Mayors across the country unanimously expect demand for affordable housing to increase in the next 12 months.
But even as economic conditions improve and the homeless population declines in many locales, U.S. cities are still far from meeting the housing needs of their most vulnerable residents.
“The demand for affordable housing far exceeds the availability in the city of Miami, especially with elderly residents who live on fixed incomes or small retirement incomes,” says Mayor Tomás Regalado. “This is evident by the long waiting lists of low-income families applying for Sec. 8 housing and low-income units in tax credit projects.”
Regalado was among 15 mayors affordable housing finance canvassed for this story.
America’s mayors are a prime source of knowledge about what’s happening in the nation’s cities. They stand on the front lines of the affordable housing crisis and are among the first to see the long lines of people waiting for housing. In addition, their votes can lift or sink proposed housing projects, not to mention determine how limited public funds are spent.
And the importance of affordable housing is only growing: 77% of the mayors we surveyed say affordable housing is becoming more of a priority; the other 23% say it’s always been a top issue.
“Rents continue to rise in our region, so much so that it can be a deterrent to [local] companies trying to recruit and retain talent, which then has an economic impact on our city (declining revenues), which makes it difficult to tackle other issues, like public infrastructure,” says Sam Liccardo, mayor of San Jose, Calif.
Six mayors say their cities’ funding for affordable housing will remain unchanged this year. Four expect a decrease, and three expect an increase.
Charlotte, N.C., is among those municipalities expecting more funding. That’s because voters there recently approved a capital investment plan that included $15 million for affordable housing.
“These locally approved dollars will be deposited into the city’s housing trust fund and used to provide gap financing to affordable housing developers to assist with new construction and rehab existing housing units to be used as affordable housing,” says Mayor Daniel G. Clodfelter.
We look at 10 of the mayors we surveyed and how they’re addressing today’s affordable housing crisis.
Daniel G. Clodfelter,
Charlotte, N.C.
As the population grows in Charlotte, N.C., specifically in low- to moderate-income households, the need for affordable housing becomes more of a necessity, says Daniel G. Clodfelter, who was appointed mayor in April 2014 after Patrick Cannon resigned from office.
“The lack of quality affordable housing in our city has impacted many of our citizens by forcing them to pay more than 30% of their annual income for housing, thus causing a ripple effect in other areas such as transportation, health care, and daycare costs,” Clodfelter tells AHF.
The residents of Charlotte agree, approving a capital investment plan at the voting polls in November that includes $15 million for affordable housing that will be deposited into the city’s Housing Trust Fund. The funds will be used to provide gap financing to affordable housing developers to assist with new construction and the rehabilitation of existing units.
The City Council has also partnered with the Foundation for the Carolinas in a public-private partnership to raise funds for a $20 million endowment that is expected to live in perpetuity. The funding will provide short-term rental assistance to low- to moderate-income families who can achieve self-sufficiency within two years.
Charlotte does not have a mandatory inclusionary housing program. However, the council approved a voluntary mixed-income density program for both multi-family and single family developers. This program applies to areas of the city where there is a need for additional affordable housing.
In addition to providing tools to encourage affordable
housing production, Clodfelter made a
commitment to end veterans homelessness in the city. On Veterans Day, the city,
Mecklenburg County, and the W.G. (Bill) Hefner VA Medial Center accepted the
Mayors Challenge to End Veteran Homelessness. The partners implemented the
Charlotte-Mecklenburg Housing Our Heroes initiative, which seeks to house the
area’s 204 homeless veterans by the end of 2015.
Michael B. Hancock,
Denver
Denver is one of the nation’s fastest-growing cities, with a population growth of 100,000 in the past decade and another 100,000 expected over the next 10 years. Along with this growth comes the need for additional affordable housing units, and Mayor Michael B. Hancock is making that a priority.
“While the city’s population growth has spiked, the housing stock is simply not keeping pace with the community’s needs,” says Hancock. “I have the audacity to believe that anyone who wants to live in the city should not be forced out because of costs.”
In October, Hancock introduced Housing Denver, a collaborative plan that will serve as a guide for informing the city’s housing policies and resource allocations over the next five years.
