Housing affordability has become a hot-button issue for policymakers at all levels of government as the shortage of attainable housing expands into traditionally low-cost cities and increasingly affects not just low-income households, but also middle-income, working families.
While it is gratifying to see housing elevated to a top tier issue for the first time in my 30 years of working in this sector, my enthusiasm is tempered when I see policymakers confuse action with results. Namely, I see a concerning pattern of states and municipalities looking for quick Band-Aids solutions, like rent control.
From California's November Prop 10 ballot initiative to Oregon enacting the first statewide rent control law, the pressure is rising for local and state governments to do something—anything—to try and curb the growing crisis. This is creating any number of hurdles, ranging from regulatory to reputational, that only further constrain the industry's ability to deliver solutions in the form of additional apartment homes.
At the close of NMHC's Annual Meeting in late January, we convened a post-conference session on affordable housing. About 250 members joined us for the special session. Members from across the country reported on specific market challenges, gave examples of successful programs at work today, offered up creative, alternative solutions and shared a real desire to be part of proactive and collaborative solutions to this acute issue that threatens to stifle growth in this country.
Moreover, I was delighted to learn about—and in some cases meet—the teams that some members have set up within their own organizations to research these affordability issues and help develop better solutions. It's further testament to how seriously you all are taking these challenges.
In the weeks since the event, I keep coming back to a few things that were discussed at the session.
First, there's no question that our industry's reputation is at risk as these policy debates continue to emerge. I don't have to tell you about the benefits of the apartment industry. Our industry houses 38.7 million people. We own, manage and pay property taxes on 20.7 million apartment homes. We have built an average of 312,000 new apartments every year for the last five years. Together with our residents, the apartment industry contributes $1.3 trillion to the U.S. economy and supports 12.3 million jobs. That's amazing stuff.
But these facts are mattering less and less, as are the data—stagnant wages, rising costs, chronic underbuilding—that add up to today's affordable housing shortage. More upsetting is that the tone of the dialogue has turned rather acrimonious in some places, with apartment developers and owners practically cast as villains in this dramatic narrative.
Further fueling this is the spotlight that's shining on stories of displacement and eviction. For example, did you know that there is now an Eviction Lab website, with data on the top areas for evictions and—coming soon—the top evictors? And with the folks behind the website touting the 2.3 million filings, not the one million actual evictions, the headlines are likely to be ugly.
Second, we need holistic solutions that address both new and existing supply. During our session, there were suggestions on how to improve efficiencies in existing programs and processes, thoughts on new financing solutions and discussions on various incentives and voluntary programs. The common thread among all the ideas shared that day is that they were all supply-side solutions. The end goal was either the production or preservation of affordable apartments.
We need to continue to push for solutions that recognize the fundamental shortage of affordable homes and aim to begin to close that gap between the supply and the demand. Policies like rent control, rent caps or so-called anti-gouging measures do absolutely nothing to address this fundamental issue. We have to keep reminding people of that.
To that end, I'm excited to announce that we'll be publishing a series of upcoming blogs that explore a number of possible affordable housing solutions—including some of the ideas surfaced at our January session. We see this as an opportunity to highlight model programs as well as gather industry feedback on some possible new initiatives.
This will be in concert with the upcoming release of the NMHC Housing Affordability Toolkit in May at our Spring Board of Directors Meeting in Chicago. We offered a sneak peek of the new resource at our post-Annual Meeting affordability session. It is a resource to help you guide local, policy-based conversations around housing affordability. Not only does the toolkit outline the major factors underpinning today's affordability crisis, but it also explores the economics and consequences of a variety of policy solutions and includes eight market spotlights.
We think this will be an important tool, as we continue to educate policymakers, housing advocates and neighborhood stakeholders about our industry and the current affordability challenges. I remind you all that www.WeAreApartments.org is also great resource for pulling numbers on estimated apartment demand, construction activity, economic impact and more—and much of the data is available by state, as well as on a local level for 50 metro areas.
As always, we welcome all member feedback on our ideas and products as we roll them out. And if you've got great examples of programs and policies that are working—or not working, as the case may be—in your area or new ideas for workable solutions to the affordability challenges we face today, I'd love to hear them.
- Real Estate Coalition Letter to House Financial Services Committee on Affordable Housing
- Office Conversion Legislation Introduced in the Senate
- Middle-Income Housing Tax Credit (MIHTC) Fact Sheet
- Rent Control Fights Across the Country
- Multifamily Units Under Construction are Up, But Demand for Apartments Remains