The statistics surrounding the lack of affordable housing across the nation and the amount Americans spend on rent are well cited throughout the industry.
An estimated 7.7 million low-income households live in substandard housing, spend more than 50% of their incomes on rent, or both.
For the 11.5 million extremely low-income households in the United States, there are only 3.3 million rental units affordable and available to them.
And the issue is not just a concern in the United States. It’s also a growing global concern. An estimated 330 million urban households live in substandard housing or are financially stretched by their housing costs around the world, according to a new report by the McKinsey Global Institute.
The Department of Housing and Urban Development’s (HUD’s) Office of Policy Development and Research, in partnership with Enterprise Community Partners and Habitat for Humanity International, addressed the statistics as well as some of the solutions for reducing the affordability gap and increasing the supply during a special event at HUD headquarters on Tuesday.
Vice President Joe Biden, who delivered remarks at the event, said every man, woman, and child need a place where they can afford to live and call home. “We know the answer can’t be homeownership alone,” he said. “We need widely available high-quality affordable rental housing.” Without that, he said Americans’ opportunities are decreased and mobility is restricted.
He reiterated that the Obama administration was committed to expanding opportunities for Americans to have the chance to have a hearthstone, rental or ownership.
Biden cited some recent proposals by the administration that could help aid the affordability crisis, including a local housing policy grant program that could help with reforming local zoning and density requirements, an increase in housing vouchers, and the expansion of 9% low-income housing tax credits through the conversion of private-activity bonds that go unused.
On the practitioner side, several industry leaders also shared some encouraging solutions.
Cynthia Parker, president and CEO of San Francisco–based nonprofit BRIDGE Housing, said her firm is working very hard to collaborate with others across the country to expand the supply.
An example of that work is the real estate investment trust that was created by the Housing Partnership Network and 12 nonprofit affordable housing developers, including BRIDGE, to preserve affordable housing.
The Housing Partnership Equity Trust has assembled $150 million in capital and has allowed the nonprofits to acquire affordable units across the nation.
Parker also said it’s important to think outside the box. In the high-cost Bay Area housing market, the average cost for new construction in San Francisco can be $660,000 per unit. BRIDGE has done its first modular construction project, which saw savings of $80,000 per unit in hard costs. “That’s a gap that could be closed quickly with that cost curve,” Parker added.
Betsy Spencer, director of Austin’s Neighborhood Housing and Community Development Office, underscored the importance of local support. “We try to employ every tool possible,” she said.
One tool in Austin for helping to finance affordable rental and homeownership programs has been general obligation bond funds that have been passed by voters in recent years.
Another tool has been the utilization of public land. She cited the award-winning redevelopment of the former Mueller Municipal Airport site into a mixed-income and mixed-use community. “That has been a tremendous redevelopment of publicly owned land,” Spencer added.
Spencer also said the city of Austin is exploring tax-increment financing and utilizing density to drive down some of the costs.
In addition to the HUD housing affordability event, Secretary Julian Castro wrote an opinion piece for CNN that addresses the affordable housing crisis and outlines the multifaceted approach the agency is taking to help meet the demand.
