Wednesday, April 30, 2014

Mapping housing affordability, a grim picture for renters

by Janet Viveiros, Center for Housing Policy

As the housing affordability challenges facing renters in the aftermath of the Great Recession have gained attention recently, I found myself wondering just what the differences in housing affordability for owners and renters actually looks like nationwide.  I decided to map the data from Housing Landscape 2014 to see where low- and moderate-income owners and renters are struggling to afford their housing the most.

The map below shows that large shares of low- and moderate-income working homeowners struggle to afford their homes in high-cost housing markets. New Jersey leads the way with about three in 10 households spending at least half their income on housing, making them severely housing cost-burdened.

It can be easy to write off housing affordability problems as belonging solely to states with high-costs markets like California and New York, or states like Florida where many markets have not recovered from the foreclosure crisis. However, even when you look at states with the lowest shares of severely cost-burdened working homeowners, there are still significant portions of households that cannot afford their homes. In almost all states, the share of working owners who spend at least half their income on their homes is in the double digits.

The numbers are even worse for low- and moderate-income working renters. The map below shows that even in states in the Midwest and South that appear relatively affordable to working homeowners, many more working renters are struggling to afford their rental homes. 

It is striking that in many of the states with the smallest shares of severely cost burdened working owners, at least one in 5 working renter households spends at least half its income on housing. At seven percent, North Dakota has the lowest share of severely cost-burdened owners. Yet, more than double that share, 16 percent, of working renter households in North Dakota are severely cost burdened. Renters are having a difficult time affording their homes because rents have steadily risen as demand for rental housing has exceeded supply even in what appear to be relatively affordable places.

Regardless of whether a household is renting or owning, if it spends half of its income or more on rent and utilities, or on mortgage payments, insurance and taxes, it has little left over for other expenses like food, health care, and transportation. This can threaten the stability of a family or individual and negatively affect their health and prevent them from being economically self-sufficient. Therefore, we must continue to discuss ways to provide more affordable housing, particularly rental homes, in order to support the wellbeing of households across the country.

Monday, April 28, 2014

“Inclusive Upzoning” Can Help Make Rents More Affordable for Middle and Low-Income Households

by Robert Hickey, Center for Housing Policy

Last week I had the opportunity to speak to the problem of rising middle-class rents and what to do about it.
screenshot of the author's op-ed on
Why middle class can't afford rents,
In my op-ed for, I write about the importance of amending our zoning codes to allow more apartments where demand is surging – in walkable cities and town centers near jobs and transit. But the second piece of this solution, as I discuss, is asking private developers that benefit from relaxed zoning to ensure some of the new homes they build are priced affordably for our teachers and other low-to-middle-income neighbors who are struggling with rents nearly half their income.

I’ve been inspired by the growing number of places nationwide that are making this link between growth and affordability. They’re part of a new crop of “inclusionary housing” policies that has emerged since the housing downturn. Places like Arlington County, Va., which requires developers that take advantage of a new, flexible form-based code along a major transit corridor to price 20-35% of net new development at below-market rents. Or Redmond, Wash., where almost every time a new neighborhood plan is adopted that increases development opportunities it’s linked to a 10% housing affordability mandate.

Most prominently, New York City is now moving under Mayor Bill de Blasio to strengthen its inclusionary housing policy for areas of the city that are being rezoned and redeveloped as part of the previous mayor’s New Housing Marketplace plan (PDF). As candidate de Blasio put so well in 2013:
“New York used to build for the middle class. Today, it seems to build only for the wealthy…. [W]hen neighborhoods are rezoned — unlocking enormous value for building owners — developers should be required to build affordable housing for low- and middle-income families in return….”
In a forthcoming report due out in June, I take a closer look at inclusionary housing policies that strike this kind of bargain with developers, and their potential to address local housing challenges in various political and legal environments. Stay tuned!

Tuesday, April 22, 2014

What I like about the attacks on housing finance reform

by Ethan Handelman, National Housing Conference 

When you suddenly see vigorous but contrived opposition to a policy proposal, it means at least some opponents are afraid it might actually happen. That’s why I take heart from the spate of attack ads and strange new coalitions popping up against the Johnson-Crapo housing finance reform bill. Housing stakeholders need to stay engaged, both to improve the bill and to move the bipartisan effort forward. If the other side is shouting, we’re doing something right.

