Harmony Communities, Inc.

Harmony Blog

December 6, 2018
Affordable Housing in California
 

Harmony Communities President Matt Davies believes that everyone deserves a safe and affordable place to call home.
 

In California, the need for affordable housing options is staggering. According to one study from the California Department of Housing and Community Development, in a population of families making 50 percent or less of an area’s median income, there is a need for 1.5 million housing units. And in every major metropolitan area and its surrounding counties, between 30 and 60 percent of residents cannot afford market rent.


“Someone making minimum wage,” Davies explains, “would have to work over 90 hours a week to afford an average one-bedroom apartment in Los Angeles County.”
 

In a recent interview, Davies explained the landscape of affordable housing needs in the State, as well as the solutions Harmony Communities is working to implement.
 

Who needs affordable housing?
 

So many people are in need of affordable housing. Underpaid public servants like teachers, police and firefighters often need affordable housing close to where they work. People who work in the service industry, like daycare providers, baristas, custodians, restaurant workers, and people in retail jobs all need affordable housing close to large cities.
 

In California, we have a large number of immigrants who work multiple jobs and use cash for many transactions, which can make a traditional home purchase a challenge. Finally, the elderly are a huge subset of the population that desperately need affordable housing because they have fixed incomes with no room for uncertainty around housing costs.
 

What solutions are available for the lack of affordable housing?
 

Rent control is often touted as the best solution, but it’s a double-edged sword. For someone who can get into a unit with rent control, it’s great. But from the perspective of an owner, landlord, or future resident, it’s a problem. Rent control in manufactured housing communities is inherently flawed.  When rents are kept below market the subsidized rent is captured by the first resident through inflated housing resale prices.  While the first resident in the door wins, all future residents are losers.  For proof, look no further than Malibu, home of million dollar manufactured housing.  These homes have an actual value of $50,000 in a non-rent controlled market but sell at the exorbitant premium because the purchase price includes discounted rent.  What do you think is more attainable for the population at large, $500 monthly rents and a million dollar home or $2,500 rents and a $50,000 home? The fact is that rent control doesn’t control the overall cost equation, it merely shifts from rents to home value.  Hardworking prospective residents without significant savings are now locked out of this important affordable housing market.
 

Manufactured housing communities single-handedly help the State meet the need for affordable housing. California used to build 200,000 new houses a year. Now, that number is down to 80,000. All the while, more people come into the State and scramble to find a place to live. So the solution, besides building more housing? Thoughtfully planned manufactured housing is essential. Mobile home parks are one of the largest forms of unsubsidized affordable housing in the State.
 

What are the challenges of maintaining high quality, affordable neighborhoods in a market like California's?
 

As we delved deeper into some of the eligible neighborhoods that were originally built in the 1950s and 60s, our team was struck by the lack of infrastructure. We’re appalled that in a prosperous nation like the United States, some places still lack dependable running water, updated electric service, and functional sewer systems. It’s heartbreaking to go into these communities of hardworking, decent people and find they do not have these basics.
 

One reason why these services have not been updated is because it’s expensive. Manufactured housing communities, in some areas, are apart from the city water and sewer system. It’s a self-funded, self-managed service. When we see that, we know that improving basic services has to be a top priority. Obviously, that kind of work requires a significant investment of funds.
 

Keeping monthly expenses attainable, especially for the elderly, is part of our mission. In most any community we take over where it looks like this population would be negatively affected, we offer a rent subsidy program out of our own pockets. It’s means-tested, subsidized rent for up to 10% of the community. There will always be some trade-off in order to create effective positive structural change. But overall, our goal remains the same: to offer great value in a great environment for all residents.
 

How do high quality, affordable homes improve the community as a whole?
 

When we create purposeful communities around high quality, affordable homes, we step in with the intention of establishing an atmosphere of care and respect for property, and by extension, individual personhood. We aim for Harmony Communities to be clean and neat, to have local ownership and governance through homeowner’s associations, and to make obvious to any onlooker that we care about our community, that people are watching, and that crime is not welcome. I think that this attitude – that people know each other and know about the neighborhood – helps increase safety and affects the greater good.
 

