More Than 50 Ideas, Policies, Proposals, Suggestions And Radical Notions To Fight The Affordable Housing Crisis
The affordable housing crisis is at a fevered pitch. Nearly half of all U.S. renters are cost-burdened, paying more than 30% of after-tax income on housing and thus may have difficulty affording food, clothing, transportation and medical care. The Department of Housing and Urban Development estimates that 12 million households (renting and owning) pay more than 50% of their take-home income on housing each year.
What to do? There are a lot of ideas. Bisnow dug through the great mass of plans, hopes and dreams of government entities, the affordable housing industry, nonprofits, think tanks and observers to show the scale of what is being attempted or considered. The list isn't definitive; with a subject as complicated and thorny as this, there could be many more. Some are merely ideas, others newly enacted policies or rising private initiatives that aren't really tested yet.
Some ideas, perhaps many, might seem wrongheaded or ill-advised. Others, unexpectedly brilliant. Inclusion on this list is not an endorsement by Bisnow.
NATIONAL POLICIES
Though most development and zoning decisions are local, action by the federal government has historically been important in the affordable housing sphere. There is no shortage of ideas about what the U.S. government should do to promote affordable housing.
Provide more funding for HOPE VI, which was launched in 1992 to redevelop dilapidated public housing, with mixed results. For every $1 of HOPE VI funds, about $1.30 was leveraged by private sector funding, as public-private partnerships facilitate the development of mixed-income communities, according to Shelterforce. Former HUD Secretary Henry Cisneros has been a longtime advocate for the program.
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Expand the national Housing Trust Fund, as advocated for by the National Low Income Housing Coalition. These funds may be used for the production or preservation of affordable housing through acquisition, new construction, reconstruction and rehabilitation.
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Another action advocated by the NLIHC: Amend the Tax Cuts and Jobs Act of 2017 to provide incentives, or require, that some opportunity zone development be affordable housing.
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Create a National Housing Stabilization Fund, which exists in some states, to provide emergency assistance to low-income households to prevent housing instability and homelessness. The idea has been pitched by presidential candidate Jay Inslee, and would “offer temporary rental support and financial assistance to families facing economic dislocation or short-term financial challenges due to lost wages, bills for medical care, transportation, and child care.”
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Study the impact of the Violence Against Women Reauthorization Act with language to bar landlords from screening out applicants or evicting tenants on the basis that the renter has been a survivor of domestic violence, sexual assault or stalking. HUD released final rules based on the law late last year.
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Create a universal voucher program that would allow a family to live wherever they wanted, just as families can use food stamps to buy groceries virtually anywhere. Ethnographer Matthew Desmond, author of the book Evicted, advocates housing vouchers on a national level.
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Create a national housing strategy, as Canada has done. After a federal study, which sourced more than 7,000 citizens, its government pledged C$11.2B toward the policy. The main driver of creating the strategy in that country has been the government of Prime Minister Justin Trudeau.
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Act on the findings of the White House Council on Eliminating Barriers to Affordable Housing Development, which is looking at the effect of regulations at all levels on affordable housing development.
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Treat affordable housing as infrastructure, and fund as generously as spending on highways and other more traditional infrastructure. It is an idea under serious discussion in Australia. Rep. Maxine Waters of California has released draft legislation, the Housing is Infrastructure Act of 2019, that calls for major investment in public and affordable housing.
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Promote factory-built housing to drive development costs down. Fannie Mae rolled out a program in 2018 to treat some high-end manufactured homes the same as standard housing, and Freddie Mac launched a similar initiative in 2019. So far, it has been slow going, the The Wall Street Journal reports.
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Create a renters’ tax credit to help the lowest-income families afford shelter. Presidential candidates Sen. Cory Booker, Sen. Kamala Harris, and former HUD Secretary Julián Castro recently proposed the idea.
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Educate tenants and landlords about the possibilities under the federal vouchers (Section 8) program. A Seattle study showed a major increase in the number of families renting in high-opportunity neighborhoods, and in the share of landlords willing to rent to families with vouchers, CityLab reports.
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Pass the Affordable Housing Credit Improvement Act of 2019, which would expand and strengthen the housing credit, according to the Affordable Housing Tax Credit Coalition.
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Tax billionaires more, and use the money to develop affordable housing. Most recently, the idea has been espoused by presidential candidate Sen. Bernie Sanders.
STATE AND LOCAL STEPS
Federal policies aside, the struggle for affordable housing will likely be won or lost on the local level. Many ideas about what cities and states should do are percolating through the body politic.
Implement local rent control, such as the Housing Stability and Tenant Protection Act of 2019 in New York, which has ushered in a slew of new rules — many of which fundamentally alter how and when property owners can increase rents or destabilize apartments.
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Ban rent control at the state level, since some say it distorts markets and discourages the development of lower-cost housing. Many states already do so.
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Undertake further experiments in inclusionary zoning, which includes efforts in various places such as New Orleans. For city governments, the big appeal of IZ is that it often requires little or no public subsidy, but developers feel that it is anything but free, CityLab reports.
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Pass statewide rent control laws. Currently, only Oregon has done so, with the passage of a bill to limit rent increases to 7% each year, in addition to inflation. It is unclear yet whether that will help cities like Portland, where rents have been ballooning in recent years.
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Support the efforts of YIMBY — pro-development, Yes In My Back Yard — activists. YIMBY activists’ relationships with the affordable housing community vary from region to region, however, and the nature of YIMBY philosophy is being actively contested, Shelterforce reports.
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Pass legislation that makes it more difficult for homeowner associations to file construction defects lawsuits, as has been passed in Colorado. The impact on affordable housing might be indirect, since the law's goal is to promote the development of condos, which tend not to be inexpensive. Still, the law is seen as a way to increase the overall residential stock.
