Affordable Housing: When?
By Jones William and D.S. Mitchell
Struggling Families
HUD is one of the most important departments of the federal government. A primary function of HUD is to provide subsidized housing for the nation’s poorest citizens. One-in-four poor Americans receive a housing subsidy. Through rent subsidies HUD turns “un-affordable housing” into “affordable housing”. Most people receiving housing subsidies are the elderly and/or disabled. Without government help low-income people are in danger of eviction, and homelessness.
Affordable Housing Under Ben Carson
HUD Secretary Ben Carson will through budget requests and accompanying legislation, increase rent burdens for everyone in HUD subsidized housing. The timing for this action is difficult to understand. “As homelessness increases and affordable housing and the housing crisis intensifies in communities across the country, the administration is focusing its efforts on increasing rents and other burdens for the lowest income and most vulnerable households,” said Diane Yentel, president & CEO NLIHC (National Low Income Housing Coalition) in a Feb. 5, 2018 editorial.
An Uncomfortable bed
Affordable housing in America has become both a social and economic crisis, with those on the lower socio-economic strata being forced to bear the brunt of the suffering. The most recent estimate of homelessness in the United States is 553, 000. That’s about the size of Milwaukee, Wisconsin.
Location, Location
Cities such as New York, Seattle, and San Francisco have higher than average living costs. In Seattle the minimum wage is $13.00 per hour. Despite such a high minimum wage it would still require $26.00 per hour just to keep up a modest one bedroom apartment under the 30% established affordable housing threshold.
The New Minimum Wage
An American worker must earn no less than $20.30 per hour to afford even a modest two bedroom apartment and not pay more than 30% of his income on rent and utilities. Take note, that is triple the federal minimum wage. It means the worker earning the current minimum wage “would need to work 16 hours a day, every day of the year to be able to afford a basic two bedroom apartment. If someone is sleeping eight hours a night, they would only have time to work or sleep-and that would be it” says Andrew Aurand, V-P for research at the National Low Income Housing Coalition which is responsible for the study. This may be just one of the reasons that Bernie Sanders found such a devoted coalition among voters old and young.
Homelessness Amidst Bounty
Often to make a rental affordable people cope by doubling up. Multiple people will share a small space; or multiple families will cram into a unit far too small for their numbers. When given no other choice, people will pay market value for an apartment unit and then skimp in other areas of their lives, such as food and medical care. For a country as wealthy as the United States we have an unacceptably high number of homeless citizens. And just as significant is the large number of people living on the financial edge.
At the Bottom
There is no community anywhere in the U. S. that has enough housing for people at the bottom of the income scale. Today, there is a deficit of 7.2 million rental homes for the very lowest-income Americans. “If you’re spending more than about a third of your income on rent that’s considered to be unaffordable,” said KERA News reporter Gus Contreras in an August 2017 radio interview.
Diane Yentel
Diane Yentel, the National Low-Income Housing Coalition (NLIHC) President says that “With a shortage of 7.2 million homes, there’s no way solving the crisis doesn’t involve addressing the funding crisis.” She goes on to say that, “State and local governments can’t make up the role the federal government needs to play.” We will need at least 7 million more homes just to meet affordable housing needs for those people at the bottom of the income pyramid.
Struggling to Stay Afloat
Some of the problem is at least several decades in the making. During the Great Recession (2009-2015) many Americans lost their homes to bank foreclosure. These previous homeowners were suddenly catapulted into the rental market creating extra pressure on affordable housing. Affordable housing is not a problem limited to the poor. “The demand for rental housing is at its highest level since the 1960’s and rents are rising at their fastest pace in three decades, even the middle class is feeling the squeeze in high growth cities” Laurent Belsie said in a May 2017 article for The Science Christian Monitor.
Stagnant Wages
Home ownership has declined sharply, down to 63.4% in 2016. This is the lowest rate of home ownership since 1967. The stringent criteria banks use for lending purposes effectively bars lower-income people from home ownership. As a result, many who once would have bought a house are forced into the rental market.
