Philadelphia—”I’ve been in the housing business over 45 years and I’ve never seen a housing crisis in this country as bad as that that exists today,” said J. Ron Terwilliger, chairman of Terwilliger – Pappas Multifamily Properties and the ULI Terwilliger Center for Housing, at the 2016 Urban Land Institute Spring Meeting. He was the moderator for the panel “A New National Housing Policy,” during which notable politicians and real estate leaders discussed one of the conference’s hot topics of conversation: the affordable housing crisis.
Terwilliger noted the affordable housing problem is evident through the stats: the United States is losing 125,000 affordable rental units every year and one in six Americans families spend more than half their income on housing.
He added that existing federal housing policy tends to favor homeowners over renters. While housing subsidies like the Low-Income Housing Tax Credit help fund affordable housing projects and Section 8 vouchers help families pay rent, three-fourths of the $200 billion we spend each year goes to homeownership, even though homeowners make twice as much as renters, he said.
With the number of low-income families struggling to find affordable housing only growing, several panelists expressed the need for a new national housing policy that promotes homeownership and makes rental housing more affordable.
“We need a new federal housing policy—it’s old and outdated,” said Scott Brown, former U.S. senator of Massachusetts. “We need to make sure we utilize federal dollars well … I understand how important it is to have a safe, affordable home to keep the family unit together.”
Former Maryland Governor Martin O’Malley agreed that “we have a tremendous opportunity to do things that work” in regards to housing policy, which includes confronting “the big challenge of a shrinking middle class. In order to grow our middle class, we need to make our country stronger, and that requires rungs on the ladder for economic success … and one of those rungs is affordable, decent housing.”
One step toward a new national housing policy is starting at the city level, said Renee Glover, founder of national consulting firm The Catalyst Group LLC. “I think about housing policy occurring at the federal, state and local levels … as cities compete for companies to establish their presence there, the employers are looking for safety, security and great affordable housing.” She added that while there’s the misconception that affordable housing is a “handout” it’s actually a resource for cities to remain competitive and healthy.
“The reason mayors and city officials are so important is they’re on the ground, and if America’s going to keep its competitive edge, we need great cities that offer the types of [housing] opportunities that are needed.”
Daryl Carter, chairman & CEO of Avanath Capital Management, echoed Glover’s feeling that high-quality affordable housing is needed to create healthy communities. “Our strategy is to reclaim some of [the 125,000 lost affordable housing units] and renew them.” He added that his company’s most successful rental communities are in areas with a variety of housing types or incomes.
Mixed-income communities can also solve some of the political issues surrounding affordability, he said. “We’ve gotten into this mode of concentrating affordable [housing] residents but in reality, what will lift everyone up is to have much more diverse communities, especially income wise, and those communities have more political leverage,” Carter said.
In addition to creating mixed-income communities, encouraging public/private partnerships is another way to encourage housing policy reforms. “We need to work together to maximize dollars, create opportunities and reclaim old projects or start new projects that are mixed-use or mixed-income that will start a new trend of affordable housing,” Brown said. However, he thinks these changes will likely only occur after the election is over.
Glove agreed that public/private partnerships are crucial to new housing policy. “Cities are back, the phenomenon of urbanization is real. I want to challenge the community that’s focused on community building and housing to look at ways we can have effective public/private partnerships where we’re actually developing economically integrated communities,” Glover said. “Often our policies lag 20, 30, 40 years .. we know what to do and with cities coming back, we need to figure out how can we work together to create these exciting communities.”