CEO of The NHP Foundation, not-for-profit provider of affordable housing.
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When politicians of either party go home to their states/districts, they most often hear from their constituents about the lack of affordable housing. The statistics supporting the imbalance between affordable housing supply and demand are overwhelming. And yet, while there is greater bipartisanship over the issue than in previous times, there still exists a strong divergence of opinion on how to house poor and low-income renters seeking shelter adequately.
In all fairness, Congress must deal with many competing needs. Lobbyists support their causes everywhere, and many of those causes are worthy. However, putting aside for a moment the moral rationale for increased government support for affordable housing, I tend to agree with Mark Zandi, chief economist of Moody’s Analytics, and Jim Parrott, a non-resident fellow at the Urban Institute, who said in a recent co-authored CNN editorial, “It is unnerving to see so little attention given to what may be the most critical infrastructure need of all: the nation’s dire shortage of affordable housing.”
How Bad Is The Housing Situation?
In their 2021 Gap Report, The National Low Income Housing Coalition found the number of burdened households paying rent greater than 30% of income is expanding. Rapid rent growth has been spurred by record demand. The cost of rent jumped 10.1% from 2020 to 2021, with some markets seeing year-over-year rents increasing in the 20% to 40% range. Meanwhile, between December 2020 and January 2022, wages grew at a national average of 4.5%, a rent-to-income ratio that puts more housing out of reach.
We must find ways to create more adequate housing for low-income renters throughout the U.S. It has been proven in numerous studies that housing has a positive influence on residents’ health and mental well-being; residents have greater employment opportunities; children perform better in school; and local governments benefit from lower crime and the need to provide fewer social services.
The LIHTC: A Bipartisan Tool
There is, however, a proven program for increasing affordable housing supply that has appealing aspects to both sides of the political spectrum—the Low-Income Housing Tax Credit (LIHTC). It is the primary tool to create and preserve affordable rental housing. Since its inception in 1986, the Housing Credit has financed the development of over 3 million homes across the country.
LIHTC is a public/private partnership that creates housing for low-income families, seniors, veterans and the homeless. Once the tax credits are allocated to projects through a competitive process, their sale by the developer lowers the cost of construction, allowing rents to be affordable. The most immediate and effective way for Congress to legislate more affordable housing would be to expand the supply of Low-Income Housing Tax Credits. Increasing the supply of LIHTCs figures prominently in both the Build Back Better legislation and a bill with bipartisan support, the Affordable Housing Credit Improvement Act.
What You Can Do
What can companies and business leaders do to help move the ball forward? Here are three tips gleaned from my organization’s Annual Symposia series, which brings together diverse members of the affordable housing industry, including academics, advocates, developers, elected officials and funders.
Educate yourself. Read the plethora of material on the subject. The more business leaders become informed about the national shortage of affordable housing; the more we can start addressing this issue.
Become active in advocacy. Organizations at the local, state and national levels are doing wonderful work to get decision makers onboard to create and preserve affordable housing. Check out these organizations, which often offer educational webinars and networking events, as well as opportunities for members to meet with their local members of Congress.
Volunteer. One of the best ways to understand how to advocate for creating and preserving more affordable housing is to see it in action. Many organizations provide services to those in affordable housing and those trying to access it. These organizations always need more volunteers. Consider setting aside some time to volunteer with your team.
Negative opinions can best be changed with facts. All of us need to become knowledgeable advocates and raise our voices to address the dire shortage of affordable housing. Let’s take the actions necessary to ease the housing crisis.
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