July 13, 2015
The Housing/Income Affordability Gap
The Urban Institute has issued a policy brief, The Housing Affordability Gap for Extremely Low-Income Renters in 2013. The brief opens,
Since 2000, rents have risen while the number of renters who need low-priced housing has increased. These two pressures make finding affordable housing even tougher for very poor households in America. Nationwide, only 28 adequate and affordable units are available for every 100 renter households with incomes at or below 30 percent of the area median income. Not a single county in the United States has enough affordable housing for all its extremely low-income (ELI) renters. The number of affordable rental homes for every 100 ELI renters ranges from 7 in Osceola County, Florida, to 76 in Worcester County, Maryland.
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This brief is the first publication on housing affordability to combine detailed county-level data on ELI renter households (those with incomes at or below 30 percent of the area median) and the impact of US Department of Housing and Urban Development (HUD) rental assistance. Its four key findings:
- Supply is not keeping up with demand. Between 2000 and 2013, the number of ELI renter households increased 38 percent, from 8.2 million to 11.3 million. At the same time, the supply of adequate, affordable, and available rental homes for these households increased only 7 percent, from 3.0 million to 3.2 million.
- The gap between ELI renter households and suitable units is widening over time. From 2000 to 2013, the number of adequate, affordable, and available rental units for every 100 ELI renter households nationwide declined from 37 to 28.
- Extremely low-income renters increasingly depend on HUD programs for housing. More than 80 percent of adequate, affordable, and available homes for ELI renter households are HUD-assisted, up from 57 percent in 2000.
- The supply of adequate, affordable, and available units varies widely across the country. Among the 100 largest US counties, Suffolk County, which includes Boston, comes closest to meeting its area’s need, with 51 units per 100 ELI renter households.Denton County, part of the Dallas-Ft. Worth metropolitan area, has the largest housing gap,with only 8 units per 100 ELI renters. Rust Belt areas (e.g., Detroit, MI; Chicago,IL, and Milwaukee, WI) have seen large declines in adequate, affordable, and available units. Most counties had fewer units available in 2013 than 2000. Notable exceptions to this trend include Suffolk, MA; Los Angeles, CA; and Miami, FL, which have expanded their number of available units since 2000. (1-2, footnote omitted)
The brief concludes, “Simply put, virtually no affordable housing units would be available to ELI households absent the continued investment in federally assisted rental housing.” (14)
This is an affordable housing story, but it is just as much an income story — low-income households are getting left behind in the race between rising income and expenses. One solution is to expand housing assistance for low-income families. Another is to increase income, one way or another. The bottom line, though, is that low-income households don’t have enough to make a go of it in these United States.
July 13, 2015 | Permalink | No Comments
July 10, 2015
The Challenge of Rising Rents
NYU’s Furman Center has issued a research brief, The Challenge of Rising Rents: Exploring Whether a New Tax Benefit Could Help Keep Unsubsidized Rental Units Affordable. The brief considers whether the creation of “a new property tax subsidy program aimed at maintaining affordability in buildings that currently provide affordable rents could be attractive to owners.” (1)
The brief concludes that
The bulk of New York City’s housing stock that is affordable to low-income households is in buildings that currently receive no government subsidy to maintain low rents. In a city where the real estate market is booming and the supply of housing is constrained, the upward pressure on these rents is likely to continue. However, our analysis here suggests that there are some markets in the city where an owner of an unsubsidized building would agree to restrict future rent increases in exchange for a tax benefit.
If owners think their building is in a neighborhood likely to experience rapid rent increases, they are not likely to participate in a program like the one we have outlined. But, owners who are less optimistic about rent growth in their neighborhood may be willing to sign up in exchange for the certainty of a 30-year tax break. Owners might be more likely to participate in this program than our modeling suggests if it were bundled with another benefit or if the regulatory requirements were less onerous. (11)
This is obviously a good exercise to undertake, but I wonder if most landlords believe that their buildings are like Lake Wobegon children — above average, one and all. So, if the success of this proposal rests on reaching pessimistic landlords, it may be relying on a very small pool of landlords indeed.
July 10, 2015 | Permalink | No Comments
Friday’s Government Reports
- Federal Housing Finance Agency released its annual Guarantee Fee Report, which tracks the upward trend in single family guarantee fees charged by Fannie Mae and Freddie Mac. The Housing and Economic Recovery Act of 2008 requires FHFA to submit a report to Congress annually on guarantee fees. Guarantee fees are intended to cover the costs Fannie Mae and Freddie Mac incur for guaranteeing the payment of principal and interest on single-family loans they purchase from mortgage lenders. These costs include projected credit losses from borrower defaults over the life of the loans, administrative costs, and a return on capital.
- The U.S. Department of Housing and Urban Development in conjunction with Vanderbilt University released the Family Options Study in which presents the short-term impacts of the interventions in five domains related to family well-being: (1) housing stability, (2) family preservation, (3) adult well-being,(4) child well-being, and (5) self-sufficiency.
