Across the U.S., several markets suffer from an affordable housing crisis. It impacts millions of Americans every day and weighs heavily on the industry. Some of the biggest obstacles? Racial discrimination, out-of-reach markets, rising rates and demanding lending requirements make the American Dream an impossible feat for a huge portion of the population.
The National League of Cities (NLC), an organization that looks to assist city leaders in building stable and affordable housing across all communities, has proposed several ways to tackle these challenges. In a recently released report—Homeward Bound: The Road to Affordable Housing—NLC outlines the state of housing in the U.S. and how to tackle the affordability crisis.
“The United States has a housing crisis. In cities and towns nationwide, access to housing—particularly access to safe and affordable housing—continues to be a major concern and increasingly serves as one of the biggest barriers to economic prosperity for American families,” said Muriel Bowser, mayor of Washington, D.C., in the report. “Because of stagnant wages, rising real estate prices, higher interest rates and strict lending standards, housing has become an outsized cost for more and more working families.”
To better pinpoint these challenges and come up with appropriate solutions, NLC assembled a Housing Task Force, for which Bowser is the chair. It is made up of several members, including housing specialists, scholars, real estate developers and city staff.
NLC first addressed the elements that help stabilize housing environments. According to the report, they are:
- Economic Mobility: Affordable housing in low-income and high-opportunity neighborhoods can lead to better cognitive development test scores for children, economically diverse schools and better opportunities for wage growth.
- Job Security: Affordable home construction generates additional income, jobs and taxes. For every 100 homes built, for example, the benefits equal to about $11.7 million in income, 161 local jobs and $2.2 million in local taxes, on average.
- Health and Well-Being: Poor quality housing leads to more hospitalizations and asthma-related emergency-room visits. Young children living in unstable housing have a higher chance (by 20 percent) to be hospitalized compared to those in stable housing.
Standing in the way, however, are racialized zoning policies like redlining and lending practices with wide disparities across race and gender, states the report. The modern challenges we face today stem from 90-year-old policies that promoted racial- and wealth-based segregation in our geography and social relationships.
The NLC taskforce says there are several initiatives that can help tackle some of these challenges, including:
- Stabilizing and stemming the loss of public and affordable housing.
- Implementing a long-term federal housing bill that can stand alone in authorizing 10 years of new funding for housing pilot programs.
- Supporting the modernization of land-use and planning on both local and regional levels.
- Addressing inequities in both housing finance and development systems.
- Supporting scalable financing models for cities, towns and villages.
On a more local level, NLC recommends establishing programs that support housing goals by combining funding and financing streams; modernizing local land use policies, collaborating with stakeholders; supporting the individual needs of sub-populations, such as seniors and the homeless; and prioritizing equitable outcomes in housing decisions.
The key, however, is in the government coming together in a bipartisan partnership to address these growing problems, the report emphasizes.
“We know: When cities come together and focus on an issue, we get the work done. Cities are incubators for innovation and places where rhetoric translates into actions,” Bowser’s statement continued. “But cities cannot do this work alone. The federal government must step up, treat our nation’s housing needs seriously, and recognize that housing is infrastructure. Together, we must double down on solutions that are working. We must think bigger and bolder to address our most persistent challenges. And when we have solutions, we must fund them.”
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com.
Sounds like a lot of “liberal” jargon to me with little to no substance. Please do expand on these “racial” inequities you speak of. Also, rates are historically low and have gone down recently, so to include “rising interest rates” as a barrier to owning a home doesn’t give much credibility to this “report”.
Projects that focus on community and rising the “tide” need out of the box thinking. From what I’ve seen in my community it is a slow process from development to actual people in homes and it’s 15 families at a time not hundreds at a time. We need creative acquisitions that bring all types of people together. Creativity creates excitement!!
Very surprised that you didn’t mention how college grads with crushing student loan debt and the unkept promise of good paying jobs are contributing to the housing crisis.
All well intended, I’m certain, but please do not lay everything at the government’s footsteps, as that just creates a myriad more of government workers, study groups and inflated City coffers, not true relief to housing affordability.
Put the money where it belongs, in the land incentive trusts, and local Land Banks to facilitate increased density and smaller footprints. Give the Banks the leeway to lend at already subsidized rates, at 40-50 year notes, to make things affordable.
I wish you would put where the blame lies!!! Some of the issues you describe
“Because of stagnant wages, rising real estate prices, higher interest rates and strict lending standards, housing has become an outsized cost for more and more working families.”
Add the biggest problem ITS THE GOVERNMENT. What you have to go through because of environmental ( some RIDICULOUS) laws and fees it takes more money than land cost and years (we are going on 20+ years) to get it developed. It is so risky that it has killed our RE development business in CA. Just ask in CA how much it cost to get a home out of the ground? FEES!!!! Just built a furniture store and there were over 500K in UNEXPECTED fees. The biggest problem is the GOVERNMENT!!! My husband even tried to build affordable housing since he saw none of his affordable fees go towards that. But NO they wanted the money and decades later they still have not built affordable housing. ITS THE GOVERNMENT!! It costs in the hundred of thousands for permits here for a home (over 1M for commercial) and $26 in Missouri.. ITS THE GOVERNMENT!!!
Same o same o! Remember what led to the last housing crisis!
From what I can see throughout history, every empire has done itself due to money, greed, and power. I am an optimist, but looking around at things lately, and both parties not agreeing on almost anything, how can the important agendas be dealt with. Of course, affordable and reasonable housing is one of the extremely urgent issues, but so is our infrastructure, roads, bridges, tunnel and high-speed rail. Brazil and China are way ahead of us in this area. It appears that we work for Washington, instead of the reverse. Why are there no gun laws for background checks, and to keep AK47’s off the street, to prevent more carnage? The bill is sitting on Mitch McConnell’s desk, but no signatures. We are the most powerful and richest country in history and only 243 years old and I am wondering if we will make it to 300?