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End local bans on multifamily housing development by statewide action. An effort to do so was undertaken by the Connecticut Legislature in 2018, but it did not pass.
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Speed up permitting for residential construction. In some markets, permitting takes many months or years, a drag in developing housing. This is an ongoing goal in various places. For instance, this year the San Diego County Board of Supervisors directed the chief administrative officer to find ways to streamline the building permitting process.
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Allow residents to earn bonus equity every month they pay rent, up to $10K over the course of 10 years, which can then be used to pay for a down payment on a studio or home, as a program in Cleveland does.
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Freeze rent increases for the next five years, as Berlin has done. The move came this year in response to a near doubling of rents in the German capital in recent years.
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Support the legalization and development of accessory dwelling units, also known as granny flats. They are banned in some states, but others are working to bring them back; California passed laws in 2017 to make ADU development more achievable.
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End single-family zoning, as Minneapolis has done. No neighborhood in the entire city is allowed to have an exclusively single-family housing stock anymore.
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Legalize and encourage the development of duplexes, triplexes, fourplexes, attached townhomes and cottage clusters, as well as mother-in-law flats. Under its major housing reform late last year, Minneapolis now allows those kinds of residential structures in every part of the city.
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Higher taxes on alcohol, cigarettes, gambling and (where legal) cannabis to fund affordable housing programs. In Colorado, legislators even proposed a tax on plastic bags to help pay for affordable housing.
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Remove highways close to urban cores, such as Interstate 345 in Dallas, to create new zones of opportunity that include mixed-income and affordable housing development.
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Create revolving Affordable Housing Loan Funds, as the city of Denver did, to make loans for affordable housing development.
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Cap property tax increases for apartment buildings that include low-income housing in a portion of the building.
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Allow and promote tiny houses, residential properties of 200 SF or so.
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Follow Salt Lake City's Housing First approach, which finds homes for the chronically homeless without applying other stipulations or requirements like passing drug tests.
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Create tax increment financing districts specifically to promote affordable housing.
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Remove parking minimums for new multifamily developments, which would encourage more densely packed, urban residential development. Author Donald Shoup argues that parking requirements — and free parking in general — have had deleterious effects on cities, including driving up the cost of development.
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Increase the deed recording and transfer taxes on commercial properties, as has happened in some places, and use the revenue to fund affordable housing.
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Include co-living as a use in zoning codes, as San Jose, California, has done.
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Ban no-cause evictions from apartments, as Oregon has done.
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Use tax-delinquent abandoned houses as affordable housing.
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Encourage the development of residential hotels, or single-occupancy hotels. Ban the conversion of such properties into more expensive apartment or condo developments. Under the right circumstances, privately owned SROs can form part of the housing stock for people who would otherwise be homeless.
PRIVATE INITIATIVES
Affordable housing reform is going nowhere without input from the private sector. Here are ideas from the non-public sector.
Acquire market-rate properties, using subsidies to return them to affordable-housing status through a workforce housing fund specifically for that purpose.
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Follow the lead of JP Morgan's AdvancingCities, a $500M initiative to help support communities in need of economic growth, up to $250M of which will be low-cost, long-term capital.
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Expand the affordable housing portfolios of nonprofits as much as possible, such as The Habitat Co. expanding in states like Minnesota, Michigan and Illinois.
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More modular construction, which has the potential to bring down construction costs for apartments, though further efficiencies and technological improvements are needed.
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Allow and support development of affordable housing by community colleges.
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Follow the lead of Google, which will repurpose at least $750M of its land as housing for middle- and low-income residents.
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Undertake more efforts like the Capital Region Housing Challenge, designed to spur the D.C. region's public and private sectors to each add $500M in affordable housing investments above their current baseline by the end of 2020.
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Have REITs develop more manufactured housing, as Hoya Capital Real Estate has proposed. The process is less expensive because of lower construction costs.
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Use 3D printing to create inexpensive housing quickly. In some cases, an entire community has been made rapidly by using the process.
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Design competitions to build better Accessory Dwelling Units, as Montana State University has done.
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Build more Quonset huts for affordable housing. They aren't very expensive, they are easy to build, and they might just catch on with hipsters tired of urban life.
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Encourage access to homeownership through mortgage products that account for income from extended family members in calculating debt-to-income ratios during the underwriting process.
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Build affordable housing that looks like it belongs in Star Wars, as Kanye West intends to do.
BAN, ABOLISH AND REMOVE: ALTERNATIVE IDEAS
For some thinkers, the current system is the problem, and nothing less than radical reform, or perhaps reviving practices of the past, will do.
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Abolish zoning, or at least make it a shadow of its current state. Proponents say zoning impedes development and constricts new supply. That may sound radical, but there is a major U.S. city without zoning — Houston.
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Abolish HUD. Think tanks such as the Cato Institute have been beating that drum for years now, asserting that the agency is a prime distorter of the U.S. housing market.
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Remove all barriers to entry in the housing markets, so that supply will rise and prices will fall. These barriers include fees, taxes and permits, which libertarians for decades have said grant too much discretionary authority to local officials.
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No more "creative" taxes to fund housing, such as Seattle's "head tax" on large employers, which lasted only a month. The business community, led by Amazon, spearheaded efforts to reverse the tax.
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Ban inclusionary zoning at the state level, which similarly is said to discourage development of housing. Miami in 2018 passed an ordinance — the first of its kind in the city — mandating the inclusion of affordable housing in new developments. This year, asserting that such measures would be counterproductive, the state of Florida outlawed its municipalities from passing mandatory inclusionary zoning ordinances.
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Encourage, through changes in the law, the creation of boarding houses, as were common in the late 19th and early 20th centuries.
