The housing affordability crisis keeps rolling on, dragging down otherwise booming local economies. A survey for the Boston Chamber of Commerce found that nearly one-third of young people say they plan to leave because of high home prices. The Massachusetts housing chief bemoaned: “That’s our workforce.”
“That’s your favorite restaurant that can’t find enough help to stay open,” he wrote in the Boston Globe. “That’s the child-care provider you drop your kids off with. . . . That’s the large company considering moving out of state. That’s our economy.”
Runaway housing costs are impacting homebuyers and renters alike, not just in Boston but nationwide. According to the Joint Center for Housing Studies at Harvard University, the number of cost-burdened renters hit a record high with half of all households spending more than 30 percent of their income on rent and utilities.
Young people aren’t the only ones affected by the current crisis. The US population of people over 65 is ballooning past 60 million, and most of those people will be on fixed incomes while managing rising health care costs.
The Lincoln Institute is well-attuned to this extraordinary challenge, and recently dedicated our annual Journalists Forum to the subject of affordable housing. It was a lively series of conversations over two days, with some 30 reporters, editors, podcasters, and Substack columnists sizing up the problem and assessing the impact of several current policy interventions. This episode of the Land Matters podcast features highlights from the event.
The 2023 Journalists Forum: Innovations in Affordability was made possible by a partnership with the Joint Center for Housing Studies at Harvard University and TD Bank. The annual convening bridges the media and academic inquiry, allowing journalists to explore new ideas with researchers and practitioners and to network with each other.
The forum was organized by first looking at the scope of the crisis, followed by an assessment of four major interventions: statewide zoning mandates requiring cities and towns to allow more multifamily development; tax policy designed to help manage runaway land prices and real estate speculation (with Detroit’s efforts to establish a land value tax as a case study); local strategies to outmaneuver institutional investors; and potential changes in the home financing system to help close a stubborn racial wealth gap.
Arthur Jemison, director of the Boston Planning and Development Agency, delivered the keynote address, describing the city’s “all of the above” approach to increasing housing supply, including legalizing accessory dwelling units or ADUs, embracing a citywide rezoning initiative known as “Squares and Streets,” and offering big incentives to property owners who convert vacant office buildings to residences.
Cities like Boston are going to need all that and more. According to the State of the Nation’s Housing report issued annually by the Joint Center for Housing Studies, home construction hasn’t kept pace with demand ever since the Great Recession. Prices are up 40 percent nationwide, inventory is tight, and it appears the era of low interest rates is decidedly over.
Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters podcast, and a contributing editor of Land Lines.
Lead image: Chris Arnold of NPR moderates a panel on housing finance at the Lincoln Institute Journalists Forum with (l-r) Jim Gray of the Lincoln Institute, MJ Hopkins of TD Bank, Chrystal Kornegay of Mass Housing, and Chris Herbert of the Joint Center for Housing Studies at Harvard University. Credit: Anthony Flint.
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This multimedia case examines the impact of Burlington, VT’s affordable housing strategies on the Old North End (“the ONE”)—a historically low-income neighborhood which boasts a robust stock of affordable housing while facing rising costs of living and demand for housing. It traces the history of Burlington’s efforts back to the 1980s, when the city government under then-mayor Bernie Sanders established programs and policies to produce affordable housing and combat gentrification and displacement.
Cohen, Helen, and Lipman, Mark. 2016. Arc of Justice: The Rise, Fall and Rebirth of a Beloved Community (documentary film). https://www.arcofjusticefilm.com/.
Opportunity Insights. “Neighborhoods Matter: Children’s Lives Are Shaped by the Neighborhoods They Grow Up In.” Online Research Collection. Cambridge, Massachusetts: Harvard University. https://opportunityinsights.org/neighborhoods.
This RFP will open for submissions on March 7, 2024, and close on April 11, 2024. See the application guidelines for additional information on evaluation criteria, expected budget ranges, and further context.
The Lincoln Institute of Land Policy invites proposals for original research that examines the challenges and implications of land-based climate change mitigation responses to promote more effective and equitable action. The geographic focus is global, with particular interest in proposals from a developing context. Proposals will be reviewed competitively according to evaluation criteria. The output is expected to result in a document that could become a Lincoln Institute Working Paper appropriate for publication.
Proposals must align with at least one of the four themes outlined below.
