Microfinancing Affordable Housing
January 27th, 2010
I have this idea. It may or not be original, and it may or may not even be viable, but I have it, so here it is.
I want to apply the principles of microcredit to the problem of affordable housing, which is a significant issue here in Guelph, and make loans available for people to convert their basements or attics or other spaces into legal apartments that would be set aside to be affordable housing. The loans would have no fixed repayment term, but the owner of the house would agree to rent the apartment at rates within affordable housing allowances and would also agree to have the full amount of this rent be applied to repay the loan until the full loan plus an additional amount, perhaps ten or fifteen percent, has been repaid. This money could then be used to finance future projects.
There would also be an expectation that the owner of the house would not just provide an apartment for those in need of affordable housing but would also provide community and social support to those who are renting, in whatever form this might need to take, whether helping new immigrants negotiate the governmental and legal system, or driving the physically disabled to their medical appointments, or visiting with the elderly, or providing childcare for a single parent, or whatever. Ideally, the owners and renters would even eat together regularly and share some of the tasks of the house.
The loans would probably be provided by a non-profit group like a church or like Habitat for Humanity, but it might also be possible to do this through private means.
I see the following benefits of this approach:
1. It provides affordable housing outside of government housing projects that, even in the best cases, turn into ghettos.
2. It provides people who are at financial risk with both a place to live and also the beginnings of a community and a social support network.
3. It encourages more efficient use of existing housing rather than requiring the construction of new housing.
4. It encourages communal and relational rather than governmental and institutional solutions to social problems.
5. It encourages mixed income neighbourhoods, which reduces overall crime rates.
6. It forces people to encounter and relate meaningfully to others who are not in their existing social circles.
There are probably other benefits that I am missing here, and I am probably willfully overlooking the potential difficulties, but I am interested to hear what others think about this proposal. It is exactly the kind of intervention that I think needs most to be made in the world, but I am not sure whether it is one that will appeal to anyone else. Any thoughts or comments that you might have would be appreciated.
4 Responses to “Microfinancing Affordable Housing”
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From Word to Word by Jeremy Luke Hill is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Canada License.
January 27th, 2010 at 11:54 pm
This seems like it would be wide open to abuse by slumlords who use the money to remodel their homes and then rent out horrible basement rooms. Or, also likely is using the loan to fix up a rentable apartment in one’s house, then raise rent once the loan is paid back and the contractual agreement to rent cheaply ends.
In my experience it is not possible to have a meaningful relationship with one’s landlord, because even if they are nice, they still have the power to evict you if you don’t pay rent. Everything is cast in the light of that structural power imbalance. Same with meaningful relationships with a boss. Even if they are nice, they can still fire you.
I think a more empowering thing that has happened on a wide level before (notably in Italy in the late 70’s or Manhattan in the 80’s) is squatting. While the image of squatting most people have is dirty punks or drug addicts living in houses that are falling apart, a push for more general squatting of empty homes – and the defense of those squats from the inevitable tangle with law enforcement – puts the agency in the hands of those who need housing, rather than in the hands of landlords, whose interests are served by higher rents and so on.
Then again, there is probably no solution to the housing question as long as society remains the way that it is.
January 28th, 2010 at 12:37 am
I think this does sound like a good idea for a church, especially something like Latter-Day Saints, who believe very strongly in taking care of their own, but also have a very robust infrastructure.
Also, an evangelical church like LDS (mormons) which strongly pushes regular attendance will also avoid the drawback of the feeling of a stranger in the home. It would be somebody that you see in church every Sunday (especially as they’d require regular Sunday attendance to continue placement in such a program).
I think there are several places your idea falls down as a government run program, but I don’t think it’s something the government would pursue anyway so that doesn’t really matter (too many restrictions on the landlord, IMO for them to be interested).
January 28th, 2010 at 11:39 am
d,
I am also interested in the idea of squatting (there was one down by the river here in Guelph that has since been turned into condos), and think you have some valid points about how such a program would get abused. Perhaps the answer is to have these kinds of funds be offered within an existing community of people who are committed to the vision for the project in the first place.
Lucy,
I agree, especially in light of d’s comment, that this kind of project would work best in an existing community, like a church, that would be committed to it for ethical/ideological purposes. I especially agree that it should not be a good government project, since this would be the surest way to remove any relational emphasis from it as quickly as possible.
January 28th, 2010 at 4:12 pm
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