Housing and Cities — A Deeper Look at the Numbers

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Over the last few years, “The Rent is Too Damn High” has grown from a fringe political party in New York to a constant complaint from millennials, seniors, middle-income wage earners, policy wonks and city elected leaders. While housing issues in a growth economy might seem counter-intuitive on the surface, the research tells a much more nuanced story.

One key sticking point for housing analysts is that millennials aren’t buying property at the same rate as previous generations. According to Freddie Mac, which has been tracking this phenomenon, the 2016 home ownership rate for those aged 25 to 34 was three percentage points lower than the historical average, and eight points below the all-time high in 2004.

Freddie’s conclusion was that, despite historically low mortgage rates and favorable employment conditions, rent and home prices are outpacing incomes, and millennials are unable to purchase homes.

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Furthermore, housing affordability, once thought to be only a problem for large urban cities, is now a challenge for less populated areas outside the urban core. According to real estate data-tracker Zillow, the number of renter households in suburban areas between 2011 and 2015 grew faster than the number in urban areas.

This was an especially interesting finding because new multi-family building construction in suburbs is lagging behind development in the urban core. This increase in suburban demand for housing, despite a stagnant supply, pushed rents to levels comparable to the adjacent cities.

It is no wonder then that 39 percent of city mayors identified housing and housing-related issues as a significant topic for discussion in their 2018 state of the city address. Mayor Steve Noble of Kingston, New York, put the issue succinctly: “Regardless of what your income level is – we all need access to good, quality housing that we can afford.”

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To their credit, local leaders do not simply point out a problem. They offer solutions to problems and make the effort to implement them. In Durham, North Carolina, Mayor Steve Schewel reported that his city had approved providing two acres of land adjacent to Durham Station, and $3.8 million, to support construction of 80 affordable housing units downtown.

A push for mixed-use multi-family housing consistent with the local needs was also the direction Mayor Mary Lou Pauly of Issaquah, Washington, took. “In the future, our growth will be redevelopment – adding density and moving away from single-story buildings and expansive surface parking lots, to mid-size and-rise buildings that are designed for mixed-use,” she said.

The National League of Cities supports the work of these and other local leaders by providing examples of best – and most promising – practices relating to housing affordability and homelessness. On our website, there are numerous case studies and publications highlighting local efforts to expand housing affordability. A few of these resources include:

  • From Phoenix: A partnership to acquire, redevelop and operate multi-family housing for low-income families that incorporates access to health services;
  • From Cleveland: An initiative to build permanent supportive housing to end chronic homelessness;
  • From Dublin, California: Development of a mixed-use, mixed-income complex offering several housing types and ownership models that leverage public and private-sector support;
  • From Los Angeles: A small-lot redevelopment ordinance and small lot design guidelines to promote higher density homes on lots previously zoned for one dwelling;
  • Concerning homelessness: A guide for local officials seeking to engage landlords in the effort to house homeless veterans; and
  • Concerning housing affordability as a key factor in expanding prosperity: This report from NLC’s Task Force on Economic Mobility and Opportunity.

Land use planning and housing are core components of any community and are thus an essential focus for local governments. The crushing financial burdens on individuals and families seeking safe, good quality housing near employment opportunities and other amenities is a constant hurdle for city elected and appointed leaders to overcome. Although federal financial supports are dwindling and state mandates on cities are increasing, local officials continue to identify policies, programs and practices that increase the availability of housing for people of all income levels.

As evidenced from this year’s state of the city addresses, innovation and creativity at the local level know no bounds.

Jim-Brooks-small.jpgAbout the Author: James A. Brooks is the City Solutions Director at the National League of Cities. He also is the Director for NLC’s International Programs. Mr. Brooks joined the staff at NLC in November 1988 and has held previous positions in membership services, public affairs and policy development.