Theme 1: Translate Lessons from Closely Related Fields Past large-scale land-based interventions and extractive industries, such as wildlife conservation, large dams, and mining, demonstrate that policies and programs often fail to consider local contexts and can amplify existing international and domestic power disparities. These past interventions and industries have been examined extensively via diverse academic disciplines, including rural sociology, development economics, anthropology, and geography. Such in-depth review has generated lessons, analysis, and policy recommendations that can be applied to the emerging field of land-based climate mitigation.
This research theme aims to apply the knowledge, history, and policy recommendations from existing research of analogous past large-scale land-based interventions to help minimize the pitfalls of land-based mitigation. Through documentation and analysis, the research should identify lessons and propose recommendations for land-based mitigation.
Theme 2: Emerging High-Level Policy Frameworks and Their Implications for Land-Based Mitigation Policy decisions that drive the financing and implementation of land-based mitigation occur at a very high level, largely removed from any local context. Ongoing negotiations and decision-making create frameworks that establish expectations, objectives, and rules for defining and undertaking land-based mitigation activities. Such frameworks, which include voluntary carbon markets, Article 6 of the Paris Agreement, net-zero pledges, and nationally determined contributions (NDCs), affect how, where, at what scale, and by whom land-based mitigation is implemented and its potential consequences.
This research theme aims to analyze these frameworks, including the context in which policies and decisions are made, to understand how they are evolving and to identify the emerging policy implications. Implications could relate to emerging national and subnational legislation and regulations on carbon markets, land tenure reforms, or new processes that include local and Indigenous communities in decision-making, among many others.
Theme 3: Understanding Current Trends While international and national policies are still in development, momentum is building around land-based mitigation strategies and resulting in developments on the ground, from proposals to implementation. Land-based mitigation objectives directly drive these large-scale projects, agreements, and proposals. This research theme seeks to identify and examine such developments, including their challenges, benefits, and implications for local communities, and to extract lessons and insights to guide future work.
Theme 4: Evaluating Alternatives to Carbon as a Commodity Several less-carbon-centric alternatives that recognize the wider benefits and demands on land more wholly have been offered. Among these are agricultural systems (agroecology, regenerative agriculture, etc.), conservation methods (ecosystem restoration, mosaic restoration, pro-forestation), and rights-based approaches (Indigenous and community-based land stewardship), all of which have been, to some extent, applied, so evidence of their potential benefits and challenges exists. The focus of this research theme is reviewing these alternative approaches, assessing them, and comparing them to other emerging methods. Results from this research theme should help identify viable land-use policies to support effective and equitable land-based mitigation strategies within an earth system governance framework.
RFP Schedule
Application deadline: April 11, 2024
Notification of accepted proposals: May 2, 2024
First progress report*: June 30, 2024
Second progress report: October 17, 2024
First draft: December 20, 2024
Final deliverable(s): May 1, 2025
*We recognize the early timing of this deliverable. The first progress report is intended to show initial advancements and share early project updates, such as data collection or engagement plans. We do not expect it to contain significant findings.
Evaluation Criteria
The Lincoln Institute will evaluate proposals based on the following criteria:
Relevance to at least one research theme identified in the RFP guidelines related to the benefits, challenges, and implications of land-based mitigation strategies.
Quality of the proposed methodology and sources of data.
Qualifications of the members of the research team.
Feasibility of project completion within the stated timeline and budget justification.
El curso de Financiación Urbana y Políticas de Suelo examina las alternativas que ofrecen la gestión del suelo y la movilización de plusvalías para atender algunos de los principales desafíos que enfrentan los gobiernos subnacionales, como son la financiación de infraestructuras de movilidad y la provisión de vivienda asequible. Se centra en la experiencia colombiana analizada en el contexto de América Latina, y combina la discusión de aspectos conceptuales interdisciplinarios con la revisión de experiencias y casos de estudio.
El curso, además, promueve espacios de debate, análisis comparativos, aproximaciones al enfoque de desarrollo urbano orientado al transporte sostenible (DOT), y ejercicios de medición de las plusvalías y sus posibilidades de movilización, al tiempo que analiza los principales instrumentos de planificación y gestión en el marco de la financiación basada en el valor del suelo que han sido aplicados en Colombia. En el último día del curso se realizará una visita técnica para observar proyectos de movilidad, gestión del suelo, y vivienda de interés social en la ciudad de Bogotá.
