As rents rise and affordable housing inventory drops, Vincent Reina, author of a brief by the Wharton Public Policy Initiative, discussed housing policy and its impact on affordability with Wharton. Reina outlined the key points surrounding affordable housing policy.
“The more people are spending on housing, the less money they have to spend on all the other things that we require to live and be successful in life,” said Reina.
“A staggering statistic that falls within this is, as of 2017, 88% of households with a household income less than $20,000 are housing-cost burdened,” he adds. “That means our lowest-income households are disproportionately spending a large share of their income on just housing alone. In any given month, they’re left with very little money for everything else.”
Reina also discussed how in some areas, including New York, San Francisco, Los Angeles., and Seattle, price appreciation is creating further burdens on homeowners and potential homeowners. In his paper, titled “Why the U.S. Needs a New Vision for Affordable Housing,” Reina suggests changes to zoning in these areas, as stringent land use regulations are highly correlated with higher housing prices.
“Recent attempts by Governor Newsom in California to take more punitive measures and attach adjustments to local zoning and housing production to other forms of funding, such as transportation funding, represents another model, that can be even more effective if done at a federal level,” Reina said in his paper. “Changes to zoning cannot be viewed as a silver bullet, however, because of inevitable local “Not In My Backyard” tactics, but they are a prerequisite for any viable housing solution.”
Reina also suggests retrofitting existing housing stock, with the intention to reduce long-term housing costs including repairs and utility costs.
“Retrofits can help prevent housing units from falling into disrepair, reduce utility cost burdens, and garner a decent return on investment,” Reina says. “Policymakers could explore the development of financing programs that promote retrofits in exchange for a commitment from owners to maintain their unit(s) at an affordable rent.”
Read Reina's complete paper here.