The crisis impacting housing affordability stands among the most pervasive and complicated challenges facing the nation. In virtually every part of the country, housing costs have outstripped incomes. That’s left huge swaths of the population either rent burdened or entirely removed from homeownership. The crisis is most acute in the nation’s largest cities, but smaller cities, towns and rural areas are not immune.
“This isn’t just a question of economics,” says Jonathan Curtis, founder and CEO of Chicago, Ill.-based real estate development firm Cedar Street Partners. “When people can’t afford stable housing, everything else becomes more difficult: Finding and keeping a job, accessing healthcare, caring for children and building generational wealth. Housing underpins opportunity, and right now, the foundation is cracking.”
Without coordinated action, more thoughtful policy and fresh ways of thinking about planning, financing and developing housing options, the yawning gulf between Americans with access to housing affordability and those without will widen, he says.
Obsolete methods
The frameworks created years ago for developing housing were designed to preserve neighborhood character or keep growth in check and no longer work, Curtis says. They didn’t account for the economic realities of climate change and population pressure.
To really address the challenges, Curtis believes state governments will need to take the lead in enacting laws with teeth to tackle urban policies that throw up obstacles in the form of “inconsistent standards, exclusionary zoning, inflated impact fees and a planning process that drags through layer after layer of political review,” he says.
What he calls “clear fixes” exist: Mandating certitude of fees and timetables, forcing cities to shoulder the burden of proof when turning thumbs down on compliant projects and dictating cities losing in court cases post large appeal bonds. Modular construction can also play a role, trimming the time required to deliver affordable housing, making the process more predictable and reining in supply chain volatility.
Curtis knows the challenges and possible solutions first hand. “We spent years trying to advance a modest mixed-use housing project in La Canada Flintridge, one that meets local needs, respects the community and complies with state law,” he says. “Even so, we faced resistance rooted in outdated land-use patterns and reluctance to accept change. Ultimately, we, the California Attorney General and two housing organizations took legal action to move the project forward. The ruling was watched closely through California. It underscored the need to modernize how cities think about growth, especially in high-opportunity areas where exclusionary practices still hold sway.”
Evolving crisis
The solutions to the affordability challenge must evolve, because the crisis itself continues to evolve.
So says Matt Forssman, managing partner with GMF Group, a Palm Beach, Fla. firm with a strategic emphasis on manufactured housing communities. “Strategies like public housing and rent control have played important roles, but come with limitations,” he says. “Rent control may provide short-term relief, but it can also discourage new development and worsen supply shortages. Public housing developments are expensive to build and maintain and require significant government funding.”
Manufactured housing communities (MHCs), which Forssman calls “naturally occurring affordable housing” has offered housing for millions for much of the last century. MHCs represent the most significant source of non-subsidized affordable housing in the U.S. “Unlike subsidized housing, MHCs are privately financed and operated . . . a market-driven solution that doesn’t depend on public programs,” he says.
Without innovative solutions, the affordability gap Curtis referred to will claim some of many municipalities’ most important contributors. “We’re watching the backbone of our communities get pushed out,” he says. “People who hold our cities together – teachers, nurses, sanitation workers, first responders – can no longer afford to live near their work . . . We continue to lose trust in the systems that are supposed to protect us. And the longer we wait to act, the harder it will be to repair what’s already breaking.”
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