What is happening?
There simply aren’t enough new homes that are affordable, particularly for seniors and others on fixed incomes or for young people just starting out who may be saddled with student loan debt.
While builders focus on luxury, high end apartments with lots of amenities, the number of affordable rental homes increased just 10 percent in 2003–2013, while the number of renter households competing for those homes rose by 40 percent.
Source: JCHS tabulations of US Department of Housing and Urban Development, 2013 American Housing Survey.
The mismatch of home supply and demand is even worse for the lowest income Americans.
Some metro areas are doing a far better job than others in providing affordable homes.
Why is it happening?
As renters continue to enter the market, the supply needs can’t be met by existing homes, and new construction is necessary to help meet the shortfall, but building new homes that average or low-income renter will be able to afford is a challenge.
Zoning laws restrict density – making it hard to build affordable multi-family homes. Land costs can be expensive. And more homes alone won’t be enough to meet the demand. According to the Joint Center for Housing Studies, more than 7 million renter households have at least one member with a disability, but less than one percent of rental homes are accessible.
What can we do?
There is already a huge need for affordable homes – and that need is only going to grow as the millennial population enters the rental market.
But there are steps policymakers can take to make sure that new homes are affordable homes.
For example, in many communities, developers are offered incentives to create affordable rental homes. New York City, for instance, offers bonuses to private developers that create affordable homes. In other communities, private developers have the option to create a certain percentage of affordable homes as part of a larger development, or to pay into an affordable housing fund. There’s still more we can do to expand these policies and make sure they will meet today and tomorrow’s housing needs.
According to the National Council of State Housing Agencies, in 2013 developers requested three times the amount of Low-Income Housing Tax Credits than were available meaning hundreds of affordable developments were turned away – making the shortfall of affordable housing even worse.
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