It’s Time to Solve the Affordable Housing Crisis

Together, we can provide a wider, more diverse range of housing options at all price points

By Doug Bibby and Robert Pinnegar

The lack of affordable and workforce housing is a serious problem facing our nation today. Harvard’s Joint Center for Housing Studies reports that 37.8 million American households spent more than 30 percent of their annual income to pay for housing in 2017. More than half of those families — 20.5 million — were renters.

As leaders of two national organizations that represent the people who build, own and manage apartment buildings, we know renters are much more likely to be cost-burdened by housing costs than homeowners are. Housing eats up one-third of nearly half of all renters’ annual paycheck (47.4 percent), compared to less than a quarter of homeowners (22.5 percent).

This problem isn’t going away soon: By 2030, America will need 4.6 million new apartment homes just to meet demand. A significant shift in demographic trends is driving a fundamental supply and demand imbalance:

• Nearly 80 million millennials will create up to 25 million new households over the next decade and millions from Generation Z are seeking out their first apartments.
• Millions of Baby Boomers are downsizing and moving to more walkable neighborhoods.
• Over 25 percent of apartment households are headed by someone who was born outside the U.S. This number will continue going up, as immigrants are expected to account for more than half of all new population growth between now and 2030.

To meet the increased demand for housing, we need to build between 300,000 and 400,000 new units every year — far more than we currently build. But building more housing is not enough to solve the problem. We need to build a wider range of housing that reasonably meets the financial needs of more people.

By 2030, America will need 4.6 million new apartment homes just to meet demand.

So how do we get there? We need to set holistic, comprehensive solutions that address both rental availability and affordability into motion. These solutions exist in the form of private-public partnerships, regulatory reform and increased direct assistance, such as subsidies for the neediest renters. The National Multifamily Housing Council and the National Apartment Association look forward to showcasing these solutions in more detail in the months to come, but here is a taste of what’s happening across the nation:

• Seattle recently passed what some are calling “some of the most sweeping zoning changes in the city’s recent history,” allowing taller and denser construction in 27 transit-centered neighborhoods. Developers will be asked to include a certain number of low-income units in their buildings or, if they choose not to do so, pay a fee.
• The Minneapolis City Council voted in December to eliminate single-family zoning, becoming the first major city in the nation to do so. As a result, the development of residential structures with up to three units will be allowed in all neighborhoods. This will boost the amount of housing available to people in the city and help bring down rents.
• In Denver, city officials collaborated with employers and foundations to launch a two-year pilot program called “LIVE Denver,” the Lower Income Voucher Equity Program. The program matches vacant units with working families and funds the gap between market rent and what the resident can afford to pay, keeping low-income families from being shut out of homes in the city.
• In Massachusetts, Governor Baker has recognized there’s no one solution to the housing crisis and demonstrated a real commitment to addressing housing affordability and availability in a variety of ways. In 2019, he pushed for $100 million in funding for the state’s rental voucher program and established the Housing Choice Initiative, which dedicates more than $10 million a year in incentives, grant funding and technical assistance to enable the development of 135,000 new housing units by 2025. In addition, the state’s long-standing 40B program streamlines permitting requirements in order to create more affordable housing.

Making sure everyone has access to quality, affordable housing is a bipartisan issue.

The federal government also has a role in this discussion. A housing development toolkit released by the Obama administration in 2016 includes various actions states and local governments can take to reduce barriers to housing, as well as recommendations on high-density zoning, inclusionary zoning, density bonuses and streamlined permitting. It’s a menu of options state and local leaders can use to determine, alongside their constituents, what would work best for their communities. The Trump administration also has highlighted the importance of affordable housing by calling for a 7.6 percent increase in the Department of Housing and Urban Development’s Housing Choice Voucher Program in fiscal year 2020.

Making sure everyone has access to quality, affordable housing is a bipartisan issue. We can work together to expand the range of housing options available to our country’s growing population, reduce housing’s strain on the budgets of millions of hardworking Americans and build a better future for our nation.

Doug Bibby is president of the National Multifamily Housing Council and Robert Pinnegar, CAE, is president and CEO of the National Apartment Association. For more than 20 years, the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) have partnered on behalf of America’s apartment industry. Drawing on the knowledge and policy expertise of staff in Washington, D.C., as well as the advocacy power of more than 160 NAA state and local affiliated associations, NAA and NMHC provide a single voice for developers, owners and operators of multifamily rental housing. One-third of all Americans rent their housing, and 39 million of them live in an apartment home.