Home Owners Struggle
Wages are stagnate and property values have continued to rise. One in four renters struggle to make their monthly rent payment. Statistics show that 40% of homeowners are struggling with mortgage payments making foreclosure a looming potential. Housing researcher, Stockton Williams said recently, “The data is overwhelmingly conclusive that for many, many people in the middle, housing costs are an increasing and unsustainable burden.”
Basic Right
First, it is important to embrace an idea. In July of 2014, Robert Samuels’ writing for the Washington Post published a piece entitled “Possible solutions to the affordable housing crisis.” In conclusion he stated, “Having a decent, safe, and affordable home should be a fundamental right for all.”
It Will Require a Partnership
“There is no silver bullet,” says Kristin Siglin, Sr Vice-President of policy at the Housing Partnership Network. But working together, cities, states and nonprofits are coming up with creative changes to solve the affordable housing shortage. Some projects are small-scale and others more sizable but what is clear is that there is no one-fits-all solution. Inclusionary zoning, removing parking minimums, changing building codes, to make rehab of older buildings easier, embracing non-conforming grandfathered units and granny units, are small progressive steps to create millions of new apartment units.
Housing Production Trust Funds Require Investment
Simply put, the way to build affordable housing is to direct more money for the building of affordable housing. Seems a simple construct, however it has to be included in public policy. A new funding method is Housing Production Trust Funds. HPTF’s help developers finance new buildings that include units for low-income and working class residents.
Survey Public Land
Communities across the country have pulled out the plat maps and are scouring public lands for sites to build new affordable housing units. Developers are convincing communities to re-imagine vacant spaces. Converting fire stations, old warehouses, vacant factories, dilapidated apartments has become a central method in creating affordable housing.
Have Employers Pick Up The Slack
Activists are calling for employers to offer housing assistance to those who want to stay in an area. There have been suggestions that state government might be able to encourage businesses by offering tax incentives to those who vow to help their staff stay within the community.
Embrace “Granny Flats”
ADU’s (Accessory Dwelling Units) or “Granny Flats” are stand alone units on residential lots, shared with another residential structure. Many regulations and restrictions are in place in communities nationwide that limit use of such buildings to household staff, and senior family members. Civic leaders are responding to housing experts that want government to relax regulations on “Granny Flats” so that such units can be rented to low-income tenants.
Invest in Home Ownership
Investments made to make sure existing home owners don’t face foreclosure is another way to go. Expert sponsors such as American Home Preservation Fund is a group that allows each investor to invest in the fund. The AHPF mission is to buy pools of non-performing mortgages at discounted rates. The firm utilizes investor money to buy these discounted mortgage pools. Once the AHPF have control of the note, they then partner with homeowners to find lasting payment solutions that will make sure they keep their houses, and investors make profits from the payments.
Time is Now
In conclusion, every single person deserves a place to live. Having a decent, safe, and affordable home is a fundamental right for every person on the planet, not just for the privileged few. A future where affordability is a primary concern, if not for ourselves and neighbors, then for the economy and for the coming generations. Let’s face it, there’s no better time to act than now.
Sources:
Patrick Sisson http://www.curbed.com 7/25/17 “Creative Affordable Housing Solutions”
Ben Schiller http://www.fastcompany.com “Ways To Make Housing More Affordable”
Laurent Belsie Christian Science Monitor 5/31/2016 “The Private Sector Might Be The Only Solution To The Affordable Housing Crunch”
Diane Yentel http://www.nlihc.org/ “HUD Plans To Increase Rents” 2/5/2018
Gus Contreras http://www.kera.org/listen 8/7/2018
http://endhomelessness.org “State of Homelessness in America”
Ellie Anzilotti http://www.fastcompany.com “Radical Real Estate Ideas To Fix Our Broken Housing System
Robert Samuels https://www.washingtonpost.com 7/02/2014 “Six Possible Solutions To The Affordable Housing Crisis”
