A Decade of Rental Housing Vulnerability

Negative Affordable Housing Policy Impacts

Owing to the past decade of significant economic and political swings, not surprisingly, survey participants perceived several policies and trends to have exacerbated housing vulnerability for lower-income individuals and households. • Reduced federal support for housing during most of the last decade. Beginning with the 112th Congress in 2011, HUD experienced either real or nominal funding cutbacks in many of its programs, including the HOME and the Community Development Block Grant programs that have been used to provide gap-filling capital for affordable housing production and preservation. As the federal role was shrinking, cutbacks in state and local budgets due to fiscal stresses, beginning during the Great Recession, meant the overall level of public support for affordable housing shrank. • Suspension of Fannie Mae and Freddie Mac’s equity investments in Low Income Housing Tax Credit (LIHTC) properties upon entering conservatorship in 2008, cited as one trigger for the Great Recession, was viewed as one of the events with the most negative impacts. • Reduced prices for LIHTC as a result of lowered corporate tax liabilities stemming from the 2017 Tax Cuts and Jobs Act and the suspension and ultimate rescission of the Affirmatively Furthering Fair Housing rule. Any action imperiling LIHTC is a tremendous blow as research shows that children whose families use rental assistance to move to lower-poverty neighborhoods are substantially more likely to attend college and earn more as adults.¹ Further, additional years spent in LIHTC housing as a child is associated with an average 3.9 percent increase in the likelihood of attending a higher education program for four years or more, and a 5.2 percent increase in future earnings.² Similarly, for each additional year a teenager’s family used a voucher or lived in public housing they had higher earnings as an adult.³ • Increasing number of higher income renters. The economic boom throughout much of the 2010s brought many higher-income households into center cities, increasing the demand for housing in often limited geographic areas. • Minimal multifamily construction during the Great Recession led to an undersupply of new rental units, with new construction targeting the luxury market and with little older supply trickling down to more affordable levels. Enhanced demand from people willing and able to afford higher-priced housing led to the conversion of many previously affordable rental units into upper market condominiums or apartments. • Tight lending conditions (“credit box”) made it hard for wealthier would-be homeowners to get mortgages, keeping rental demand tight.

The NHP Foundation & Enterprise Community Partners | A Decade of Rental Housing Vulnerability 5

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