Earlier this year, three Democratic presidential candidates - Senators Cory Booker, Kamala Harris, and Elizabeth Warren - released plans for solving the affordable housing crisis. Two more 2020 hopefuls, former HUD Secretary Julian Castro and Any Klobuchar have more recently released affordable housing plans. I have been involved in affordable housing at the national level since 1977 and have never since this much attention to the issue during a presidential campaign.
While virtually everyone agrees that housing costs - especially rents - are too high, there is no clear fix to the problem. In fact, in a time of hyper-partisanship, there is not even a clear partisan divide on the affordability crisis. While the Democratic hopefuls are staking out their territories on affordable housing, the Trump administration is in the process of developing its own plan, and sources familiar with the work say that it will be similar to the plan espoused by pro-growth progressives.
Lately, cities across the country have zeroed in on local land-use regulations as an answer to the affordable housing crisis. By lifting restrictive zoning codes, a strategy known as "upzoning," some cities and states hope to increase the supply of housing and encourage growth in racially segregated areas dense in amenities such as parks and quality schools. Minneapolis, MN is trying this approach and made news in December 2018 by eliminating single-family zoning.
No matter how hard they try, cities and states cannot solve the affordable housing crisis on their own. This is - and should be - the job of the federal government. With the Fair Housing Act of 1968, Congress set a policy that requires communities that receive federal housing funds to actively seek to end segregation - also known as "affirmatively furthering fair housing." Communities could do so by building affordable multifamily housing in wealthier areas (something strongly resisted in the wealthier areas). In the 50 years since, that policy has rarely been enforced. In fact, the Trump administration delayed a formal rule on the Affirmatively Furthering Fair Housing policy in 2018.
Zoning has been left to state and local governments, and until the recent trend in upzoning, those governing bodies have been content to let neighborhoods control the process. As a result, zoning rules are typically written by affluent white men who own homes, and for the benefit of wealthy white neighborhoods.
Zoning is the primary target for the Democratic presidential candidates who have released housing plans so far. Booker, Harris, and Warren have taken different approaches, using a combination of incentives and penalties, to encourage communities to increase their permitted development density. Their strategies are still evolving.
Booker favors the stick over the carrot. Previously, the Senator called for using federal Community Development Block Grants (CDBG) to persuade local governments to unlock exclusionary zoning codes. This would punish cities that use zoning to favor incumbent homeowners by denying them federal funds.
The problem with this approach is that CDBG dollars go to large cities and poor cities - not the suburbs that make the most use of exclusionary zoning. Congress cannot take federal dollars away from wealthy areas that do not receive those dollars in the first place.
But Booker’s latest proposal uses a different strategy. His Housing, Opportunity, Mobility & Equity Act would link about $16 billion in various federal funds to local zoning restrictions - including Department of Transportation funding - and targets a much larger pool of money.
While CDBG funding is still in the mix, under Booker’s proposal, communities that do not move forward to create more affordable housing would risk losing money for roads. This gets the attention of even the wealthiest communities, since they all love the federal transportation dollars.
Both Booker and Harris are also promoting a tax credit for renters, which would be paid out monthly. Booker and Warren support features that address historical racial inequities: Booker wants to use "baby bonds" to bridge the racial wealth gap; Warren has designed a down-payment assistance program for historically redlined areas (i.e., those areas that have lagged behind the market in terms of development).
So, why are the politicians now paying attention to affordable housing? Housing affordability has been a problem for poor people for decades. The key is that there are now enough middle-income voters affected by housing affordability in these large costly metro areas that politicians are starting to take notice.
To be successful, housing policy cannot be an "a la carte" menu. There must be a comprehensive, holistic approach that, with federal support, could lead to real movement in terms of affordable housing.
Many of the current candidates (at least on the Democratic side) are committed to expanding the Low-Income Housing Tax Credit (LIHTC) program, increasing rental housing vouchers, and lifting exclusionary zoning codes. All the senators that have heretofore released housing plans have those goals as primary elements of their proposals.
Low-income housing advocacy groups are pushing proposals that are unlikely to gain any mainstream traction, such as:
In mid-July, Julian Castro rolled out his People First Housing program, a three-part plan to address rental affordability, housing discrimination, and homeownership. His plan would turn the Housing Choice Voucher program into a fully funded federal entitlement for very low-income households, ending waitlists for Housing Choice Vouchers by granting automatic aid to families who qualify. Castro also calls for the creation of a Presidential Committee on Zoning Reform, which would tap experts from HUD, as well as the Departments of Transportation, Justice, and the EPA.
Another reason for the new found interest in affordable housing is that it keeps coming up at forums and town hall meetings. When the voters speak, candidates tend to listen.
Clearly, the Democrats are calling for a lot of new spending on housing. But even if one of these plans comes to pass, housing will remain primarily the province of state and local government. It is subject to bitter local debates about how best to balance the needs of older, wealthier, white homeowners and those of younger, less affluent renters who are more likely to be black and brown.
Based on current reporting, the Trump administration is working on its own housing plan, a joint project between HUD and the Domestic Policy Council, the primary domestic policy forum for the White House. The scant information that has been released so far indicates that the plan will promote zoning deregulation and will not focus on addressing housing affordability specifically.
Last August, HUD Secretary Ben Carson told The Wall Street Journal that his department was looking to tie HUD grants to less restrictive zoning. While this is a common theme among housing advocates, using the power of the HUD purse to push local governments to adopt less-restrictive zoning policies runs into a significant problem - few of the most exclusive communities receive enough in housing grants for withholding these funds to affect their decision-making. A more aggressive approach, such as that proposed by Senator Booker in the withholding of road and transportation funds so cherished by exclusive communities, unless they choose to be less exclusive - could tilt the potential for success in the direction of housing advocates.
However, if such a step is taken, all hell will break lose. There are already raging housing debates across the country with exclusive enclaves pushing back against progressive pro-growth zoning policies. Withholding federal transportation funds as a condition of zoning is sure to meet with concerted resistance in these communities.
Advocates for density, affordability, and solutions for homelessness hope that the 2020 election is an opportunity to elevate the profile of housing as a political issue. Democratic candidates are showing that they think housing is a key 2020 issue.
As the campaign season wears on, I will be examining the housing plans of each of the candidates and will do my best to keep my readers informed of what is being proposed. One thing is certain, in 2020 - regardless of who is elected - affordable housing is likely to take its place as one of the nation’s most significant issues; it is an issue those of us in the industry need to pay close attention to.
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