Relevancia
Las ciudades de América Latina y el Caribe enfrentan grandes desafíos para orientar y financiar sus procesos de desarrollo urbano, ante los cuales la planeación territorial y el fortalecimiento de fuentes de financiación basada en el valor del suelo ameritan especial atención y consideración.
Colombia es uno de los países en la región que cuenta con marcos legales que proporcionan una base para la implementación de instrumentos de gestión y financiación base suelo. La experiencia colombiana permite identificar y evaluar avances, aprendizajes y alternativas para aportar a la discusión sobre el uso de estos instrumentos en América Latina. El curso aborda el potencial de los instrumentos en relación con dos aspectos específicos: la movilidad y el acceso a vivienda asequible, en el marco de la planeación territorial en Colombia.
Climate Mitigation, Environment, Housing, Land Market Regulation, Land Use, Land Use Planning, Land Value, Land Value Taxation, Legal Issues, Local Government, Municipal Fiscal Health, Planning, Public Finance, Public Policy, Transport Oriented Development, Transportation, Urban, Urban Development
Course
Diplomado en Estudios Socio-Jurídicos del Suelo Urbano
El Diplomado en Estudios Socio-Jurídicos del Suelo Urbano se promueve por séptima ocasión, gracias a la efectiva colaboración entre el Instituto Lincoln de Políticas de Suelo y el Instituto de Investigaciones Sociales de la UNAM. El prestigio del programa se evidencia en la trayectoria de los más de 150 estudiantes egresados, que hoy conforman una red de profesionistas de alto valor, si se mira como el origen de alianzas estratégicas en el entorno laboral, académico y de amistades.
El abordaje de los temas jurídicos, vistos en el contexto de la formación de las políticas y de los conflictos, permite acceder a un conocimiento más profundo de dichos problemas en relación con lo que ofrecen los manuales convencionales de derecho urbanístico.
El programa está dirigido a profesionales que tengan estudios de licenciatura concluidos (o a punto de concluir) en alguna disciplina afín al diplomado que se desempeñen profesionalmente, o tengan la intención de hacerlo, en el sector público, el privado o el social y en actividades vinculadas al desarrollo urbano sustentable. Es una oferta académica única en la región latinoamericana, que cubre la necesidad de fortalecer capacidades institucionales desde una visión que integra economía urbana y derecho urbanístico.
Agradecemos su interés por formar parte de esta red latinoamericana, y le invitamos a atender cuidadosamente los puntos de la convocatoria.
Climate Mitigation, Economics, Housing, Land Law, Land Market Regulation, Land Value, Legal Issues, Local Government, Municipal Fiscal Health, Public Finance, Public Policy, Urban Development, Valuation, Value Capture
2023 Journalists Forum: Innovations in Affordability
More than 30 reporters, editors, podcasters, and Substack writers attended the Lincoln Institute of Land Policy’s 2023 Journalists Forum, engaging in two days of conversations about the problem of housing affordability and the impact of current policy interventions.
The 2023 Journalists Forum: Innovations in Affordability was held November 17–18 in Cambridge, Massachusetts, in partnership with the Joint Center for Housing Studies at Harvard University (JCHS) and TD Bank. The annual convening bridges the media and academic inquiry, allowing journalists to hear new ideas and network with each other.
Researchers, scholars, practitioners, and appointed and elected officials shared perspectives on recent policies aimed at increasing the supply of housing. The group considered statewide zoning mandates that require cities and towns to allow more multifamily development; tax policies that can help manage runaway land prices and real estate speculation (with Detroit’s efforts to establish a land value tax serving as a case study); local strategies to outmaneuver institutional investors; and calibrating the home financing system to help close a stubborn racial wealth gap.
Local Strategies, a Nationwide Crisis
Arthur Jemison, director of the Boston Planning and Development Agency, kicked off the proceedings by describing Boston’s “all of the above” efforts to address affordable housing, a major issue for the entire region.
On the supply side, Jemison said, the city is looking to allow accessory dwelling units (ADUs) as of right in the city’s Mattapan neighborhood to start, coupled with low- or zero-interest financing programs for residents, and to upzone transit-oriented neighborhoods citywide through a “Squares and Streets” initiative.
The city is also pursuing “a very deep tax incentive” for property owners who convert vacant office buildings to residences, Jemison said. Global architecture firm Gensler surveyed downtown Boston, “and they found about 60 great candidates for office-to-residential conversion,” he said. “We think that maybe 10 percent, maybe 15 percent of those buildings could be and will likely be converted with this incentive.”
