NHPF-Authored Articles & Industry Reports

3. Foster Creation/Expansion of Automatic Stabilizers for the Housing Market

Given the difficulty of passing meaningful and impactful legislation during periods of pronounced economic or political strain— such as severe economic downturns or public health emergencies—Ingrid Gould Ellen, NYU Professor of Urban Policy & Planning and Jenny Schuetz, Senior Fellow, Brookings Institute, recommend policies which act as automatic affordable housing stabilizers, beneficial in delivering much-needed and immediate support.

These include making the Tax Credit Exchange Program permanent to facilitate the exchange or return of unused tax credits for cash grants in the event the LIHTC market should bottom out, as occurs during severe economic downturns. Alternatively, automatically increasing allocations of housing vouchers when unemployment rates cross a certain threshold would inject much needed capital into affordable housing markets while supporting residents in a timely fashion. Such automatic stabilizers can be tailored to fit the needs of all stakeholders in the ecosystem while side-stepping the often arduous congressional approvals needed for fresh legislation to address individual crises. 4. Enhance Capital Support, Crucial to Addressing Need Survey participants generally considered the most effective programs to be those that focused on increasing the supply of affordable homes. These policies have taken the form of capital support, such as the TCAP and credit exchange and the Rental Assistance Demonstration (RAD) programs. The former, enacted as part of the American Recovery and Reinvestment Act in 2009 and helped stabilize tax credit-financed housing developments whose future was in jeopardy due to frozen capital markets, was the highest-ranked program implemented during the Great Recession. 7 While TCAP and Exchange was a short-term program designed specifically for a moment of crisis, RAD, which still bears a “demonstration” moniker, has scaled significantly over the past decade, a testament to the value of the program. RAD facilitates private investment in public housing developments, helping to preserve their affordability and habitability for the long term. The program encourages partnerships between public housing agencies, who contribute land to the deals, and mission-aligned nonprofit and for-profit developers, who provide the necessary capital to rehabilitate or redevelop affordable homes on the land.

A Decade of Rental Housing Vulnerability

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