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Housing Perspectives

Research, trends, and perspective from the Harvard Joint Center for Housing Studies

In Pursuit of New Approaches to Solve the Rental Affordability Crisis in US Cities

Could fresh, “outside-of-the-box” thinking help address the seemingly intractable problem of rental affordability?

Last spring, we decided to explore that question by having students in a new course at the Harvard Graduate School of Design develop strategic blueprints for how key officials in four very different cities – Austin, Louisville, Rochester, and Stockton – might solve the rental affordability crisis in the next ten years. Those cities’ mayors and their staff actively supported these efforts and welcomed the students’ ideas and insights. Together, we encouraged the students to challenge the many implicit orthodoxies in the affordable housing field and instead look for approaches outside of the established repertoire.

While the students did not solve the wicked problem of housing affordability, they did succeed in surfacing new ways of thinking about the problem and what can be done about it. Their final presentations and reports (which can be found by following these links: Austin, Louisville, Rochester, and Stockton) offered five promising insights and approaches:

  1. Use detailed assessments to understand the scope and nature of the problem.
    Analyzing the demographic characteristics and income levels of cost-burdened renters in each city (those spending more than 30 percent of their incomes for housing) led to a number of important insights about the nature of the problem in each city. In three of the four cities (Austin, Louisville, and Rochester), for example, nearly half of all cost-burdened renter households consisted of a single person. However, in Stockton, nearly half of cost-burdened rental households had three or more people. The analyses also showed that cost burden problems were particularly large for Black households in all four cities and for Hispanic households in Austin and Rochester. In addition, not surprisingly, the analyses showed that the problem —and the need for subsidies—was by far greatest among the poorest households.
  2. Dramatically expand the aperture for identifying financial resources, broadly defined, from both public and private sources.
    Students said cities could begin with low-hanging fruit, such as increasing taxes on real estate transactions in Louisville; imposing a new tax on vacant properties in Rochester (which would also encourage development); and charging for new utility hookups in rapidly growing Austin. But they quickly moved on to more creative solutions such as making better use of publicly owned sites, and not just vacant city-owned properties but existing public buildings including schools, libraries, offices, and parking garages. Students also suggested that cities use savings generated by other policies, such as moving low-risk inmates out of high-cost detention centers—a move that students estimated might generate up to $20 million a year for housing in Louisville. Teams also encouraged officials to get significant private and non-profit entities to provide more support for housing through a variety of approaches including providing grants and low-interest loans, donating land, building housing for their staff and students, and investing some of their endowments in affordable housing.
  3. Aggressively support and encourage non-traditional forms of housing and housing production.
    To help the many cost-burdened, single-person households, students suggested that cities change building codes and regulations to allow for new forms of housing such as Accessory Dwelling Units or shared living arrangements. The Stockton and Louisville teams also suggested that officials use economic development tools to attract a modular home construction factory to the region, a move that would reduce the cost of producing and transporting new housing units.
  4. Find new ways to help low-income tenants.
    The Austin student team estimated that the city could preserve 20,000 existing, privately-owned affordable housing units through a combination of technology (up-to-date mapping and monitoring of vacant and subsidized housing); education (reaching out to property owners to share information on tax breaks, subsidies, and services for improvements); market efficiency enhancements (helping landlords share property management services); and action (intervening to protect severely at-risk properties). Students on the Rochester team estimated that an innovative city/landlord/tenant approach to reduce utility costs could reduce housing burdens for 54 percent of the city’s cost-burdened households. The Louisville team suggested that helping low-income tenants receive greater support from existing state child-care subsidies would make housing affordable for almost 600 currently cost-burdened households.
  5. Reduce costs by helping moderate-income renters in low-cost markets become homeowners.
    The Stockton team estimated that a combination of an available but rarely used Down Payment Assistance Program (DPAP), accrual of property taxes, and a rent-to-own program could not only help 1,300 renters become homeowners but also lower those household’s monthly costs by 16 to 30 percent. Similarly, the Rochester team estimated that using the relatively robust Home Purchase Assistance Program Grant and Employer Assistance Housing Initiative to help residents earning over $32,000 per year buy some of the city’s many vacant properties could reduce the cost-burden rate by 11 percentage points.

Taken together, these ideas show that, while there may not be a proverbial silver bullet to solve this problem, there may be a cloud of silver buckshot that can help address it. Moreover, it’s clear that students want to dig into these issues and that many mayors and city officials are open to new ideas and perspectives. For our part, we are looking forward to engaging with four new cities next spring, when we’ll not only focus on affordability but explore how those cities might address the painful legacy of racism in housing. Such work, we hope, will help put us on a path towards ensuring that all Americans are affordably and decently housed in thriving and healthy communities.