Daniel McCue, senior research associate at the Joint Center for Housing Studies, then set the stage for the next two days of discussions by detailing worrying trends in home prices and rents, pulled from the JCHS’s annual State of the Nation’s Housing assessment. Home construction hasn’t kept pace with demand since the Great Recession, McCue explained, but low interest rates kept monthly mortgage payments somewhat affordable even as home prices climbed amid the scarcity.
That dynamic, though, has changed.
“Over the past two and a half years, we’ve seen prices go up 40 percent nationwide,” he said. “That’s combined with a rise in interest rates that has really ratcheted up mortgage costs,” adding $1,200 a month to the average homebuyer’s mortgage payment. “That’s the carpet getting pulled out from under you if you’re a millennial, maybe even a Gen Z-er.”
Zoning Reform
As more states from California to Connecticut pursue statewide zoning reform in an effort to boost housing production, density, and affordability—prompting backlash from local governments seeking to retain control over land use—the issue of upzoning mandates and the impact of increased density was deftly taken up by a panel including Jessie Grogan, associate director of reduced poverty and spatial inequality at the Lincoln Institute; Jenny Schuetz, senior fellow at Brookings Metro; Patrick Condon, professor of urban design at the University of British Columbia; and David Garcia, director of the Terner Center for Housing Innovation at the University of California, Berkeley.
Moderator and urban policy writer Diana Lind asked Grogan to start by explaining why some states are looking to override local zoning rules. Housing is often a regional problem, Grogan said, “but most of the tools that we’re given to address that problem are at a local level.” In a sense, she noted, that geographic mismatch creates more of a politics problem than a policy one.
“We’ve created this system of perverse incentives—particularly for the more affluent, higher opportunity places—where current residents, even if they acknowledge the need for more affordable housing and more housing supply more broadly at a regional level, it’s really in their best interest to keep the gates up,” she added. “If housing supply is low, property values remain high. . . . It’s great for them, it’s terrible for the region.”
As a result, Grogan said, there are now quite a few states either passing or actively discussing statewide zoning policies that generally aim to do one of three things. “First, they try to boost overall housing supply. Second, they try to increase the amount of inexpensive and below-market-rate housing. Third, they try to build housing in strategic places, like near transit.”
Developers need to wait for their municipality to write and pass new state-compliant zoning rules before they can apply for permits, she explained, and some communities—like those in Massachusetts that have pushed back on the state’s MBTA Communities Act—put up a fight. “It’s not unusual for it to take three to five years from the state law passing until you actually have local zoning that’s compliant,” Schuetz said.
“We would like to think, ‘Oh, the state now legalized a bunch of new housing, you can build apartments near transit stations, so how many apartments are getting built?’ And of course the answer is, well, so far, none—because we don’t actually have local zoning in place,” she said. “It’s going to take a couple of years before we start seeing even the early stages, like developers requesting permits for these apartments.”
That said, while some communities may push back or even sue the state in response, many others acknowledge the problem and are willing to comply. And state policies can give cover to local officials who want to upzone but fear political blowback.
“A forward-looking mayor or city council can go to their voters and say, ‘Hey, the state is telling us we have to allow apartments, we have to allow duplexes. We know that we have an affordability problem, that many of the kids who grew up here can’t move back to the community because it’s so expensive, so we’re going to take this opportunity and lean into the idea and figure out on our terms what works for us to comply with the state mandate,’” Schuetz said.
Urban policy writer Diana Lind, left, moderated a conversation about zoning reform with Jessie Grogan of the Lincoln Institute, Jenny Schuetz of Brookings Metro, Patrick Condon of the University of British Columbia, and David Garcia of the Terner Center for Housing Innovation at UC Berkeley. Credit: Anthony Flint.
Condon, who has studied housing affordability in Vancouver for decades, raised a contrarian point: There are lots of good reasons for zoning reform and increasing density, he said, but affordability is not one of them.
“We have doubled the number of people per square kilometer in the city since 1970; there is no other center city that I’ve been able to find in North America that’s come even remotely close to the addition of new supply,” Condon said. “If adding supply was going to reduce prices, Vancouver should have the cheapest housing in North America. It now has the most expensive housing in North America.”