In February, the mayor announced the new $10 million Denver Affordable Housing Revolving Loan Fund to boost affordable housing development for households earning up to 60% of area median income (AMI).
And going forward, the city is planning to create a permanent funding source for affordable housing.
“The No. 1 affordable housing priority for Denver is to increase our housing resources,” Hancock says. “This ambitious effort is in the very early stages—we’re undertaking a needs analysis of rental and for-sale affordable housing, we’re developing a modeling tool to help assign costs to address affordable gaps, and we’re carefully exploring various permanent funding source alternatives.”
The mayor also tells AHF he would like to see the city’s
development partners produce more workforce units targeted to households
earning between 60% and 80% of AMI.
Helping that effort, the city updated its inclusionary housing ordinance
last year to make it more effective to produce affordable for-sale units for
households earning 80% to 100% of AMI.
Karen
Freeman-Wilson,
Gary, Ind.
Karen Freeman-Wilson has high hopes of revitalizing her hometown of Gary, Ind. And she’s been making great strides in attracting attention to its thousands of worn-out and abandoned buildings since she took office in January 2012.
Gary was granted $6.6 million from the U.S. Treasury’s Hardest Hit Fund to help with demolition on vacant and abandoned properties. Additionally, one of the larger affordable housing communities, Park Shore Commons, is undergoing a renovation to update the property.
The Indiana Office of Community and Rural Affairs also awarded the city $1 million to demolish decrepit commercial buildings, an abandoned hotel, and a structure once home to the Ambassador Apartments.
But the mayor’s No. 1 reason for wanting to clean up the housing is more than cosmetic—she wants her city to be safer.
“One of the things we saw this past year was the fact that an [alleged] serial killer was hiding bodies in these vacant buildings,” she says. “And we don’t want anyone else to take advantage, or to exploit the existence of vacant or abandoned buildings to engage in criminal activity.”
As a lifelong resident, Freeman-Wilson has been
dedicated in her efforts to rejuvenate the community. “This community has an
opportunity for improvement, and that’s what we focus on every day,” she says.
“I have a frame of reference a lot of younger people don’t have. Gary was once
the center of commerce for Indiana. Gary once was the center of cultural
activity in Northwest Indiana, and I believe we can return to that.”
Annise Parker,
Houston
There’s been a dramatic reduction in the number of homeless people in Houston in the last four years.
Overall, homelessness has declined by 37%, and long-term homelessness is down even more, 57%, since 2011.
Those are good numbers for Annise Parker, who is in her third and final term as mayor and has set a goal of ending chronic homelessness in the city.
With its strong economy, Houston is a fast-growing community. The metro area gained a stunning 156,000 residents between 2013 and 2014.
However, the influx of people is putting increasing pressure on the city’s housing market, especially the demand for affordable homes.
“Houston’s housing stock generally has been more affordable to more of our citizens, and the affordability of the housing stock for all of our citizens is one of our strengths,” Parker tells AHF. “In recent years due to our tremendous economic and population growth, Houston has experienced increases in home prices and apartment rents that are impacting all of our citizens.”
She says her administration is encouraging community revitalization in low- to moderate-income neighborhoods that are moving upward due to recent private and public investments. The city reports investing about $287 million in recent disaster recovery funds to revitalize some of these targeted neighborhoods.
Parker is hoping to see developers build more affordable housing in these Houston neighborhoods as well as focus on developments that target the most vulnerable citizens, including the chronically homeless and those living at or below 30% of the area median income.
Although her time as mayor is coming to a
close, this may not be the last time we see Parker. She may have her eyes set
on new and bigger office. Perhaps, governor?
Tomás Regalado,
Miami
Miami is a big and tough market for renters.
In a city where roughly 65% of the people are renters, it’s especially tough to find an affordable place to live. Only 32% of available apartments were considered affordable for the typical Miami renter in 2013, according to a recent study by the New York University Furman Center and Capital One.
