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Providing Affordable Housing

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There is nothing like a local land use debate centered on affordable housing to verify the accuracy of Tip O’Neill’s oft quoted truism: “All politics is local.” Nevertheless, there have been myriad local planning and preservation efforts that, taken together, demonstrate that some local and state production and preservation efforts actually work. Maintaining affordable housing in our nation is critical, and local officials play a large role in that effort.

Despite the economy’s recent slow-down, we live in prosperous times. Homeownership has hit a record high level, climbing above 67 percent for the first time in our country’s history. Unemployment is low. Rapid technological innovation has increased productivity and created longer, sustainable economic growth. However, some of our citizens are being left behind.

America is experiencing a crisis in its affordable housing inventory. Rising real estate markets often translate into an increased potential for the loss of affordable housing. Our nation has set the “affordability index” for housing costs at 30 percent of one’s income, yet according to Harvard’s Joint Center on Housing Studies, in no housing market in the nation can a household earning today’s minimum wage reasonably afford a modest two bedroom rental. America’s poor are living in overcrowded or dilapidated housing or are spending a large percentage of their discretionary income on shelter, placing rent in competition with other essentials.

For low-income renters (households earning 50 percent or less of median income) affordability is threatened because the contracts for subsidies on much of the nation’s regulated affordable housing supply are about to expire.

Many owners of HUD assisted affordable units are actively choosing to exit government-sponsored programs, motivated by personal lifestyle choices, HUD’s increased scrutiny of their actions, and tax considerations. According to data gathered by the National Housing Trust, private owners have already “taken to market” more than 100,000 HUD assisted or insured apartments, and monthly an additional 2,000 such apartments are following suit. The average rent hike for these units is 45 percent.

Our housing problems are not limited to the poor. Firefighters, schoolteachers, administrative assistants, indeed, people from all walks of life, often have to pay well beyond their means for their home. The struggle for affordable housing is geographically widespread and is well beyond the urban poor. Nearly 15 percent of American families -– 13.7 million households -– pay more than 50 percent of their income for rent or live in a slum, even though some of these families earn up to 120 percent of the median income for the county in which they live.

The balance of this article will focus on four methods through which state and local officials can help spur affordable housing development or preservation: zoning, taxation, housing trust funds, and planning.

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