At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.



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November 26, 2018
Tiny House Living for Families
 

We previously interviewed Harmony President Matt Davies about why tiny homes are a good investment. The energy-efficient, attractive, and well-appointed homes are steadily increasing in popularity for their versatility and affordability. They are small enough that communities can maximize land available for affordable housing options, and their status as vehicles subjects them to flexible financing options for purchasers who may not qualify for a traditional mortgage.


But for all their benefits, tiny homes are, well, tiny. That said, are they suitable for families of three or more?

 

A recent California census reported that between 2012 and 2016, the average family size was 2.95. Accordingly, it follows that a number of the individuals living in tiny homes have families in tow. While it may seem that housing a family in less than 400 square feet is not possible, the internet is buzzing with blogs and websites lauding not only the viability, but the benefits, of raising children in tiny homes. From the popular blogs Bless this Tiny House, The Tiny Life, and Tiny House Family, to features on websites ranging from Realtor.com to CBS News, tiny house proponents aboundand some of the most vocal among them have children.
 

These families cite numerous benefits to living in tiny homes, from the obviouslike less debt and accumulation of unnecessary possessionsto more intangible benefits like increased connectedness among family members, more opportunities to spend time outside, and a chance to foster positive communication skills.
 

Based on the benefits and challenges cited by tiny house proponents, here are four ways that families of three or more can make the most out of tiny house living.
 

#1: Simplifying Possessions
 

Americans are serial accumulators of stuff. Reports indicate we consume twice as many material goods today as our parents and grandparents did fifty years ago, and as one source notes, we do this “all the while carrying, on average, nearly $15,950 in credit card debt.”
 

Tiny houses are affordable options for families with children, not just because of the flexible financing options and feasibility of mortgage-free living, but also because they naturally shut down reckless accumulation – largely out of necessity. As one tiny home blogger writes, living with less has afforded her family more freedom from material excess: “We call it family-style minimalism. Removing excess space between us, clutter, and unnecessary projects…leaves room for an abundance of everything good.”
 

#2: Designing Special Spaces
 

Tiny homes waste no space, but they are still attractive. Many time homes sport ample windows, nooks, and second floors or lofts, like a comfortable reading corner designed for kids to play, do homework, or simply feel as though they have a refuge. Carving out special spaces in tiny homes can afford everyone some personal space, but also give the house elements that make it feel like home, not just a hyper-efficient living situation.
 

#3: Seizing the Opportunity to Get Outside
 

With a smaller living space, getting outside is a necessity, especially in a generation in which we are increasingly driven inside to our TVs, computers, and phones. Spending time in nature has numerous health benefits, including improving short term memory, reducing stress, eliminating fatigue, fighting anxiety and depression, and lowering blood pressure.
 

One of the benefits of tiny homes is that they can be parked almost anywhere that mobile homes are allowed, and for many families, this means being in the woods, near water, or even on a piece of property with homes owned by the same landlord. As such, tiny home families can take advantage of the opportunity to reap the various physical and mental benefits of spending time outside.
 

#4: Spending More Time on Family Activities
 

Residents of tiny homes can capitalize on the reduced time spent on household chores to enjoy fun activities as a family, from homeschooling the children to taking the kids outside on nature walks. Particularly for families with two working parents or parents who work multiple jobs, having less burdensome household tasks to manage means more time for fun and enriching family activities.

At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.


 

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November 1, 2018

What is a Tiny Home?

Part 1 in the Q & A with Matt Davies series

 

Matt Davies, president of Harmony Communities, has made it his mission to create attractive and affordable manufactured home communities in California and Oregon. At the top of his priorities is reconsidering the most elemental aspect of a planned manufactured housing community: the homes.

 

Davies imagines Harmony Communities consisting of well-tended, appealing, and modern tiny homes. More than just a trend, Davies sees tiny homes as both an affordable and functional solution to California’s housing crisis. Davies explains why he feels tiny homes are worth his ongoing investment of time and money at Harmony Communities.

 

What is a tiny home?

A tiny home is between 100-400 sq ft, and built no more than 14 feet wide, 10.5 feet high, and 40 feet long. Most of ours are in the 400 sq ft range. They are the property of the homeowner, who leases the land from us.