And so the question, Condon continued, is why the additional supply didn’t help affordability. “The answer seems to be that land prices absorbed all the benefit of that new supply,” he said. “Because the capacity of those parcels was increased in terms of the financial return, it’s reflected in this tremendous rise in land value.”
Condon pointed to Cambridge, Massachusetts, as one community taking the right approach: Its 100 percent Affordable Housing Overlay allows extra density in exchange for assured, permanent affordability. “The wrong thing is just to increase allowable density and think that that’s going to solve the problem,” he said. “The right thing is to figure out ways to capture that new land value increase in the context of rebuilding these neighborhoods.”
Municipalities should insist on affordability “to discipline the land market, which is out of control,” Condon concluded. “A lot of the initiatives that we’re talking about today do the opposite—they unleash the land market. It’s a fundamentally different philosophy of how to solve the problem.”
The impacts of increased housing supply can be subtle. Grogan pointed to Minneapolis, where Pew Research has been tracking rents since the city legalized triplexes on all residential lots and did away with parking requirements. While rents increased 31 percent nationwide between 2017 and 2023, they were up just one percent in Minneapolis. “It’s very, very, very early in their experiment of increasing density, but they are finding that their rent prices are not increasing as steeply as other places in the country,” she said.
As the conversation turned to California, where some 200 new statewide housing policies have emerged since 2016—including preempting local zoning to allow ADUs by right on nearly all residential lots— more evidence was available to analyze. The Terner Center at UC Berkeley has been tracking the passage of California’s zoning interventions and housing laws, Garcia said, and the results have been mixed.
Legalizing ADUs has been a success, for example, but has proven no match for the larger problem. “ADUs now make up almost 20 percent of new homes permitted in California,” Garcia said, “which seems like a good thing, but also is a little bit scary, because it means the rest of the market is not working.”
Other policies out of Sacramento now require communities to prove they’re planning for significant new housing, and make it more difficult to skirt that obligation. Changes to the state’s density bonus law, meanwhile, allow developers to build higher in exchange for more affordable units, and a bill called Senate 35 allows affordable housing developers to bypass local approval and the “infamous” California Environmental Quality Act.
“Is it working? My very simple answer to that question is not yet, but maybe,” Garcia said. California used to build 200,000 housing units per year, he said. “More recently, even with all of these state-level changes, California hovers at around 100,000 units per year,” he said. “Last year we had 120,000 units. That’s an increase, that’s good—but it’s still lagging well behind the 180,000 units California needs to be building per year.”
Tax Policy
Cities and towns are also considering the effects of their tax systems on housing affordability. A panel including Jay Rising, chief financial officer for Detroit; Nick Allen, a researcher based at MIT; Joan Youngman, senior fellow at the Lincoln Institute; and former Boston assessor Ron Rakow examined Detroit’s proposal for a land value tax to lower residential taxes and encourage development.
About 17 percent of Detroit’s 138 square miles lies vacant, said Rising, and owners of unproductive land pay very little property taxes. “This is incentivized speculation,” he said. Taxing land more than buildings will also lower the property tax burden for many homeowners who have stayed in Detroit and seek to raise their families there. The city, which needs permission from the Michigan state legislature to implement the land tax, is trying to “protect public revenues and public services by making it fairly revenue-neutral. That’s how we got to where we are today.”
Detroiters “are paying the highest property tax rates in the nation, particularly on the housing investments that they own,” said Allen, coauthor of a Lincoln Institute study on the feasibility of splitting the tax rates for land and buildings. “A land value tax, in some ways, is just a neutral tax. Some economists have called it the least bad tax. It taxes an asset that doesn’t move, that when you tax it, it doesn’t chase that asset away. It raises revenue to fund the types of services that cities are providing.”
The theory is that landowners will build housing or make other improvements rather than pay taxes on vacant land. Many are holding on to the land expecting to sell at a higher price, but that speculation is based on an unearned windfall. “If you have a piece of bare land in the middle of Manhattan, you have wealth, but not because of anything you did. It’s because society has grown and there’s demand around you,” said Youngman, author of A Good Tax.
A well-functioning property tax based on market value is also critical to greater equity, the panelists agreed, with many jurisdictions designing property tax relief programs and homestead exemptions to lessen the tax burden in targeted circumstances.
“In terms of tax equity, it’s really important to . . . have a good and solid assessment system where assessments are kept up to date and with targeted exemption programs to make sure that we’re only giving relief where needed, and ensuring that we’re having adequate revenues for our communities,” said Rakow, who analyzed Boston property taxes to test for regressivity.
