Federal Investment in Affordable Housing Is Desperately Needed

BY Robert Davis


President Joe Biden has reportedly stricken provisions to bolster affordable housing development from the American Jobs Plan (AJP) in an attempt to get Congress to pass the legislative package.

Known on The Hill as Biden’s infrastructure package, the previous version included a promise to invest $318 billion in housing to increase the stock of affordable units across the country.

That total would have represented an increase of $100 billion since the administration first introduced the legislation in late March. It also contained provisions to spend:

According to a White House fact sheet, the goal of the package is to create and preserve more than one million housing units. The administration would accomplish this by adding $35 billion to HUD’s HOME Investment Partnership Program and $45 billion in the Housing Trust Fund.

At the same time, HUD Secretary Marcia Fudge said the affordable housing plan would “create and sustain hundreds of thousands of good-paying jobs – the majority of which won’t require a college degree – with a free and fair choice to join a union and bargain collectively.”

Advocates say the decision to nix the affordable housing provisions could significantly impact state housing initiatives that are already underway.

The National Low Income Housing Coalition released a statement saying that the housing provisions must be passed separately if they cannot be include in the AJP.

“The opportunity to enact robust housing investments may be lost if congressional leaders do not tie the passage of the bipartisan infrastructure bill with a much larger economic and housing recovery package,” the organization said.

The reasoning NLIHC asserts is simple: COVID-19 sent the housing market into a frenzy and placed millions at risk of eviction or experiencing homelessness.

Some states responded by granting housing authorities more agency over affordable housing development. For example, the Colorado legislature passed House Bill 21-1117 during the 2021 legislative session. The bill grants municipalities the right to require affordable housing through land use policies. This clarification moves around Colorado’s anti-rent control statutes, which developers have been struggling with since 2000.

At the turn of the new millennium, Colorado’s Supreme Court decided a case known as Town of Telluride v. Thirty-Four Venture. The Court ruled that Telluride’s rent control policies violated the state constitution. Shortly thereafter, a state moratorium on rent control was in effect.

The result has been devastation for many low-income renters in the state.

Over the past decade, rents in several towns across the Centennial State have ballooned. For example, someone could rent a two-bedroom apartment in Denver for approximately $900 per month in 2010. Today, that average stands at over $2,000.

To help keep housing semi-affordable, Denver began requiring developers to dedicate a mutually agreed-upon quantity of units for people making less than 80 percent of the area’s median income (AMI). However, this policy has created a gulf between the homes under construction and the market need.

According to Denver’s Department of Housing Stability report, the most significant shortage of affordable housing exists between 30 and 60 percent AMI. But, until HB21-1117 passed, the city had no means of requiring that developers build affordable housing units.

There is a catch, however.

Municipalities must provide developers with an option to opt-out of the affordable housing requirements. Instead, developers can pay a fee if they’d rather build market-rate housing.

Rural developers in Colorado have been struggling with home prices for decades. This bill is a sign that the housing squeeze may soon come to an end. They just have one demand: hurry.

“As a developer of affordable and workforce housing, we are feeling the intensity of the timing here,” said Kimball Crangle, the Colorado market president of Gorman & Co. “We know if we can’t get it done right now, in two years, the opportunity is likely to be gone. If we don’t get housing created and set aside for the workforce of these towns, the lights will be on, but nobody will be home. These are going to become ghost towns.”

Others see the policy as a risk that is worth the reward.

“Everyone is for affordable housing until it is built next to them,” said John O’Neal with Buena Vista’s Fading West Development. “Entitling a project is costly and risky. The free market can build attainable housing, but it’s not easy. There are so many obstacles and so much risk. We won’t get there unless some of the obstacles are removed.”

States such as Illinois now require municipalities to spell out these risks in publicly available affordable housing plans. Lawmakers recently strengthened the state’s Affordable Housing Planning and Appeal Act to require cities with at least 1,000 residents and 10 percent or less available affordable housing to submit plans to the state to build more affordable units.

Similarly, New Haven leaders are working on a zoning change requiring affordable housing. Under the proposal, any downtown-adjacent building with at least ten residential units will need to set aside at least one affordable unit for tenants earning no more than 50 percent AMI.

Karen DuBois-Walton, the executive director of the New Haven Housing Authority, said the policy plan is “wildly insufficient.”

“Requiring five- to ten-percent affordability in new market-rate developments isn’t a serious proposal to actually improve affordability in the city,” she said. “Moreover, the tax abatements built into this proposal continue to cut into city revenue while protecting profits for large-scale developers.”

How Can You Help?

Affordable housing is a contentious issue across the country, but it doesn’t have to be. Contact your lawmakers and tell them how much affordable housing can benefit your community. Urge them to:

Robert Davis

Robert is a freelance journalist based in Colorado who covers housing, police, and local government.

Related Topics

Categories: Affordable housing

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