July 10, 2015 | Permalink | No Comments
July 9, 2015
Affirmatively Furthering Fair Housing
Fast on the heels of the recent Supreme Court decision upholding disparate impact Fair Housing claims, the Department of Housing and Urban Development has issued a final rule, Affirmatively Furthering Fair Housing:
Through this final rule, HUD provides HUD program participants with an approach to more effectively and efficiently incorporate into their planning processes the duty to affirmatively further the purposes and policies of the Fair Housing Act, which is title VIII of the Civil Rights Act of 1968. The Fair Housing Act not only prohibits discrimination but, in conjunction with other statutes, directs HUD’s program participants to take significant actions to overcome historic patterns of segregation, achieve truly balanced and integrated living patterns, promote fair housing choice, and foster inclusive communities that are free from discrimination. The approach to affirmatively furthering fair housing carried out by HUD program participants prior to this rule, which involved an analysis of impediments to fair housing choice and a certification that the program participant will affirmatively further fair housing, has not been as effective as originally envisioned. This rule refines the prior approach by replacing the analysis of impediments with a fair housing assessment that should better inform program participants’ planning processes with a view toward better aiding HUD program participants to fulfill this statutory obligation.
Through this rule, HUD commits to provide states, local governments, public housing agencies (PHAs), the communities they serve, and the general public, to the fullest extent possible,with local and regional data on integrated and segregated living patterns, racially or ethnically concentrated areas of poverty, the location of certain publicly supported housing, access to opportunity afforded by key community assets, and disproportionate housing needs based on classes protected by the Fair Housing Act. Through the availability of such data and available local data and knowledge, the approach provided by this rule is intended to make program participants better able to evaluate their present environment to assess fair housing issues such as segregation, conditions that restrict fair housing choice, and disparities in access to housing and opportunity, identify the factors that primarily contribute to the creation or perpetuation of fair housing issues, and establish fair housing priorities and goals. (1-2)
The tenacious hold that segregation has had over so many communities has been so difficult to address and HUD’s past attempts to do so have come up short so often. One can hope that this change in strategy from an “analysis of impediments” to “a fair housing assessment” can make incremental improvements throughout the nation.
It will be up to the next administration to really implement this rule because at first the rule just requires more planning about fair housing on the part of local communities. It is only later, when HUD evaluates their success and decides whether there will be any consequences for failure, that the rule’s effectiveness can be identified.
July 9, 2015 | Permalink | No Comments
Thursday’s Advocacy & Think Tank Round-Up
- Corelogic’s Home Price Index for May 2015, reports that home prices are up 6.3% compared to May of 2014 and with Mortgage rates at around 4% – leading to increased demand – areas with high demand and low supply, such as San Francisco are seeing double digit appreciation. Home prices peaked in April 2006 and are still 8.4% below peak.
- Over 1,000 members of Affordable Rental Housing A.C.T.I.O.N. signed a letter to Congress urging both houses to protect, strengthen and expand the Housing Credit and preserve Housing Bonds as it considers tax reform and tax extenders legislation. Specifically, the letter urges Congress to act quickly to approve a minimum 9 percent Housing Credit rate for new construction and substantial rehabilitation, as well as a minimum 4 percent rate for the acquisition of affordable housing.
- Furman Center’s Data Search Tool – is an online application that provides direct access to New York City data compiled by the NYU Furman Center. Visitors to the site can select from a range of variables to create customized maps, downloadable tables, and track trends over time. Variables include, among many others: Housing costs, mortgage lending, tax delinquencies, housing quality.
July 9, 2015 | Permalink | No Comments
July 8, 2015
The Dense State of NYC’s Housing
NYU’s Furman Center released its State of New York City’s Housing and Neighborhoods in 2014. I found its discussion of urban density to be the most notable aspect of this nexcellent and data-rich annual report. The discussion on density concludes,
The renewed attractiveness of New York City since the 1970s means population will likely keep increasing, and so will population and housing density. In 2010, few other U.S. cities had any neighborhoods that matched the density experienced by the typical New Yorker. Yet, by recent historical standards, today’s density levels are not extreme. In recent years, the typical New Yorker lived in a lower-density neighborhood than the typical New Yorker in 1970, as population growth in the city since 1980 was focused in moderate-density neighborhoods. Further, while great disparities in education and crime across neighborhoods exist, these differences are not generally associated with density levels.
High density cities like New York are playing an increasingly important role in the economy as drivers of productivity and innovation. This means the accessibility of the city to new residents is important both for New Yorkers and the nation. We have demonstrated that significant numbers of new residents can be accommodated without elevating density to levels above what the city has historically experienced, and that high-density neighborhoods do not perform lower on key quality of life indicators. City officials will need to ensure that neighborhoods have sufficient infrastructure to accommodate their new residents. (20)
This last point is key: density is not a problem so long as the appropriate infrastructure is built to support it. And while current residents are concerned about the impact of local increases in density, the city as a whole benefits from the increased economic activity and cultural creativity that comes along with heightened density. The De Blasio Administration knows this. Other local elected officials should sign on to increased density along with thoughtful zoning and infrastructure policies.
As a final note, I would compare the transparent acknowledgement of the report’s financial sponsors in the front matter with the much less transparent acknowledgment found in Harvard’s Joint Center for Housing Studies State of the Nation’s Housing 2015 report that I blogged about yesterday.
July 8, 2015 | Permalink | No Comments
