Responsible devolution of affordable housing
Introduction:
The federal government has been heavily involved in promoting affordable housing since the 1930s and continues to have a critical role to play. Over the past several decades, the federal government has financed affordability by promoting development and income subsidies, but specific allocation decisions have devolved. Housing inequities can best be addressed locally, but only if localities are held to high standards of fairness and regional coordination is facilitated. Successful and sustainable local solutions to housing affordability will also require a substantial financial investment, one that the federal government can and should reliably and adequately provide. Each year, Congress permits households with the least household need to receive billions of taxpayer dollars in unnecessary housing subsidies — Congress must correct this misallocation of funds in order to help those facing the severest housing burdens.
Much of federal affordable housing policy today involves a patchwork of insufficient and ineffective measures mitigating affordability harms. These measures provide critical short-term relief for the minority of genuinely needy households who receive assistance, but the federal government has inadequately invested in long-term solutions for housing instability. The federal government’s responsibility to address persistent housing inequity arises in part from decades of its own harmful, racist housing policies. Although the inherently local nature of housing markets suggests that the actual implementation of housing assistance programs should continue to devolve, responsibility for ensuring fair access to quality housing ultimately lies with the federal government.
Diagnosis Of The Affordable Housing Crisis:
Housing today is unaffordable for one-third of all U.S. households, and nearly half of Americans who rent. Because of rapidly inflating purchase prices and rental rates, more than 38 million households in the United States spend more than 30% of their income on housing costs (an allocation that renders housing “unaffordable” according to HUD metrics). Half of all renter households cannot afford to pay their rent and still have sufficient income remaining for food, healthcare, childcare, transportation, and other necessities. Housing unaffordability deepens inequalities and leads to housing instability with its myriad ill-effects.
Prioritizing Housing Need:
Affordability concerns exist both in the context of homeownership and in the context of renting. In the two decades from 1998 to 2018, the median sales price of homes in the United States has more than doubled, from $153,000 to $322,880. Household incomes grew during this same period, but only at a modest 4.7%, from $58,612 to $61,372 and nearly all income gains have been concentrated in the top income quintile.
Supply Allocation and Demand Elasticity:
Even though the size of the supply gap varies widely from place to place, a gap between affordable housing need and available, affordable dwelling units exists in every single state. Such a ubiquitous problem of housing affordability seems to demand a national solution, but specific local concerns shape housing challenges in a given community. In many, but not all, areas, a lack of supply of lower-priced housing units is the chief cause of expensive housing. On a national basis, there is a significant lack of supply of housing units affordable to the lowest-income households.
Ability to Pay:
The problem of unaffordable housing not only represents a market disequilibrium of undersupply, resulting in prices that are too high, but it also represents the problem of incomes simply being too low. The income piece of the puzzle is particularly salient in communities with lower-priced housing, the modest cost of which is still out of reach for the very poorest residents whose incomes are almost nonexistent. For people whose incomes cannot support the costs of a modestly priced home, increasing supply of lower-priced units may prove insufficient to address housing needs.
Quality of Home, Quality of Community:
An associated housing problem, connected to both lack of affordable units and lack of income, is the problem of uninhabitable home quality. In some places, there may be nearly a sufficient quantity of affordable housing units, but the biggest housing issue pertains to housing quality.
Public Ownership:
Public ownership of housing allows governments to ensure affordable pricing without the potential adverse market effects and takings concerns that arise over regulatory controls of housing costs. When a government controls the resource itself, it can act to price the resource to achieve consumer affordability rather than to maximize profit.
Subsidizing Production Costs to Increase Affordable Housing Supply:
The gap between the supply of and demand for low-cost rental housing is a significant part of the housing affordability puzzle, and government spending to encourage an increase in the supply of affordable rentals and the preservation of existing affordable units is a critical part of the solution to the affordable housing crisis.
Conclusion:
Unaffordable and poor-quality housing is costly and unfair for the many households who struggle to pay for shelter and never obtain a stable, quality place to call home. Unaffordable housing is also bad for the country as a whole: It is costly, destabilizing, and unsustainable. The United States is the wealthiest country in the world, and yet ranks far behind many other developed countries when it comes to quality of life for its poorest citizens. It is unjustifiable to cite lack of funding as an excuse for treating only some of the symptoms of housing instability and ignoring its underlying causes, particularly when significant public subsidies are already being allocated to populations that do not have unmet housing needs.