Increasing the Supply of New Affordable Housing:
The U.S. Department of Housing and Urban Development (HUD) Affordable Housing Toolkit assists state and local governments in increasing their supply of new affordable housing units through the use of HUD’s Community Planning and Development (CPD) funds. Access to affordable housing is essential to fostering equitable, inclusive, and resilient communities.
This Toolkit aims to support housing and community development staff and partners by:
• Introducing key strategies that may expand the local supply of affordable housing.
• Connecting equity considerations to the development of affordable housing.
• Detailing affordable housing development spotlights that deployed local strategies and used CPD funding sources.
• Addressing the need to cultivate and maintain partnerships to combat community opposition.
• Expanding on the notion of housing as merely “bricks and mortar.”
In our existing environment, the supply of affordable housing does not meet demand. Households are and will continually be priced out of the rental and homeownership markets as the problem persists into the foreseeable future. In fact, there is no county in the United States where a worker with a full-time, minimum-wage job could afford the median rent for a two-bedroom apartment. The value of land and housing, both single-family and multifamily, and the cost of construction materials have increased steadily. The ramifications of the COVID-19 pandemic have further disrupted supply chains and tightened housing supply, and rising inflation has strained the budgets of renters and homeowners alike.
Access to adequate, safe, and affordable housing is demonstrably uneven across several socioeconomic indicators. Despite the Fair Housing Act and anti-discrimination laws, factors including race and ethnicity, gender and sexuality, household composition, access to jobs, the availability of living wage jobs, and disability status all influence an individual’s or household’s experience when searching for and securing housing. Historical practices and entrenched structural dynamics, such as redlining, exclusionary zoning, racial covenants, blockbusting, and unfair lending and appraisal practices, continue to displace and under-house Black, Indigenous, and people of color and other marginalized populations. These practices also further disinvestment in these communities and undermine key societal outcomes, such as improving educational and health outcomes for children.
Localities that take an active role in shaping affordable housing initiatives have a strong impact on promoting housing stability, achieving equitable development patterns, and building coalitions to foster broader change. Decisions over land use what types of housing can be built in which locations—are largely made by state and local governments. The development process is often seen as long, complicated, and potentially risky—all factors that drive up the cost of newly built housing and limit the market’s ability to respond to demand. Zoning tools, such as caps on building height, minimum lot sizes, bans on multifamily buildings or factory-built housing, and minimum parking requirements, also increase the cost of housing.
Because private sector-led development produces most new affordable housing units, local and state government agencies’ involvement in creating affordable housing centers on the following:
• Establishing a balanced, equity-driven housing strategy.
• Using national and local data to deepen an understanding of housing in the community.
• Analyzing development feasibility to ensure practical housing policies for the local market.
• Developing sound underwriting principles for the use of public funds to maximize the success of individual projects.
• Reducing regulatory barriers.
• Understanding complex market trends and realities (e.g., construction and labor costs).
• Prioritizing development by establishing and tracking clear goals and objectives.
HUD-funded annual CPD programs provide critical financing options for state and local governments to increase the affordable housing supply. The goal of CPD programs is to develop vibrant communities by promoting integrated, equitable approaches that provide decent housing, a suitable living environment, and expanded economic opportunities for low and moderate-income persons.