Policies that are less effective include some urban agriculture exemptions and broad-based tax caps like Proposition 13 in California, the panelists agreed. “The dirty little secret with assessment caps is that far more people pay more in taxes than they would if there were no cap at all,” said Rakow.
Institutional Investors
In one of the liveliest discussions at the workshop, the issue of institutional investors—large companies that are buying, flipping, or charging high rents for properties in weak real estate markets and elsewhere—was subject to a thorough examination.
Cincinnati Mayor Aftab Pureval, appearing on video, touted the use of a Port of Cincinnati bond issue to outbid institutional investors for control of nearly 200 properties across several neighborhoods.
“We have an aging built environment, aging buildings and aging single-family homes. That reality, combined with the fact that we’re an affordable city in the national context, has made us a key target for predatory institutional investors,” Pureval said. “Like other cities, we’ve seen a trend of bad-acting out-of-town corporations coming in to buy up huge swaths of single family homes, not doing anything to invest in them, and then jacking up the rents overnight. This practice contributes to pricing legacy communities out of their neighborhoods. It hurts the well-being of the tenants who are being neglected and it has a negative impact on our entire housing market.
“[We] jumped at the chance to get these houses back into the hands of local homeowners,” he said. “Local governments are inherently limited in terms of both resources and our ability to move markets, but I believe that this program has been a strong piece of evidence for the value there is in thinking outside of the box and in leaning in and testing innovative ideas.”
The success in Cincinnati was the result of a thoughtful organization of public finance structures that can be replicated in other communities to preserve affordable housing, said Robert J. (RJ) McGrail, who leads the Accelerating Community Investment initiative at the Lincoln Institute.
The extent of property ownership by institutional investors, covered by many news outlets as a key facet of the housing affordability crisis, can be documented using increasingly sophisticated mapping and data technology, said Jeff Allenby, director of innovation at the Center for Geospatial Solutions.
“What we can do with this information . . . is begin to look at a lot of different pieces and really dig into things like transaction history, layer on other information from the city [including building code violations] . . . to begin to tackle what I call data fusion,” Allenby said. CGS has developed an approach that uses this data to map property transactions, in some cases revealing swaths of institutional ownership in a single neighborhood.
Jeff Allenby of the Lincoln Institute’s Center for Geospatial Solutions demonstrates how data mapping can reveal patterns of institutional ownership. Credit: Catherine Benedict.
David Howard, CEO of the National Rental Home Council, a DC-based nonprofit trade association that represents the single-family rental home industry, countered that property ownership by institutional investors is a small fraction on a national basis, though he acknowledged it is more concentrated in certain metro areas. While there are some bad actors, he said, outside investors are simply meeting market demand—fueled by a slowdown in construction of starter homes.
“It’s becoming harder and harder to purchase single-family homes. They’re harder to finance. They’re more expensive. There are significant inventory challenges. There’s excess demand for single-family rentals,” he said.
Home Financing
On the second day of the conference, Dan D’Oca of Harvard University’s Graduate School of Design explored how innovative design can promote affordability, summarizing a recent report published by the GSD and the Joint Center for Housing Studies.
The presentation was followed by another lively discussion about home financing. After the Community Reinvestment Act and the financial crisis of 2008, a reset has been in the works, with new programs and policies intended to help both individuals and neighborhoods access capital and to help close the racial homeownership gap. But there is disagreement on how much can be accomplished with policy tweaks versus a more radical reassessment of the $12 trillion mortgage market.
NPR reporter Chris Arnold opened the discussion by noting that if zoning reform and other measures increase housing supply—“as the ice floe breaks up,” as he put it—clearly evident barriers remain for financing homeownership, particularly for low-income families and communities of color.
Chris Herbert, managing director of the Joint Center for Housing Studies, applauded incremental changes that could make it easier for more people to enjoy wealth-building through homeownership, including down payment assistance, making the application process easier, improving the credit score and appraisal process, and making it possible to get financing for ADUs, manufactured homes, and property purchases through community land trusts.
Majurial (MJ) Watkins, community mortgage sales manager at TD Bank, cited the use of special purpose credit programs to expand access to home finance—though there is concern such outreach could trigger a legal challenge on the basis of reverse discrimination.
