Addressing Housing Affordability
Positive perception of apartments and their residents is on an upswing. There is growing recognition that renters are a large and diverse group of Americans, including those who can afford to buy a house but instead choose to rent.
Much of this shift is attributed to continued economic anxiety caused by the recent collapse of the housing market, but its origins are also based in the changing demographics and needs of the country.
Apartments are a smart choice for many people because homeownership is not for everyone, and renting fits people’s needs at various points in their lives. With apartments now playing a greater role in housing Americans, political risk for the apartment industry stemming from a lack of supply and rising rents is even more significant.
Housing affordability, an issue that previously held limited attention, has become a mainstream concern. The National Apartment Association (NAA) and National MultiHousing Council (NMHC) are working with Beck Research and SKDKnickerbocker to help local leaders understand that the country needs more apartments.
Government officials strongly agree that communities benefit from having a supply of apartment types at different rent levels.
According to recent research, government officials agree that apartments contribute to successful communities. People understand that one-size-fits-all thinking does not work for housing; people from many walks of life and at many points in their lives choose to rent.
Apartment homes provide millions of people the ability to live in the right housing for them at the right time of their life. Providing rents at all price points gives people the chance to find the right apartment for them and their family, where they are able to live without the debt of a mortgage.
Homeownership is not for everyone, and available apartments at a variety of rents helps ensure there are housing options for everyone. Apartments are one way for the market to meet the needs of different people, since healthy, vibrant communities have a mix of rental and ownership options.
America's changing economy and demographics mean more and more people are choosing apartments over a single-family house, but apartment owners and builders are struggling to keep up with the demand.
Over the next decade, the number of renter households could rise by up to 4 million.
If we had a wider range of housing options, we would be able to tackle the affordable housing problem. This would increase the supply of housing and make it more affordable.
State and local governments need to work with multifamily housing developers to remove obstacles to building more affordable apartments. Harvard University estimated that there are only 58 affordable units for every 100 very low-income households in 2013. We need to do more to encourage the construction or renovation of affordable apartments.
Affordable housing is an economic issue that impacts our communities and can be improved by increasing the supply of apartments. Improving housing in America is the best way to help the middle class.
The following are proposals for increasing the amount of affordable housing:
- Encourage more private sector investment in existing affordable housing properties, an area where federal funding has fallen short in recent years.
- Encourage re-purposing of existing real estate into rental apartments.
- Expedite the often lengthy and costly permitting, review and approval process for any project with a significant percentage of affordable housing.
- Sponsor more public land swaps or land donations so developers can build affordable housing on underutilized or vacant properties.
- Increase federal funding for affordable housing so more people who qualify for subsidies would actually receive them.
- Expand tax incentive programs that lower the cost of development by reducing or eliminating property taxes on new construction, rehabilitation or major improvements to affordable rental properties.
- Adjust zoning requirements for parking, groundfloor commercial space and other requirements that raise construction costs, in exchange for building more affordable units.
- Adjust zoning rules to allow density bonuses, which would incentivize the construction of affordable units in a property by allowing for an increase in the total number of units the developer could build than they could with the existing zoning without affordable units.
- Provide tax rebates or other incentives for apartment owners who voluntarily set aside a certain number of their existing apartments as affordable housing.
- Housing affordability is an economic issue that has become a major public policy concern. Now, more than ever, policymakers must recognize that renters are a large and diverse group of Americans that contribute to their communities.
Millions of Americans rent by choice, but shortages of apartments drive rents up and impact a large slice of America.
Government officials need to back a wide range of affordable housing proposals to build more and rehabilitate current housing stock to better meet this challenge.