View
2
Download
0
Category
Preview:
Citation preview
Housing affordability in Greater Washington:What’s the problem? How can policy help?
Jenny Schuetz
September 2020
Brookings InstitutionMetropolitan Policy Program
jschuetz@brookings.edu@jenny_schuetz
Presentation overview
• Why housing affordability matters
• Defining the housing affordability problem(s)– Low- vs middle-income households
– National context
– Greater Washington Region
• How could policies improve housing outcomes?– Federal support for income & wealth-building
– State & local land use reforms
2
Housing affordability impacts individual & community well-being.
• Stable, decent housing is critical to families’ well-being.– Housing costs are largest monthly budget item– Residential stability provides foundation for other social &
economic activities– Where you live determines access to jobs, schools, and place-
based amenities
• Where we build – and don’t build – housing affects regional labor markets & climate change– Cheap housing tends to be far from job centers– Time spent commuting is unproductive, unpleasant, & bad for
the environment.– Employers have trouble hiring & retaining workers in high-cost
regions
3
Affordability challenges in a nutshell
• Poorest 20% of households in US spend more than half their income on housing.
• Low-income families more likely to live in over-crowded, poor quality housing
• Homeownership lags among young adults, Black & Latino households
• Current development patterns lead to worsening car traffic & climate change
4
5
Lower-middle income households spend more on housing
https://www.brookings.edu/research/cost-crowding-or-commuting-housing-stress-on-the-middle-class/
RentersOwners
Capital Region’s housing challenges
• Housing supply has grown unevenly across Capital Region in past 20 years– Most housing growth has occurred in exurban counties– New housing continues to be predominantly single-family. – Because single-family homes use more land per housing unit,
they are generally more expensive to buy or rent.
• Housing costs have risen faster than incomes– Long-term homeowners have benefitted from rising wealth, but
renters face affordability challenges in most jurisdictions.– Black & Latino households face higher rent burdens throughout
the region.
Source: State of the Capital Region 2019https://blogs.gwu.edu/centerforwashingtonareastudies/research-2/
8
Housing growth was concentrated in a few jurisdictionsNew housing units added by county and intra-regional location, 2000–2016
9Source: American Community Survey 2012–2016.
Housing values have grown faster than household incomesTrends in median housing values & median household incomes, 1980-2017
10
Source: 1980—2010 Decennial Census, American Community Survey 2013–2017. Income and house value in constant 2018 dollars.
11
Black and Hispanic Renters Face Higher Rent BurdensMean monthly rent-to-income ratios by race and location type
Source: Authors’ calculations using 2012–2016 IPUMS data.
How could policies improve outcomes?
• Federal subsidies needed to reduce financial stress for low- and moderate-income households
– Supplement incomes or housing vouchers
• Reduce regulatory barriers to housing supply
– Build more housing near jobs and transit
– Build smaller, lower-cost homes (apartments)
– Make it faster, easier, & cheaper to build housing
• Flexible use of local funds
– Acquisition, preservation, locally funded vouchers
12
Levers to increase housing supply
• Most regulatory barriers to housing are local– Zoning limits land where apartments are legal– Lengthy, complex, expensive development process– Discretionary approval process favors existing homeowners
• Federal, state & local governments are exploring new ways to reduce barriers– Minneapolis 2040, Oregon HB 2001, – VA statewide duplex proposal– Proposals from Democratic presidential candidates– White House Council on reducing barriers to affordable housing
• Effective policy solutions face steep political opposition
13
14
https://www.brookings.edu/research/gentle-density-can-save-our-neighborhoods/
Cost savings from gentle density
15
Station area: Needham Heights
Typical lot size (sq ft): 12,930
Structure type: New SF Townhouses* Condos
Target density: 1 per lot 8/acre 20/acre
Number of hsg units 1 2 6
Land
Land costs (existing lot) 428,731 428,731 428,731
Hard costs
Site prep, materials, labor 625,000 1,049,832 1,702,842
Soft costs
% of land + hard costs 30% 35% 40%
Soft cost total 316,119 517,497 852,629
Total project costs 1,369,850 1,996,060 2,984,201
Cost per unit 1,369,850 840,595 502,691
* Because the lot is too narrow for townhouses, we model this as a duplex.
Flexible uses of local funds
• Acquisition strategy offers advantages over new construction– Lower per-unit cost to acquire/rehab existing properties
– Brings affordable units on line faster
– Opportunities to convert commercial properties
• Example: King County (WA) Housing Authority– Bond financing + private capital to acquire mixed-income
properties along transit corridors
https://www.brookings.edu/research/strategies-for-increasing-affordable-housing-amid-the-covid-19-economic-crisis
16
Comments & questions welcome!
jschuetz@brookings.edu
@jenny_schuetz
17
Recommended