NHPF-Authored Articles & Industry Reports

• They cannot afford to, or have the opportunity to, educate themselves or their children in order to achieve higher-paying jobs and work opportunities that would help them break their cycle of financial struggle and poverty. Substandard urban schools are the norm and job training is inadequate at best. This places a greater burden on our already costly social and entitlement programs. • The above lead to higher degrees of stress, frustration and hopelessness, creating a downward spiral of human suffering and an increase in public costs. Clean safe affordable housing can stabilize neighborhoods and be a springboard for greater opportunity. Income & Housing Anyone who works a 40-hour week in the United States of America, the world’s richest nation, should be able to afford life’s basic necessities, especially decent, safe housing. Yet, according to the National Low Income Housing Coalition, a family with one full-time worker earning the minimum wage cannot afford the fair-market rent for a two-bedroom apartment anywhere in the United States. Local community development corporations (CDCs) and other mission-driven not-for-profit housing groups must compete with well capitalized, market-rate private developers in an already tight housing market. Research tells us that without support for affordable housing, affordable housing developers are unable to supply new rental units at rents that are low enough for low income households. With rental restrictions expiring for roughly 30% of the 1.34 million units of affordable housing created by a HUD program known as Section 8 project- based rental assistance ( 400,000 affordable units ), housing advocates fear that these properties will be converted to market rate properties by developers seeking to cash in on gentrifying neighborhoods, typically displacing the existing tenants. The Low Income Housing Tax Credit Program (“LIHTC”) has been an extremely effective tool to create and preserve affordable housing; it is a prototypical public/private program. According to the National Council of State Housing Agencies, the LIHTC program has provided the financing for the development or preservation of nearly 2.8 million units. But the number of tax credits allocated to the states annually doesn’t come close to meeting the needs of communities nationwide. Typically there are applications submitted for two to three times the number of housing credits the state agencies have to allocate. The need for quality affordable housing has never been more critical. In 2012, there were 11.5 extremely low income renters and only 3.3 million affordable apartments available to them—a gap of 8.2 million units. Without the Housing Credit, it is uneconomic to develop apartments for low income families. According to Harvard’s JCHS, in order to develop new apartments affordable to people working full time earning the minimum wage, without subsidy construction costs would have to be reduced by 72% of the current construction cost average. Since the 1980s, wages have failed to keep up with the cost of housing, whether one rented or owned. During the late 1990s and early 2000s, housing prices were rising 10 percent to 20 percent or more per year, depending on where in the country one lived. Yet, according to the Economic Policy Institute, wages have grown only six percent since 1979, after accounting for inflation. In more recent years, real income for the median household has been level or declining each year since the recession that began in 2008, according to the U.S. Census Bureau. In 2014 that number remained 6.5 percent lower than it was in 2007. More than 55 percent of American adults—approximately 138 million people—are struggling financially, reports the Stewards of Affordable Housing for the Future (SAHF). Unless wages begin to rise or affordable rents become more available, there will be no housing relief in the foreseeable future for millions of families.

Unaffordable Housing: A Root Cause of Social Inequality


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