What are the most pressing issues in housing policy today?
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The punch line of my response is that the most pressing issues of housing policy today are not necessarily the most pressing issues of the medium- or long-term future. We have an obligation to work to resolve today’s pressing issues. But it’s critical that we start thinking now about how to meet tomorrow’s challenges. Waiting will only drive up costs and reduce options.
In the short-term, the foreclosure crisis and related challenges of neighborhood stabilization, large REO inventories, and underwater homeowners all loom large as critical issues to address. The housing finance system is struggling, restricting the availability of credit—a problem policymakers are threatening to worsen by raising down payment standards despite good evidence from a UNC study showing that low-down payment loans can be made safely to moderate-income families if properly underwritten.
Worst case needs for rental housing are at an all-time high, though the recent increase appears to be due largely to income decreases associated with the struggling economy. When the economy recovers, this statistic will recover somewhat as well, but there will remain a sizable structural gap between the wages of low- and moderate-income families and the cost of both rental housing and homeownership in many markets. If we want children to grow up in stable homes and the elderly and people with a disability to live independent lives, we will need to address this critical affordability challenge. Of course, it hasn’t helped that chronic underfunding has led to a major backlog of capital needs in public housing.
If today’s problems are a struggling economy and high foreclosures, tomorrow’s problem is one of growth. With the U.S. population set to expand by 40 percent by 2050, we will need to substantially increase the supply of housing to meet new demand. Rising populations of older adults and younger adults without children will increase demand for housing near transit, job centers, and in village and town centers, driving up the costs of living in these location-efficient areas. There is a real danger that low- and moderate-income families could be pushed out of these neighborhoods and forced to relocate to more peripheral areas where housing costs are low but transportation costs are high, reducing the diversity and vibrancy of our cities; contributing to increases in energy use, greenhouse gas emissions, and infrastructure expenses; and exacerbating disparities in wealth.
The sharp increases in both the overall number of older adults and the number of frail elderly will lead to major shifts in demand for housing and require more effective approaches for linking housing and services. Without fresh thinking on how to meet this challenge, there is a risk both that quality of life will decline for older adults and that older adults absorb all or nearly all of available affordable housing resources, shrinking the resources available to help bring stable, affordable housing to families with children.
Jeffrey Lubell is Executive Director of the Center for Housing Policy.
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