Housing

Affordable

Housing

Everyone Deserves a Decent Place to Live

Our nation faces an affordable housing crisis of epic proportions. Every year the price of housing goes up, while the minimum wage has not been raised in over a decade. Housing affordability in California is a serious crisis and is the cause for our state leading the nation in homelessness. A majority of renters (over 3 million households) pay more than 30 percent of their income toward rent and nearly one-third (over 1.5 million households) spend more than 50 percent of their income on rent. In addition, California’s homeownership rates are at the lowest point since the 1940s.

  • Nationally, there is a shortage of more than 7 million affordable homes for our nation’s 11 million plus extremely low-income families.
  • There is no state or county where a renter working full-time at minimum wage can afford a two-bedroom apartment.

Increasing access to affordable housing bolsters economic growth. Research shows that the shortage of affordable housing costs the American economy about $2 trillion a year in lower wages and productivity. Without affordable housing, families are not able to increase earnings, causing slower GDP growth. Research shows that the growth in GDP between 1964 and 2009 would have been 13.5% higher if families had access to affordable housing. This would have created a $1.7 trillion increase in income, or $8,775 in additional wages per worker. In addition, each dollar invested in affordable housing boosts local economies by leveraging public and private resources to generate income—including resident earnings and additional local tax revenue—and supports job creation and retention.

Why Can’t We Have Affordable Housing?

One of the biggest problems in California and in the nation are state and local governments. Cities don’t build homes, the private sector does. In California and other states, local governments must zone enough land in their land plans to meet their states’ projected housing demand. But cities don’t control the land and they are relying on the landowners and developers/builders to adhere to their zoning requirements for affordable housing. They also don’t control the real estate market in their city and can’t dictate pricing for resales. Most importantly, local governments get a large share of their revenue from real estate taxes, so they are not overly interested in pushing developers to develop lower cost housing that will also mean lower tax revenue.

Significant barriers and disincentives constrain affordable housing. These include:

  • Cities and counties rely on real estate taxes to manage their cities budgets.
  • Local and national economic and job market conditions drive real estate pricing & markets.
  • Lack of state & federal funding and subsidies needed to support affordable housing.
  • Challenges for developers to meet infrastructure demands placed on them by cities & state governments.

Significant barriers and disincentives constrain affordable housing. These include:

How We Can Fix This

Federal funding for affordable housing comprises a significant portion of the nation’s resources to support affordable housing. However, due to pressures to cut federal spending and reduce the deficit, federal funding for housing has declined in recent years despite the increase in the number of severely cost-burdened, low-income renter households.

We must demand that federal government provide more federal funding for the development of affordable housing. The federal government can work with state and local governments to incentivize them to ensure that developers build more affordable housing. One solution would be for HUD to provide substantial incentive payments to the landowners, developers, and local governments to build affordable homes in each new community. These incentive payments would reimburse each stakeholder for the land value, home purchase price, and tax revenue that they would be losing by building affordable housing units instead of market rate units.

I have experience in large scale master planned development and understand how the current system works. Send me to DC to develop solutions that will solve our affordable housing crisis.