7 Strategies for More Resilient Affordable Housing

Many affordable home renters are just one natural disaster, financial crisis or health emergency away from housing insecurity. The structural instability and financially precarious state of rental affordable housing becomes more acute with each threat.

Recently, The NHP Foundation undertook a study on affordable housing vulnerability. Along with Enterprise Community Partners, the organization queried more than 100 affordable housing stakeholders including investors, housing agency leaders, developers, elected officials and others.

Survey participants rated housing policy and other interventions from the past decade, divided into three distinct periods: the Great Recession & Aftermath (2008-2011); Rebuilding in a Divided U.S. (2012-2019); and Pandemic & Social Upheaval (2020-2021)

Briefly, results show that despite gains made by many policy enactments directed towards increased housing production and rental assistance, most underserved populations who comprise the renter universe remain just that—underserved. And simply building more new housing is not the answer either. Additional strategies must be implemented, and services provided to ensure residents can attain and maintain affordable housing.

Here are some of the outstanding findings:

• Nearly 88 percent perceive that people of color struggle to access and keep affordable housing.
• Nearly 89 percent cited long-term racial discrimination in real estate, lending practices, and federal housing policy.
• 81 percent said they have the ability to address these racial and ethnic disparities in their current position. At the same time, 86 percent believe the public sector should have substantial responsibility for furthering greater equity of opportunity.
• While respondents feel that veterans and older adults have had their needs at least adequately met by policies and programs enacted since 2008, they also said that immigrants and formerly incarcerated individuals have been especially poorly served, along with people living in rural areas.
• Programs for the formerly homeless and people with disabilities were ranked as falling just shy of the adequate threshold but incrementally above the results for people with low incomes in general.
• 59 percent contend that neither the public nor the private sector currently does enough to support affordable rental housing.
• 54 percent feel that the two sectors should bear equal responsibility in supporting such housing, while
• 43 percent believe the responsibility to support affordable rental housing should lie primarily with the public sector
• 80 percent want various public sector actors—each level of government, as well as mayors and city councilmembers—to take a more active role in furthering the development and preservation of affordable housing.
• 83 percent believe the philanthropic sector also needs to take a more active role in promoting residential affordability than it has in the past.

Therefore, what steps ought to be implemented by those inside and beyond the affordable housing industry to ensure more resilient housing? We looked to experts participating in the 2021 NHPF Symposium “A Decade of Rental Housing Vulnerability: Lessons Learned from Financial Crisis to Coronavirus,” including mayors of major municipalities, academics and policy influencers, social activists, and state housing agency funders, for recommendations, which we have condensed to seven workable strategies.

1. Capitalize on a Readiness to Address Racial Inequity

The current awareness of and attention to years of systemic racism have created a sense of urgency, and now there is a strong willingness to redress historic wrongs that have led to persistent racial and ethnic disparities in accessing and remaining in quality housing. Stakeholder recommendations are:

• Pursue policies and programs at all levels of government to reverse decades of redlining, home appraisal discrimination, and unequal access to quality housing
• Invest in long under-served populations and places. Among other things, there is a consensus recommendation for strong enforcement and potential expansion of anti-discrimination legislation such as the Fair Housing Act and the Community Reinvestment Act.

2. Redouble Efforts to Assist All Underserved Populations

Those queried contend that the policies and events of the past decade plus have negatively affected most renter populations, although some groups of renters have fared better than others. Stakeholder recommendations are:

• Increase funding for voucher-based programs benefiting residents with low incomes, with larger amounts made available for people further down the income ladder.
• Revisit income thresholds for various affordability programs, recognizing that even moderate-income households struggle to afford quality housing in certain parts of the country.

3. Foster Creation/Expansion of Automatic Stabilizers for the Housing Market

Passing meaningful and impactful legislation during periods of pronounced economic or political strain—such as severe economic downturns or public health emergencies is often a Herculean task. Participants advocate for policies which act as automatic affordable housing stabilizers, beneficial in delivering much-needed and immediate support. Stakeholder recommendations are:

• Make the Tax Credit Exchange Program permanent to facilitate the exchange or return of unused tax credits for cash grants in the event the LIHTC market should bottom out, as occurs during severe economic downturns.
• Automatically increase allocations of housing vouchers when unemployment rates cross a certain threshold which would inject much needed capital into affordable housing markets while supporting residents in a timely fashion.
• Tailor these automatic stabilizers to fit the needs of all stakeholders in the ecosystem while side-stepping the often arduous congressional approvals needed for fresh legislation to address individual crises.

4. Enhance Capital Support

Survey participants generally considered the most effective programs to be those that focused on increasing the supply of affordable homes, particularly those with wraparound services. These policies have taken the form of capital support, such as the TCAP and credit exchange and the Rental Assistance Demonstration  programs. Stakeholder recommendations are:

• Lobby for increased funding of the LIHTC, the Capital Magnet Fund, National Housing Trust Fund and other programs that facilitate the development and preservation of more affordable rental units.
• Seek ways to “bake in” funding for services.  

5. Make Local, Flexible Policy Shifts to Enable Production and Preservation

Local decisions often determine where and how much such housing can be developed. Zoning and building codes are central to the twin questions of availability and affordability. Effective supply-focused initiatives have eased regulatory burdens, such as by modifying land use policies to allow for greater density. Stakeholder recommendations are:

• Increase accessory dwelling units on existing single-family lots.
• Change zoning density limits enabling multifamily properties.
• Generate local affordable housing funds to augment state and federal resources for the purpose of developing or preserving affordable rental housing.
• Address market differences: Explore raising income thresholds for eligibility in some high-cost markets, as even many moderate-income households find themselves housing cost-burdened.

6. Break Down Barriers to Increase Collaborative Efforts

Most respondents believe that the public, private, and philanthropic sectors have key roles to play in expanding and preserving the supply of affordable housing. Yet, too many existing programs are designed in ways that make collaboration difficult. Programs do not necessarily have similar affordability thresholds, and some prioritize certain types of capital over others. Stakeholder recommendations are:

• Consider ways to deepen subsidies for developments to be both affordable and economically viable.
• Encourage the public, philanthropic and private sector to take a larger financial role than they have in the past.
• Tweak regulations to enable programs to augment each other in a relatively seamless way
• Revisit regulations to make them more consistent across programs. Aligning program rules can make it easier for private-sector actors to work in partnership with the public sector producing greater impacts.

7. Be open to bold, new funding ideas

Respondents acknowledged the urgency of creating housing to withstand the nation’s next crisis and encourage creative financing options. Stakeholder recommendations are:

• Consider cryptocurrency: One municipality taking this recommendation seriously is Miami, where its introduction of a local cryptocurrency, Miami Coin, has “in just under 60 days, already generated about $7.5 million for the city and can be used for affordable housing.”
• Look to other countries. Learn from policies that support stable, affordable rental housing. For example, consider these case studies on rental housing implemented in six developed countries. The U.S. stands out as “having spent the least amount of GDP on housing compared to other rich countries.”

With 89 percent of those surveyed believing that housing is a basic human right, we challenge everyone in the equation to seek innovative solutions to fund more resilient housing going forward.

Eric W. Price is executive vice president & CFO of the National Housing Preservation Foundation.