Perspectives on the Opportunity of Expanding Housing Affordability

Perspectives on the Opportunity of Expanding Housing Affordability

Lynn Ross, Deputy Assistant Secretary for Policy Development. “The heart and hearthstone, family and home, housing and opportunity are always going to be the core of who we are as a country." –Vice President Joe Biden

According to HUD’s forthcoming Worst Case Housing Needs report, in 2013, 7.7 million households who were very low-income renters without government housing assistance either paid more than 50 percent of the income for rent or lived in severely inadequate conditions. Of course, these issues are not just found here in the U.S. The McKinsey Global Institute’s A blueprint for addressing the global affordable housing challenge study estimates that 330 million urban households around the world live in substandard housing or are financially stretched by housing costs, and that within a decade at least 1.6 billion people worldwide will struggle to obtain decent, affordable housing.

Despite these staggering statistics, a number of policymakers and practitioners are working to develop and implement solutions to this growing crisis. To explore that work, on April 7, HUD’s Office of Policy Development and Research (PD&R) hosted “The Housing Affordability Opportunity: Lowering Costs and Expanding Supply” in partnership with Habitat for Humanity International and Enterprise Community Partners. The conference brought together a diverse group of stakeholders and provided a day-long platform for an evidence-based discussion on the challenges and opportunities for expanding housing affordability.

The program focused on understanding the evidence and the nature of housing affordability challenges and explored how to seize the opportunity by moving from evidence to solutions. As you can imagine, the discussion throughout the day was wide-ranging and further bolstered by a special keynote from Vice President Biden. Below is a selection of quotes from program panelists:

• “Policy sets the rules for the market, so you need to address both [policy and market failure to improve housing affordability].” –Michael Spotts, Enterprise Community Partners
• "We really need to stop treating affordable housing as a boutique industry." –Cynthia Parker, Bridge Housing
• “[Addressing housing affordability] is a 10 trillion dollar opportunity globally.” –Jonathan Woetzel, McKinsey Global Institute
• “All of us struggle with NIMBY… but when you can tell folks a story that you are generating jobs and income and leverage to the entire community, [it makes] a much more palatable story [than just talking about housing.]” –Betsy Spencer, City of Austin
• “[Use] metrics as a way to drive the [policy] conversation and drive performance in your staff [to achieve on those policies]” –Arthur Jemison, City of Detroit
• “There’s also just a fundamental change that we’re starting to go through in this country about the narrative around race and class that we have to address head on.” –Lisa Davis, Ford Foundation
• “When we look at 2,400 cities and their affordability gaps, we see that two-thirds of that gap is actually concentrated in just 100 cities worldwide. These cities tend to be large, fast-growing, and constrained in their expansion in some way, which usually makes land up to 50, sometimes 60, 70 percent of total unit cost.” –Jan Mischke, McKinsey Global Institute
• "When developing an affordable housing strategy, we must also think about the neighborhood characteristics… [such as] transportation… [and] connectivity." –Max Weselcouch, Moelis Institute

A number of themes emerged from the discussion, including: the importance of evidence and metrics to inform and drive policy; the imperative to develop and communicate a narrative about housing affordability that is inclusive and resonates; the need for housers to move beyond just housing to include health, transportation, education, etc.; the effectiveness of coordinating a suite of housing tools and not relying on a single “silver bullet” policy.

To further amplify the themes of the conference, Secretary Julian Castro wrote an editorial published by CNN that not only addresses the housing affordability crisis. The article also outlines how HUD is responding through successfully implementing programs like the Rental Assistance Demonstration to proposing the expansion of the Housing Choice Voucher program (including restoring some 67, 000 vouchers lost during sequestration.)

Secretary Castro also makes note of a new proposal in the President’s FY16 Budget for $300 million to launch the Local Housing Policy Grants initiative. The proposed initiative would fund competitive grants to help policymakers design and implement smarter, more flexible regulations and engage more stakeholders in efforts to expand the supply housing in their communities and increase affordability. The initiative would also create a community of practice for grantees to ensure that disseminating the best practices, new ideas, and common challenges of the group become shared learning and capacity building opportunities. In short, this initiative would support the kind of evidenced-based innovation a number of the panelists highlighted during the conference.

It will be some time before we know if the Local Housing Policy Grants proposal will become a reality, but there’s no need to lose the momentum from the conference. I encourage you to visit the event website to access conference resources—including full video of the event—and to share your experiences, ideas, and best practices with the housing affordability opportunity in the HUD USER forums. An upcoming feature article in The Edge will continue the housing affordability conversation, delving further into the themes raised by the conference panelists.