said that in the history of the world, no one has ever washed a rented car. By that I think he means we are better when we are invested in our neighborhoods. And for many, homeownership remains part of the American dream, but it sure is hard to promote homeownership when a variety of macroeconomic factors have made homeownership so very difficult to obtain.
Let’s agree that Cooke is on the right track: We need to figure out a way to build houses that people can afford. Let’s agree that there is no single panacea to cure Great Barrington’s housing challenges, and we need to come at the problem from all directions. I am pulling for Cooke and the Great Barrington Affordable Housing Trust Fund, and thinking how lovely it would be if our town were fortunate enough to have Oak Bluff-like cottages here and there.
