Access to affordable housing is a growing concern in cities across America. Consequently, in 2014, New York Mayor Bill de Blasio rolled out a plan to add an additional 80,000 affordable housing units to the city’s housing inventory by 2024. On the other side of the country, Los Angeles Mayor Eric Garcetti is pursuing a similar goal with his 2015 Executive Directive to add 100,000 affordable rental units to LA’s housing stock by 2021. The affordable housing crisis is not confined to big cities, though. According to the Urban Institute, in 2013, there were an average of 28 affordable rental units for every 100 extremely low-income renter households nationally. This means that almost three quarters of low-income households spend more than 30 percent of their monthly income on housing (i.e. experience a housing affordability burden), live in substandard housing, or both.
In small and large cities, the affordable housing crisis has been fueled by the combined effects of wage stagnation and rent increases. While working-class renters have seen their real wages decline, they have faced growing competition for housing from empty nesters, as well as from college-age millennials who have rediscovered the benefits of urban living. The construction of new rental properties has failed to keep up with this demand, and rent increases have outpaced workers’ incomes across the country. Governing magazine recently identified the ten metro areas where the rental housing affordability burden was rising the fastest. Expectedly, high-rent areas like San Francisco and San Jose were on the list, but so was Buffalo, NY, a place that has experienced population and industrial decline since the 1970s.
So why are shrinking cities like Buffalo, Pittsburgh, Detroit, Cleveland, and Birmingham also facing a housing crisis? In addition to stagnant wages and increased competition for housing from certain demographics, these cities have an aging housing stock and acute levels of dilapidated and abandoned property. They are at the center of a perfect storm. On one side, there is a declining inventory of decent, safe, and affordable housing. On the other side, there is growing pressure to gentrify existing affordable neighborhoods which are adjacent to clusters of hospitals, universities, and other anchor institutions where remaining employment is concentrated.
The impact of continued decline is clear when conditions in a big city like Philadelphia are contrasted with a shrinking city like Pittsburgh. Between 2009 and 2014, Philadelphia experienced just over 1 percent growth in total population and total housing units respectively. In contrast, Pittsburgh’s population declined by 2.3 percent and its housing stock declined by 6.3 percent. During that same period, Philadelphia’s median rents increased by 14.3 percent while median rents in Pittsburgh increased by 15.6 percent.
Regardless of whether a city is growing or simply treading water, access to affordable housing presents an ongoing challenge for public officials and grassroots advocates alike. The distinction between big cities experiencing growth and shrinking cities is that the former tend to have greater capacity at the local level, more robust philanthropic sectors, and benefit from higher levels of private investment. Still, all cities with tight housing markets are taking steps to make affordable housing more plentiful and sustainable.
Piecemeal Remedies at the Local Level
Local government, in particular, has been an incubator for affordable housing policy. Experiences at the local level heighten our awareness of the depth of the housing crisis, but also the extent to which local remedies can address it. One popular approach for doing so is inclusionary zoning (IZ). Under this strategy, local land use policies are adopted that require developers who apply for zoning variances and/or receive public subsidies to set aside a fixed percent (e.g. between ten percent and 15 percent) of residential units in their projects for affordable housing. Large cities like Chicago, San Francisco, Denver, and New York have adopted local IZ ordinances: In large part, these policies have been adopted in cities with tight housing markets and increased rent burdens. But similar examples are now bubbling up across the county. In Buffalo, a coalition led by the grassroots organization People United for Sustainable Housing (PUSH) is advocating for the city to adopt an IZ ordinance.
At the same time, affordable housing trust funds (AHTFs) have also been established to help finance the rehabilitation and development of affordable units. These funds combine revenues from local taxes and real estate fees, nonprofit foundations, philanthropic gifts, and other public and private sources. Resources from AHTFs are used to leverage state and federal dollars for affordable housing. In Minneapolis, an AHTF has been in place for over a decade and has produced almost 6,500 housing units since 2003. Cities like Louisville, St. Louis, Washington D.C., and Seattle have stepped up efforts to use AHTFs. Others, like Baltimore and Pittsburgh, have proposals for new AHTFs on the November ballot, and under consideration by their respective city governments.
At the grassroots level, broader community development goals for addressing the affordable housing crisis have included community land trust (CLT) and community benefits agreement (CBA) movements. In the case of CLTs, local nonprofits acquire land in targeted development areas and then pursue strategies to build sustainable affordable housing. One of the highest profile examples of this model is the CLT in Boston’s Dudley Street neighborhood.
CBAs offer another option for grassroots coalitions interested in promoting more equitable development. Under this approach, community-based coalitions negotiate for community benefits in exchange for their support of large projects proposed by developers. These negotiated concessions include things like local hiring, neighborhood amenities, and affordable housing. Successful CBAs have been negotiated as part of the project approval process for sports arenas and other megaprojects in cities such as San Diego, Los Angeles, Pittsburgh, and New York. Despite a growing number of successful CBA negotiations, bringing developers to the negotiating table remains a barrier to the wider use of this tool. In November, Detroiters will vote on two ballot measures to require developers of large projects to negotiate CBAs with local residents. If that effort is successful, CBAs may become the rule, rather than the exception, in the local development process.
Notwithstanding signs of resilience and progress at the local level, efforts to build, maintain, and sustain affordable housing face stubborn resistance from real estate developers, large anchor institutions, and government officials at both the state and local levels. This is a fight affordable housing advocates face time and again. It is also reminiscent of the battle for rent control that began in the 1970s. At that time, rent control laws emerged across the country, only to be declawed and chipped away at by real estate interests and political opponents across ensuing decades.
Although affordable housing is a local problem, it requires a national response. Successful campaigns to adopt local affordable housing policies require support from broad-based coalitions with the wherewithal to sustain hard-fought gains. In cities with progressive traditions, the chances of adopting and sustaining support for any one of the above-mentioned initiatives, as well as other local policies, are much greater. Unfortunately, many places lack these traditions, as well as the local capacity to achieve progressive policy outcomes. And this is why we also need a stronger federal response to the affordable housing crisis.
A Stronger National Response
When the Housing Act was enacted in 1949, its purported goal was to provide every American family with a “decent home and suitable living environment.” To date, this goal remains unfulfilled. Our current affordable housing crisis highlights the need for the federal government to finally recommit to this goal.
Today, the federal government’s largest affordable housing programs are the Housing Choice Voucher (HCV) Program, which provides rent vouchers to low-income households, and the Low-Income Housing Tax Credit (LIHTC). Although the HCV’s 2016 budget authorization was $19.63 billion, it still lacks sufficient funding to address the affordable housing needs of all low-income renters. Most applicants for HCVs can anticipate several years on a waiting list. Similarly, the LIHTC was authorized to sell $8 billion in tax credits at a discount to corporate investors in 2016, which subsidizes the development of affordable housing across the country. However, the need for resources to support the construction of new units, and the rehabilitation of existing units, far exceeds these current funding levels.
The federal government could, therefore, begin to address the affordable housing crisis by providing additional funding to these two programs. Reducing the rent burden on low-income households should be a national priority, and expanding the HCV program will have an immediate impact. Likewise, authorizing more LIHTCs will infuse needed resources into the segment of local housing markets that builds and rehabilitates affordable housing. The provision of adequate federal resources is essential for supporting equitable and sustainable neighborhood revitalization. Without a broader redistribution of resources at the federal level, a few well-positioned cities will be able to hobble together a patchwork of local affordable housing policies, while many other communities will continue to fall through the cracks.