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The Road to Affordable Housing

While COVID-19 is fueling budget cuts and unemployment, the pandemic is also reinforcing the importance of housing affordability according to a report in Bloomberg.

Without budget outlays, policy makers can turn that into a reality by greenlighting the construction of additional housing—especially the low-cost variety. That said, contrary to what some recent reforms—tightly focused on one particular type of housing—might suggest, Bloomberg's piece points out that the road to bountiful housing is easier said than achieved. Additional elbow grease is key to yoking the perennially conflated ideas of owning or renting a home from the reality of doling out considerable cash for a large parcel of land.

On the bright side, from California to Virginia, city and state leaders have been spearheading a reexamination of the grip of single-family zoning rules. In the country, they command most residential land. More broadly, however, the full cocktail of regulations that pose a barrier to new, lost-cost construction must be tackled by the housing affordability coalition.

A spike in “missing middle”—meaning any low-rise construction denser than detached homes, including backyard cottages, townhouses, or small walk-up apartment buildings—is paramount.

Single-unit zoning limits restrict these useful housing options, along with a bushel of other restrictions on how—as well as where—housing can be erected: among others, minimum lot size requirements, parking requirements, and height limits.

For example, in Minneapolis last year, city leaders were first to eradicate single-family zoning, while Oregon became the first state to preempt single-family zoning. It did so by requiring localities with a minimum of 10, residents to open the gates to duplexes and, in some instances, fourplexes, on each lot.

Meantime, the affordable housing crisis has come during a time when the homeless population rose 2.7% in 2019, said Rep. Maxine Waters, Chairwoman of the House Financial Services Committee.

“While more than half a million people have no place to call home, there are millions more who are on the brink of experiencing homelessness because they cannot afford to pay rent,” Waters said. She noted that in 2019, 568,000 people experienced homelessness. That spiked 42% from 2010-2017. Over the past year, a 16% jump in the homeless population was reported in Los Angeles.

More than 10 million low-income households are severely cost burden and spend more than 50% of earning on housing, according to the National Low Income Housing Coalition.

“Congress has failed to prioritize this issue,” said Waters, who added that Congress has continued to underfund programs that give people access to housing. “Not only are we failing to adequately invest in fed programs to meet the needs of people who are currently meeting the needs of homelessness, we are currently failing to adequately invest in the solutions that can prevent homelessness in the future,” she continued.

As the nation grapples with what many are characterizing as an affordability crisis, some claim that, like real estate overall, the solutions are local. They suggest that it boils down to this: the overall market needs to segue from NIMBY (not in my backyard) to YIMBY (yes in my backyard).

“As we brace for another general election, we are beginning to hear candidates weigh in on affordable housing,” said housing experts Brooke Medina and Doug McCullough in an article on Fee.org. “Federal policy affects access and affordability to housing, but the best approach to this problem is local.”

About Author: Chuck Green

Chuck Green has contributed to the Wall Street Journal, Washington Post, Los Angeles Times, San Francisco Chronicle, Chicago Tribune and others covering various industries, including real estate, business and banking, technology, and sports
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