Recently, we’ve seen baseless attack ads from the 60 Plus Association, which NHC and many allies decried in a statement. We’ve seen new campaigns with Orwellian names like “United for American Homeownership” and “Investors Unite” arise to advocate against reform of Fannie Mae and Freddie Mac. In coming weeks, you’ll see ads from housing stakeholders in Capitol Hill publications supporting housing finance reform. But beyond Johnson-Crapo, we haven’t seen any other detailed proposals for housing finance reform with bipartisan appeal.

We know that the status quo is unsustainable. Our housing finance system is still relying on temporary measures put in place during the financial crisis. Access to homeownership is still far too restricted, and rental housing is under pressure from high demand. That’s why NHC and many others have come together to support a reformed housing finance system, one that puts shelter for Americans at its core. We urge you to join us in this effort by reaching out to me at

Thursday, April 17, 2014

The Devastating Impacts of Concentrated Poverty – And What Can Be Done to Reverse the Trend

by Lisa Sturtevant, Ph.D., National Housing Conference and Center for Housing Policy

Recently published research on concentrated poverty by urban policy professor Paul Jargowsky shows that the number of high-poverty neighborhoods increased by 50 percent between 2000 and 2010. And the number of poor people living in high-poverty neighborhoods grew twice as fast as the overall poor population. A new book by sociology professor Patrick Sharkey documents the multi-generational nature of living in concentrated poverty—that is, the prevalence of two or more generations living in high-poverty neighborhoods, particularly among poor African-Americans. Both researchers emphasize the growing body of research that demonstrates overwhelmingly that residing in high-poverty neighborhoods has significant impacts on health, child development, educational attainment and labor market outcomes. And both researchers stress the same important root cause of concentrated poverty among African-Americans: a long history of exclusionary zoning that was reinforced by institutional discrimination in housing markets through a large share of the last century, and less formal discrimination that continues into the present.

The implications of living in concentrated poverty are well-established and the new data demonstrate that the severity of the problem has increased over the past decade. So, what can be done to reverse the trend? At a recent event sponsored by the Economic Policy Institute and the Century Foundation, Jargowsky and Sharkey were joined by Ta-Nehisi Coates of The Atlantic and Sherrilyn Ifill of the NAACP Legal Defense and Educational Fund to talk about how we need to think about poverty, particularly African-American poverty, and what should be done to undo the policies that set the stage for the current pattern of concentrated poverty. Here are some of their solutions:
  • Inclusionary and fair-share housing. Since suburban exclusionary housing is at the heart of the causes of concentrated urban poverty, a necessary solution is to mandate more inclusive housing policies in all jurisdictions and to require localities to provide their fair share of affordable housing. Specifically, all localities should require mixed-income development, explicitly prohibit housing discrimination based on race and income, and actively produce housing that is affordable to the entire income spectrum.
  • Mobility programs with intense counseling. Families living in high-poverty neighborhoods should have the choice to move to places with less poverty, safer streets, better schools, and better services. That choice needs to be accompanied by information about how to find housing in new neighborhoods and support for transitioning from a family’s original neighborhood, where they might have lived for generations, to somewhere new.
  • Transportation investment. As important as it is to have access to affordable housing in neighborhoods with good schools and safer streets, the reality is that a lack of transportation options can make moving to those neighborhoods unrealistic for many families. Investment in transportation, particularly in public transit, is an essential and durable part of making the transition out of high poverty neighborhoods possible. 
Living in concentrated poverty, particularly when residence in high-poverty neighborhoods persists over multiple generations, has serious damaging consequences for individuals and families. Throughout the conversation on solutions, all of the speakers talked about the importance of finding “durable” solutions that would live on through business cycles and political change and why we need to focus on policy solutions that redress decades of decisions that have institutionalized the current landscape of poverty.