 

Why are tiny homes an ideal investment in a manufactured housing community?

A tiny house is a fantastic investment. They are constructed of quality materials, contain updated fixtures, and are energy efficient. Every architectural element is evaluated for its functionality and no space is wasted. They can vary in price, but generally the cost is under $60,000. There is no need for a building permit, because they are classified as a type of vehicle. And because they are not considered a real estate purchase, a tiny home offers flexibility in financing. These options can literally open the door of homeownership to people who have not been able to purchase, or even rent, a home in the current market.

What exactly is Harmony Communities doing with tiny houses?

We are so excited to partner with our residents to create neighborhoods that look like, well, neighborhoods! Tiny houses are so attractive, with windows throughout and often a second story. Each tiny house can be a little different, just like in a typical planned housing development. We envision entire neighborhoods of tiny houses, where people can worry about living their lives and not living for a house payment. To that end, we’re aggressively updating two communities in particular: San Leandro and Stockton, both in California.

 

So what has been the response to tiny homes in these communities?

People cannot get enough of them! Seriously, we have a waiting list and cannot put them up fast enough. The first group debuted in San Leandro three months ago and were immediately occupied. The feedback on them are that our residents are, first of all, very satisfied with their purchase and happy with their new home. And second, everyone who comes to visit them wants to know how they can get one too. So you could say the response has been phenomenal.

 

What are your plans for the future?

In addition to continuing to install homes in San Leandro, we’ve just broken ground in Stockton, and we’re slated to begin construction in our southern California and Oregon communities in about four months.

 

After that, we’ll keep following where the need takes us.

 

We at Harmony Communities feel strongly that each resident in our neighborhoods has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community.

 

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October 31, 2018
 

Proposition 10:

What this November's vote means to California's affordable housing market

 

Across California, millions of voters are getting ready to decide on Proposition 10. This proposition is designed to repeal the Costa-Hawkins Rental Housing Act, legislation that prohibits local governments from enacting rent controls on certain buildings. If voters approve the proposition, it will grant local governments the authority to adopt rent control on any type of rental housing.

 

What are Costa-Hawkins and Proposition 10?

Costa-Hawkins went into effect in 1995. It allowed rent control on any unit constructed prior to that date but exempted units built after that date. Costa-Hawkins backdated rent control in cities that already had rent control on the books. It also exempted single-family residences and condominiums. The legislation was intended to limit the rent burden on low-income tenants.

 

The unforeseen consequence became that rents on newly constructed, exempted units skyrocketed while maintenance on older, less profitable units went lacking, and risk-averse tenants were unlikely to leave older units because there was too much uncertainty on what new rental agreements could contain. Apartment buildings were converted to condominiums to avoid the regulations until an amendment against this was passed in 2002. Now, Proposition 10 would repeal Costa-Hawkins entirely, giving cities the latitude to enact their own rent control laws.

 

Pros and Cons

Proponents of Proposition 10 believe it is the solution to affordable housing in California. They argue that if rent controls are placed on units regardless of age and type, then California's housing crisis would be solved, as most tenants would then easily be able to afford a place to live.

 

Others suggest that Proposition 10 will compound the problem, arguing that putting caps on rent will only drive down the rate of construction. California has a critical shortfall of 3-4 million homes. Housing estimates are that the 39 million people who live in California need between 50,000-180,000 new units per year, but only 80,000 are being built annually. Every year, the gap continues to widen as the population increases and supply cannot keep up with demand.

 

In order to propel the construction of more new, well-designed, and smart housing, opponents of Proposition 10 argue that California should provide greater incentives to developers by eliminating red tape and bottlenecks that stunt growth.

 

Increasing the available supply of housing gives Californians access to reasonably priced housing now and in the future, they contest. By de-incentivizing further development, opponents argue, the current crisis will continue, leaving renters of almost all classes scrambling to find a place to call home.

 

Regardless of where they stand on Proposition 10, the need for more affordable housing in California is a fact on which both sides can agree.

 

We at Harmony Communities feel strongly that each resident in our neighborhoods has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community.