Solving the Affordable Housing Issue

Just in California – more than 3 million households, pay more than 30 percent of their income toward rent with half of these renters paying more than 50%.

Defining the Issue

The affordable housing issue in the United States is large, with a shortage of millions of homes and high cost burdens for many households:

• Shortage of homes:
  There is a shortage of 4–7 million homes in the US, and 7.3 million rental homes that are affordable for extremely low-income renters.
• Cost burdens:
  In 2021, 31.8% of US households were cost-burdened, meaning they paid more than half of their income on housing. This was especially true for low-income households, renters, and people of color.
• Rents:
  Rents have been rising rapidly, increasing by about 30% since 2017. Half of renters spend 30% or more of their income on rent.
• Homeowners:
  In 2021, 22.7% of homeowners were cost-burdened, with 10.4% paying more than half of their income on housing.
• Geographic areas:
  The coastal parts of the US are more cost-burdened than the rest of the country. Some cities with the worst housing shortages include Boston, Los Angeles, San Diego, San Francisco, and Seattle.

Factors that have contributed to the housing shortage include:

• Restrictive zoning,
• Lack of starter homes,
• Jobs not paying a living wage and growing inflation,
• Tightened mortgage credit,
• Rising material and regulatory costs,
• Supply-chain issues, and
• Labor shortages.

Making More Affordable Housing

There are several ways to make housing more affordable, including:

• Preserving existing affordable housing:
  This is often more cost-effective than building new housing, and it helps keep neighborhoods affordable.
• Investing in affordable rental housing:
  This can help with socioeconomic divergences, employment access, and carbon emissions.
• Increasing funding for subsidized affordable housing:
  This can help create jobs and attract employees.
• Relaxing zoning rules:
  This is considered one of the best ways to address the housing affordability crisis.
• Creating affordable housing trusts:
  These are public funding sources for low-income housing developments.
• Low income housing tax credits (LIHTC):
  This federal program provides tax credits to property owners who develop units at reduced rents for low-income people.
• Rental assistance:
  This is considered the best way to address housing needs for families with low incomes.
• Housing Cooperatives:
  Pooling the resources of multiple households to invest, own and maintain multifamily housing units.