Thursday, April 3, 2014

Senate markup of tax extenders is positive for housing

by Ethan Handelman, National Housing Conference

A collegial, efficient, and nevertheless long markup session in the Senate Finance Committee produced a tax extenders bill with several positives for affordable housing. Chairman Ron Wyden (D-OR) joined with Ranking Member Orrin Hatch (R-UT) to offer a selected set of tax provisions to extend for two years. Among the provisions included in the bill were several that could help housing and community development efforts if and when the bill becomes law:
  • Extend the Mortgage Debt Relief Act, which protects households going through foreclosure, short sale, or mortgage modification from having to pay an additional tax bill. NHC and many allies in the National Foreclosure Prevention and Neighborhood Stabilization Task Force wrote to members of the committee in support of this provision, and NHC joined a separate coalition effort of national groups earlier this month. Senator Enzi (R-WY) opposed this provision as unneeded, but Senators Stabenow (D-MI), Nelson (D-FL), Brown (D-OH), and Isakson (R-GA) all voiced strong support, and Senator Stabenow cited data from many states still facing high rates of potential foreclosures.
    • Extend the minimum 9% credit percentage for the Low Income Housing Tax Credit. The ACTION Campaign, of which NHC is a member, has long advocated for this provision, as well as the 4% provision below. This was included in the Chair’s mark. Senator Cantwell (D-WA) in particular spoke in support of the Housing Credit.
      • Enact a 4% minimum credit percentage for Low Income Housing Tax Credits used to acquire existing properties (although not the credits that accompany volume cap private activity bonds. This provision was added in the Chair's modified mark.
      • Renew the New Markets Tax Credit for two years, which supports community development in places underserved by other capital sources. Senators Wyden, Schumer (D-NY), Brown, and Cantwell called out the NMTC as a valuable program. The Committee also approved an amendment from Sen. Brown to to create a new Manufacturing Communities Tax Credit, modeled on the NMTC and funded through unused credits.
      • Extend a provision making it easier for military families in Housing Credit properties near military bases, by excluding the military Basic Allowance for Housing from income calculations.
      This bipartisan effort came with the important caveat that this would be the last such extenders bill, and that further actions would have to come through a process of comprehensive tax reform. Such an effort is quite unlikely this year given the action already taken by Rep. Dave Camp (R-MI) in the House, but Congressional leaders have said they will pursue it again after the election. The House has yet to act on a tax extenders package.

      Tuesday, April 1, 2014

      What does it mean to move housing forward?

      42nd Annual Gala honorees show us the way. 
      by Chris Estes, National Housing Conference

      I had a great trip last week to San Francisco, where I had the pleasure of kicking off Ballard Spahr’s Best of the West Housing Conference. I talked about a variety of important housing issues like funding for the National Housing Trust Fund, the President’s budget for housing programs and the important issues it sets up for next year, expansion potential of programs like RAD, and implications for tax reform now that Chairman Camp introduced his bill.

      I also had great meetings with folks from the Federal Home Loan Bank of San Francisco, Enterprise Community Partners and the Non-Profit Housing Association of Northern California. I learned a lot from them about the issues that are in play in California’s housing community, and had a chance to share details with them about NHC’s Annual Gala in June and the Solutions 2014 national conference on state and local housing policy, which we’ll host in Oakland November 18-20.

      As I mentioned in the Washington Wire last week, Linda Mandolini of Eden Housing and former New York Representative Rick Lazio will co-chair the June 12 Gala, Moving Housing Forward: Seizing the Moment. Please take a moment to learn more about the Gala on our website.

      The Gala is in its 42nd year. My personal goal is to ensure that it continues to be a celebration of affordable housing and community development work that is truly national in scope. The past two Galas have honored organizations, like veterans housing groups in 2012, and NeighborWorks America® and Omni NY LLC in 2013, that provided uncommon leadership and vision in solving America’s most pressing housing needs.

      We’ve renamed the Housing Person of the Year award to show our continued commitment to honoring the best work in housing, whether it comes from an organization or an individual. This year’s Housing Visionary Awards will go to Enterprise Community Partners for its work in rebuilding affordable housing in the Gulf Coast region following the hurricanes of 2005, and to the Citizens Housing and Planning Association (CHAPA) of Massachusetts, which led a broad-based campaign that achieved $1.4 billion in state bond funding for affordable housing and included innovative funding for the improvement of childcare centers.

      Last year we honored former NHC President Conrad Egan with the Carl Coan, Sr. Award for Public Service to Affordable Housing in recognition of his long (and ongoing!) career in support of affordable housing. This year we will present the Coan award to Dianne Spaulding. Dianne has led the Non-Profit Housing Association of Northern California for the past 25 years and grown it into the largest and most successful regional housing group in the country. In addition to her regional work, she has been an important factor in successful state policy efforts, and her voice is well-respected by California’s congressional delegation.

      I hope you will make plans to attend Moving Housing Forward as it promises to be an incredible opportunity to connect with and be inspired by housing leaders from across the country. You can purchase tickets to the Gala and access sponsorship information on our website.

      How data helps communities meet housing needs

      Developing solutions through research
      by Lisa Sturtevant, Ph.D., Center for Housing Policy

      On a recent Thursday evening, I stood in front of a group of residents gathered at Central Library in Arlington, Virginia, to talk about data. The prospect of sitting in a darkened auditorium to talk about numbers and charts brought many in the room back to the dreaded statistics class they had taken in college or grad school. But statistics are not just numbers. They can tell a story. And in this case, they tell a story of a changing community.

