Demand for luxury housing among New Haven’s wealthier residents has resulted in an overall hike in housing prices, which has left some members of the community concerned that high costs are making the Elm City less affordable.
Median prices for rentals and condiminiums are rising in New Haven along with salaries of New Haven residents. The number of New Haven households with an income of over $150,000 more than doubled between 1990 and 2000 to 1,182, according to data from the U.S. Census Bureau. Further Census data estimates that number to top 1,800 by 2009. The spike in housing costs comes six years after New Haven Mayor John DeStefano Jr.’s administration invested $30 million of state funds in the city’s housing stock. Since that time, 1,300 apartments and condominiums have been added to New Haven’s housing base.
The rise in prices is due in part to high redevelopment costs in the downtown area, said Mike Morand, Yale’s associate vice president for New Haven and state affairs.
“There’s a renewed interest in living downtown,” Morand said. “It’s only at certain rental prices that [the investments] make economic sense.” But some political leaders have raised concerns that high-end housing developments may negatively affect low-income citizens.
Ward 1 Alderman Rebecca Livengood ’07 said she thinks New Haven should try to maintain a balance between the two types of developments.
“There is always the concern that when tenants are willing to pay higher rents, people who can’t afford it will be driven out,” Livengood said.”I do think that ultimately mixed-income neighborhoods are the only way urban areas can work, and it’s a feeling that’s really shared by most people in New Haven.”
The development of higher-income housing is not displacing New Haven’s lower-income residents, Morand said, because most of it has taken place in vacant buildings left over from the city’s economic stagnation of the 1990s. The investment in luxury housing since then has attracted wealthier residents and increased the city’s tax revenue. Morand said flow of funds has also generated new employment opportunities for New Haven residents. Higher-end housing residents tend to consume less city resources given that few have school-age children participating in the city’s public school system, Morand said.
One-third of housing units in New Haven are government-mandated affordable, which places the city’s affordable housing rate second highest in Connecticut, and amongst highest in the nation, DeStefano aide Rob Smuts ’01 said.
“It’s flat-out false to say that the city is not doing a lot to provide affordable housing,” he said.
But David Tian ’07, a Co-Coordinator of the Yale Hunger and Homelessness Action Project, said he thinks the city could still do more to use the city’s vacant buildings for affordable housing. Affordability requires that a family pays no more than 30 percent of its income on housing costs, according to the U.S. Department of Housing and Urban Development.
But 2004 statistics from the National Low Income Housing Coalition estimate that a New Haven resident must earn an hourly wage of $17.37 at 40 hours per week to be able to afford a “modest” two-bedroom apartment in the city. The overall increase in rents could lower the possibility that New Haven’s poorer residents will find a place to live, Tian said.
“There’s a demonstrated need for subsidized housing in the city,” Tian said. “You could be on one of the Section 8 housing lists for years before you get it. If there are these vacant buildings available, then developing them specifically with the idea of creating units of affordable housing would at least meet the demand of those who need it.”
Smuts said that the city’s economic development plans do not target a particular income demographic, but instead work with private housing developers to create mixed-income housing units. He cited the recent Ninth Square residential development, where more than 30 percent of units are reserved for low-income, affordable housing. The rest of the complex, he said, is open to market-rate development, which typically attracts upper-income buyers.
“It’s absolutely critical that the city continues to be a place that is welcoming to everyone, no matter what income demographic they’re from,” Smuts said.
Last year, New Haven saw the highest property tax revenues in fifteen years. Smuts said he attributes the growth to the business of Ikea as well as commercial and residential development in downtown New Haven.