Jim Gray, a senior fellow at the Lincoln Institute, which is a member of the Underserved Mortgage Markets Coalition, noted that about 70 percent of all mortgages end up with Freddie Mac and Fannie Mae. “The way we change the system is primarily through Fannie and Freddie because they control such a big part of the market,” he said. “If you want to get a system that now recognizes your rent credit in your credit score, well, when you get Fannie and Freddie to do it, that’s when the system changes. That’s why we at the Lincoln Institute feel like it’s so important and we hope that you all will pay more attention to what Fannie and Freddie are doing and how they’re continuing to evolve our mortgage market.”
Also important, he said, are the Duty to Serve rules that govern the GSEs and, as a result, shape the lending criteria used by non-bank lenders, an increasingly prevalent category of mortgage providers that are not subject to provisions of the Community Reinvestment Act.
Will incremental measures be sufficient? Not really, said Chrystal Kornegay, director of MassHousing, an independent, quasi-public agency created in 1966 and charged with providing financing for affordable housing in Massachusetts.
“The current housing finance system is a total creation of the government. When you think about all of the injustices and inequities in that system, it is a total creation of the government. It was all done with intention,” she said. “When we ask questions around why there are homeownership gaps, should you buy a house now, the question is really much more about what can the government do to create a system that’s equal for everybody. They created this system that’s unequal; they can also create a different system.”
Chrystal Kornegay of MassHousing described the government’s role in shaping the current housing finance system and its responsibility to address the racial homeownership gap. Credit: Dakin Henderson.
Kornegay described the MassDreams program, which was supported with American Rescue Plan Act funds and designed to expand homeownership opportunities for people in communities disproportionately affected by COVID by providing down payment and closing cost grants. By providing funds directly to buyers, she said, “all of a sudden, we had 64 percent of people who bought houses were people of color. Seventy-five percent were at 100 percent of area median income and below. It just goes to show what the power of money can do for people who make good decisions.
“What if we, the government, all of us, decided that we wanted to have . . . a whole system for people of color to actually buy houses?” Kornegay said. “We could do that. We know how to do that . . . [but] it’s not going to happen if we don’t make the federal government make it happen.”
Herbert emphasized the important role that housing owned by nonprofits and the public sector can play in expanding homeownership. “We’ve got 11 million renters paying more than half their income on housing, and we think that we’re going to fix zoning and make a little innovation in financing and solve this? No,” said Herbert. “We’ve got to get enough housing for those 11 million people to be able to afford housing, and it’s got to be outside the private market. Because most of that increase in price is land prices. If we get that out of the market, and you have good housing that’s well-financed, over time, we can actually start to have housing for those 11 million people.”
He also noted that the terms “public housing” and “social housing” don’t fully capture the concept of mixed-income, permanently affordable developments. “We need to have this conversation. We need to have a name for it that doesn’t make people think it’s socialist or Swedish,” he said.
A final session reviewed some of the approaches the Lincoln Institute is currently taking to help address the housing affordability crisis in the United States, followed by the traditional concluding roundtable, facilitated by Paige Carlson-Heim from the TD Charitable Foundation and TD Bank’s Shelley Silva, who earlier in her career ran the Philadelphia Housing Authority.
The journalists shared their perspectives on the challenges of being on the housing beat, given the complexities of the different elements of the story, from the dire needs of an aging population to increasingly visible homelessness, to the potential of new forms of government-enabled social housing.
Stories flowing from the Journalists Forum continue to appear, including a dispatch by Josh Stephens in the California Planning & Development Report, “Does Density Lead to Affordability?,” based on the first session on zoning reform; and an editorial encouraging a proposal for legalizing basement apartments in New York City by Mayor Eric Adams in Crain’s New York Business.
“The mayor is in good company,” the editorial states. “As discussed at a recent Lincoln Institute of Land Policy conference on innovations in affordable housing, municipalities across the nation are considering ADUs, which can include apartments fashioned out of garages and other structures, as solutions to housing shortages. One speaker pointed out that the high cost of constructing an ADU, which some local analysts say could run about $400,000, and the fact that federal programs such as Freddie Mac and Fannie Mae don’t help with financing, were major hindrances to getting them into the legal housing stock, with only about 772,000 created across the country since 2015.”
Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.
Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy, host of the Land Matters podcast, and a contributing editor of Land Lines.
Lead image: Lincoln Institute of Land Policy President George W. McCarthy welcomes participants at the start of the 2023 Journalists Forum. Credit: Dakin Henderson.
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