      In an interactive, game show style discussion, I asked the audience questions, like the following:
      • What age group has grown the fastest in Arlington since 2000?
      • Has the non-white population increased or decreased?
      • What share of households in Arlington has incomes below $15,000?
      • What group is most likely to spend 30% or more of their income on housing costs?
      • What share of persons with disabilities spends more than half of their income on housing costs? 
      By asking questions like these, it compelled people to reflect on what they thought their community looked like. And then by seeing the actual data, either their perceptions were confirmed, or their understanding opened up. Often it was the latter. In fact, one participant said he realized how important data was to combating preconceived notions people might have about their own community.

      But the primary reason for sharing the data that night was to help guide a discussion about what the characteristics of a community mean for planning for housing. Arlington County is in the midst of developing a housing element of their comprehensive plan which will outline goals, priorities and strategies for meeting future housing needs, and the data presented at this community meeting provided a framework for having a conversation about needs and priorities.

      The Center for Housing Policy helps communities use data to tell their story and respond to their housing challenges. In a project for Housing Virginia, the Center has developed employment-driven forecasts of housing demand, data that will help housing advocates talk about the economic need for affordable housing. Housing Landscape, which the Center released in late February, provides data on severe housing cost burden to help people better understand needs in their community. We will also prepare one-page state and metro area level fact sheets on housing affordability that build off of Housing Landscape. Finally, the Center is working on a database of inclusionary zoning programs which will include data that will help local communities understand the characteristics of successful inclusionary programs.

      While data might seem dry and statistics frightening, the Center is constantly looking for ways to make numbers accessible and user-friendly so that communities can better tell their story and work towards solutions to affordable housing challenges.

      The tax extender that prevents foreclosures

      What we're building
      by Ethan Handelman, National Housing Conference

      It’s been three months since the Mortgage Debt Relief Act lapsed. It’s a provision in the annual package of tax extenders that keeps homeowners from having to pay income tax on debt that gets forgiven in a mortgage modification or short sale. It’s also a powerful tool to prevent foreclosures and protect struggling homeowners that Congress really ought to renew.

      How does the Mortgage Debt Relief Act work? Normally, if you have debt forgiven, the IRS charges you tax on it just like with money you earn (it’s called cancellation of debt income). However, after the housing crash left so many underwater homeowners, Congress rightly realized that the tax burden could make it hard to resolve troubled mortgages. If your monthly payment is too high, adding a tax bill on top of a loan modification might just be too much to manage. If your lender forecloses and you live one of the 38 recourse states, you’d face a tax bill on the unpaid debt in addition to losing your home. So Congress passed the Mortgage Debt Relief Act to exclude discharge of debt on a principal residence (which in IRS-speak means, “your home”).

      Until Congress renews the act, people nationwide don’t know whether they can manage a mortgage modification without paying additional tax. Short sales are harder, too, if you don’t know the final cost. And approximately 2 million families have seriously delinquent loans in states where foreclosure would trigger additional tax, according to the Urban Institute. That’s why NHC and many others are calling on Congress to renew the Mortgage Debt Relief Act, and to do so quickly.

      LINC Housing turns vacant motel into affordable apartments

      News from NHC's family of members
      by Radiah Shabazz, National Housing Conference

      NHC member LINC Housing Corporation recently celebrated the completion of Mosaic Gardens in Huntington Park, Calif.  The development was transformed from a 55-room motel to 24 affordable apartments for low-income families, where 15 of the units will be set aside for former foster youth.

      The new complex includes 10 studio apartments, six one-bedroom units, four two-bedroom and four three-bedroom units. Renovations allowed for the motel parking lot to be transformed into a courtyard that includes a playground, benches, a barbeque and landscaping. An on-site resident services program facilitated by LINC Cares will provides residents with after-school programs, exercise classes, community engagement activities and more. Staff will be available 24/7 to address the housing, physical, emotional, transportation and health needs of Mosaic Gardens residents.

      “LINC Housing is committed to bringing healthy, beautiful, sustainable, and stable homes to people who need them most,” LINC’s President and CEO Hunter L. Johnson said in a press release. “This public-private partnership is a model for how we can come together to develop a community that not only serves the local residents by providing housing but also contributes to the neighborhood overall by beautifying an abandoned building that is now this vibrant community we celebrate today.”

      Construction began on Mosaic Gardens in January 2013. The development’s first residents began moving in February. The new community also favors sustainability and has registered with the U.S. Green Building Council in pursuit of LEED platinum certification.