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The Affordable Housing Blues: What’s a State to Do?

By Kelley Griffin  |  September 22, 2022

Every state faces housing shortages and homelessness, and the solutions are costly and complex—but it would be more costly to allow the problems to persist, experts say.

“Housing availability and affordability are two key issues of our time,” says Jennifer Ustynoski, director of intergovernmental affairs with the National Association of Home Builders. She was one of a panel of housing experts speaking to a session at the NCSL Legislative Summit.

Housing availability and affordability are two key issues of our time.
— Jennifer Ustynoski, National Association of Home Builders

For starters, virtually no community can claim it has enough affordable housing. Freddie Mac estimates the housing supply was short 3.8 million units before the pandemic. By 2020, only 64,000 entry-level homes were built—one-fifth the pace of previous years. 

The increase in rental rates has outpaced inflation in recent years, according to the Pew Research Center. Pew notes that in 2020, 46% of American renters were spending 30% or more of their income on housing, and 23% of them spent at least half their income, leaving little left over for other costs of living. 

Even if cities and states were ready to foot the bill for all the housing they need, the construction industry couldn’t meet the demand because it can’t find enough workers to train. Ustynoski says the industry will need to add 740,000 new workers in each of the next three years to meet demand. 

And the cost of that housing? Supply costs are up 20%, primarily due to supply chain issues, Ustynoski says. 

When housing is meant for people experiencing homelessness, there’s more to consider. Annie Bacci of the Corporation for Supportive Housing says that to address the struggles that landed them on the street in the first place, homeless people will likely need support such as addiction or mental health treatment and job-placement and life skills.

Action at All Levels Needed

The panelists say it will require action at every level of government to address the housing crisis. 

Ustynoski says NAHB is pushing Congress to revise trade agreements with Canada, which could help ease lumber shortages. Another big factor in housing costs is regulations, which she says can add 25% to the cost of homebuilding, even more for multifamily units. NAHB believes many regulations could be revised to save money without posing risks to homeowners. 

She noted the association has created a portal to make it easy to find state and county housing data. 

Ustynoski says given the massive number of jobs the building industry needs to fill, the association is actively working to reach potential workers—starting in grade school. It’s teaming up with groups like the Boys & Girls Clubs of America and has produced a book aimed at young women titled “The House That She Built.” 

“It’s too late when you start doing training programs just in the high school, or they just find out about it when they’re leaving high school,” she says.

Garth Reiman, is director of advocacy and strategic initiatives for the National Council of State Housing Agencies, which coordinates affordable housing advocacy for the nation’s state housing finance agencies, or HFAs.

Reiman says that in many states HFAs are directing federal pandemic relief funds into affordable home loans, rental assistance and home improvements to make existing housing stock more livable and energy efficient. 

He says HFAs have provided more than $33 billion for over 150,000 single-family home purchases and have issued more than $14 billion in bonds to create and preserve over 160,000 affordable rental apartments. They also are administering more than $20 billion in pandemic funds for emergency rental assistance and managing federal financing and housing counseling for low-income homebuyers in many states. 

“Their activity level is one of the reasons why we really think of them as being at the center of the affordable housing delivery system,” Reiman says. 

The Treasury Department recently issued new guidance to expand the use of federal pandemic relief for affordable housing, Reiman says. States and communities will be allowed to fund long-term loans, and as those are paid back, the money can be used to further develop affordable housing.

Reiman says the new guidance will unlock financing to boost affordable housing construction, and HFAs are working on how to make the best use of it depending on state and local plans.  

Kelley Griffin writes and edits for NCSL.


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