It's Time to Change How We Measure Affordable Housing

June 23, 2017                                           By: Joe Cortright

A cheap home isn’t affordable if it comes with high transportation costs.

I’ve long been dissatisfied with commonly used measures of describing housing affordability. There are lots of reasons to believe that a single, fixed percentage of income standard does a poor job of reflecting whether housing is priced appropriately, and whether households are being asked to spend too much. I’ve explored some of these issues before, but today I want to focus on one key issue: the tradeoff between cheap rents and costly transportation.

In virtually every major urban real estate market, a major determinant of rent and housing prices is accessibility. If you live in a dense, walkable urban neighborhood, you might manage to live quite comfortably not owning a car, or having just one car for a two-worker family. If you live on the exurban edge, in a low density subdivision, you might need to own multiple cars just to manage the daily chores of school, shopping and play, as well as commuting to work. It turns out that the value of accessibility gets priced in to the walkable, well-located housing; and conversely, rental and for sale housing that’s located at a distance from everything is priced at a discount to the market................Read More

To Help Strengthen Iowa, Expand Affordable Housing

June 24, 2017                                              By: Chris Hensley & Eric Burmeister

Iowa may not be the most expensive place in America to live, but that doesn’t mean everyone who lives here, or wants to live here, can afford a home. For many people who provide essential services and do important work in our community, such as nurses, teachers, welders, retail workers and EMTs, housing prices are simply out of reach. More than 74,800 households across our state pay 50 percent or more of their monthly income just to keep a roof over their heads. Our leaders in Washington, D.C., must take action to change this.

Being unable to afford a home doesn’t just affect the lives of low-income Iowans and their families; it has a ripple effect that harms whole communities and ultimately the entire state. Without a stable home, it’s nearly impossible to maintain a job, do well in school or stay healthy. When such a large portion of income goes towards rent, families are forced to make difficult trade offs — whether it’s buying healthy food for the kids or putting gas in the car to get to work, or paying for childcare or visiting the doctor, the list goes on....................Read More

5 Cities Taking Steps to Improve Affordable Housing Access And Availability

June 20, 2017                     By: Saraf Ahmed, Bisnow National

A disproportionate number of high-end rental units coming online are not satisfying the mid- to low-end demand driven by working Americans who cannot afford extravagant homes and high rents.

This disparity is being exacerbated by a combination of factors, including rising contruction costs (the Engineering and Construction Index notes a 37% increase in the last 10 years). Also, approximately half of the country's renters are millennials under 30 whose average annual income ($40K) barely exceeds their average student debt ($35K).

The 11 biggest metro areas in the United States are oversupplied with apartments running at an average $8,500/month, despite the increase of 22M middle- and low-income renters from 2006 to 2014. Couple that increase with the student debt crisis and a steady drop in Class-B development, and you can understand why the U.S. is experiencing a severe affordable housing shortfall................Read More

Tax Reform Uncertainty Hits LIHTC Market

June 19, 2017          By: Multifamily Housing

Tax reform is one of the major issues the Trump administrations is looking to tackle this year, which has given a jolt of uncertainty to the low-income housing tax credit (LIHTC) market and is affecting affordable housing deals from coast to coast, writes Brian Coate, a vice president with the financial firm Lancaster Pollard.

As Coate explains, since 1993 corporations have been under the same tax structure, topping out at 35%, which has provided stability in the LIHTC market. That stability no longer exists, however, as there's been no clear indication as to what the corporate tax rate would be under a Trump tax reform plan, although it’s been rumored to be between 15% and 25%.

Such a change would have a dramatic impact on LIHTC pricing, as a majority of credit buyers are large corporations. With lower taxes to pay, they would need less tax credits. Although stabilized today, almost immediately after the election the LIHTC industry saw a $0.20 drop in pricing across all markets and all projects...........Read More

Preserving Affordable Housing: Best Practices

June 12, 2017                                                 By: Bendix Anderson

With the affordable housing shortage seemingly growing by the day, it's more important than ever to preserve the stock we already have.

America has a deep shortage of affordable housing, and, every year, the situation seems only to worsen. That makes it more important than ever to preserve the homes we already have in affordable housing programs.

In buying Oakwood Apartments in Bedford, Mass, POAH used donation tax credits to guarantee the seller a sufficient profit to enable the property to be sold at a discount.

But affordable housing developers can’t buy every affordable housing property that’s up for sale in order to keep these buildings in stock, or repair every affordable building burdened with deferred capital needs. What the industry can do, however, is ensure the best chances of preserving affordable housing by following six recognized best practices.............Read More

U.S. Losing Low-Rent Units

June 16, 2017                             By:  Donna Kimura

Harvard's State of the Nation's Housing report has grim news about housing affordability.

The lower end of the rental housing market continues to lose ground, according to the new The State of the Nation’s Housing report by the Joint Center for Housing Studies of Harvard University.

Modestly priced rental units available for under $800 declined by 261,000 between 2005 and 2015, with most of the loss occurring at the lowest rent levels. At the other end, the number of units renting for $2,000 or more surged by 1.5 million.

The shift in the rental stock toward the high end of the market is also clear from the 32% rise in real median asking rents since 2000, says the report...................Read More

Tackling Affordability with Fannie Mae’s Multifamily Chief

June 14, 2017                                     By: Jeff Hayward

Renters who struggle to meet rising monthly payments with modest incomes are also fighting to live close to work, school or family members. To combat this problem, Fannie Mae's Executive Vice President and Head of Multifamily Jeff Hayward calls on all stakeholders to rethink the way they create housing for low- and moderate-income residents.

More than one-third of U.S. households—about 44 million—are renter households, and nearly 60 percent of those are classified as low-income. Many struggle to make rent payments, buy food and afford the basics.

Jeff Hayward, Executive Vice President and Head of Multifamily, Fannie Mae

At the same time, these households often face rising rents, a decline in the number of vacant low-income apartments and only modest growth in their paychecks. Many families are forced to find a less expensive rental or stay put and pay higher rent. It’s a difficult choice, especially for families trying to stay close to work, school or relatives................Read More