To attain the goal of affordable housing for all, lawmakers need to radically re-make policies for rental housing, a new report from Demos says.
Demos is calling on policymakers to aggressively invest in affordable rental housing units to help American families build wealth. The urgency for better policies comes amid a severe housing crisis. For example, from 2010 to 2017, the San Francisco Bay Area added more than 500,000 jobs, but fewer than 100,000 new housing units. In the Washington, D.C. metropolitan area, the population grew seven percent from 2010 to 2016, but the number of housing units grew by less than half that amount.
In recent years, the average American household, renters and homeowners combined, spent 33 percent of its income on housing. The high and rising rates of housing cost burdens are the result of inadequate—and declining—supply of affordable housing, and household incomes have grown little since the 1960s, especially relative to the growth in rents.
Demos’ work has centered on people who rent homes as they are twice as likely as homeowners to have unaffordable housing. Renting households are also more likely to comprise people of color.
The United States already spends enough on housing to make it affordable for all Americans, but because most expenditures go to affluent households, the nation is in the midst of a severe housing affordability crisis. To address the need for seven million units affordable to low-income households nationwide, Demos proposes building on Senator Elizabeth Warren’s American Housing and Economic Mobility Act (creating three million housing units) by constructing an additional four million new units of public housing. As construction moves forward, Demos proposes instituting rent control nationally to immediately preserve affordable housing and prevent high rents from becoming even higher.
Additional reforms should include revamping the estate tax, the capital gains tax on home sales, and the corporate tax to fund affordable housing; allowing for public housing tenants to build wealth by permitting households to earn up to 110 percent of area median income per house; and ending the ineffective Low-Income Housing Tax Credit to shift those dollars to Housing Choice Vouchers. Landlords also must be prevented from evicting low-income households without cause.
High housing costs harm families in many ways, negatively affecting psychological, social, economic, and health conditions. It’s time to embrace policies that make housing affordable for all.