Like many other big city mayors, Tomás Regalado says affordable housing is becoming more of a priority. “As market conditions improve, the cost of housing continues to rise and property values increase beyond the reach of lower-income families,” he tells AHF. “Rent levels increase for renters, and property values increase beyond the reach of lower-income families, increasing the need for affordable housing development.”
To help boost production, city leaders are considering the possibility of adopting an inclusionary zoning policy, according to Regalado.
He also recently said the city wants to use the EB-5 investment program—which exchanges visas for large investments in U.S. businesses—to create more affordable housing projects.
With residents 62 years and older making up about nearly 19%
of the city’s population, Regalado’s administration also hopes to see
developers building more seniors housing so these households can age in place
and remain in Miami.
Mitch Landrieu,
New Orleans
New Orleans became the first major city to end veteran homelessness this year.
In early 2014, officials identified 193 veterans living on the streets. After committing to move them into permanent homes, New Orleans had housed 227 vets by early January 2015, exceeding its initial goal.
“It’s important to understand an obvious truth: Our work of transitioning people, homeless veterans, to safe, warm, and permanent housing is never ever really done,” said Mayor Mitch Landrieu, announcing the milestone on Jan. 7. “A veteran can become homeless tomorrow. That’s why we went beyond housing just 193 and created a new sustainable rapid response outreach model that works and combines all of our available resources and engages local and active military.”
The city’s effort began in response to First Lady Michelle Obama’s Mayors Challenge to End Veteran Homelessness, which has been accepted by 355 mayors, seven governors, and 112 county and city officials.
To achieve its goal, New Orleans adopted an “all hands on deck” approach to ending veteran homelessness. “I’ll give you three key things,” Sam Joel, policy adviser to Landrieu and quarterback of the effort, told AHF. “Partnership. Partnership. Partnership.”
Numerous agencies and officials, including the mayor’s office, nonprofit Unity of Greater New Orleans, and the Southeast Louisiana Veterans Health Care System (SLVHCS) were involved. The key partners met on a weekly basis throughout 2014 to discuss individual veteran’s cases and identify housing opportunities.
After creating a master list of the homeless veterans, the next step was to assign veterans to “navigators” who could assess their needs and take responsibility for the paperwork necessary to get them into an appropriate housing program, according to a National Alliance to End Homelessness summary of the initiative.
Another important move was to engage local active military servicemen and women to help. “We knew that veterans who were on the streets, veterans who were homeless, would respond to their brothers and sisters who were serving active duty,” said Landrieu. “That turned out to be very, very powerful.”
A rapid re-housing grant was targeted to veterans. Other tools included the Department of Housing and Urban Development and Veterans Affairs Supportive Services (HUD-VASH) program, which provides rental assistance from HUD and services from VA.
Landrieu’s office helped create a memorandum of
understanding between the Housing Authority of New Orleans, SLVHCS, and Unity
to set aside 200 Sec. 8 vouchers for veterans graduating from permanent
supportive housing programs. This allowed the HUD-VASH vouchers and other
permanent supportive housing resources to be freed up for chronically homeless
veterans.
Bill de Blasio,
New York City
While some mayors never utter the words “affordable housing,” Bill de Blasio shouts them from the rooftops.
“If we do not act—and act boldly—New York risks taking on the qualities of a gated community … A place defined by exclusivity, rather than opportunity. And we cannot let that happen,” said de Blasio in his State of the City address in February.
Overall, 56% of rental households in New York spent more than 30% of their income on housing last year—up 10 points in a little more than a decade.
In response, de Blasio has called for the construction of 80,000 new affordable housing units by 2024, which he calculates would mean building at twice the average annual rate of the past 25 years. In addition, he wants to preserve another 120,000 affordable units and build 160,000 market-rate units. To expedite this activity, de Blasio is ready to rewrite the rules, including adopting a mandatory inclusionary zoning policy.
It’s too soon to tell if the mayor will reach his lofty goals, but he’s already raised the level of conversation about the growing need for affordable housing in the nation’s biggest and brashest city.
The mayor is still new to the job, taking office in 2014. However, his exuberance isn’t the kind of a new convert. Earlier in his career, he served as a regional director for the Department of Housing and Urban Development during the Clinton years.
“This administration is taking a fundamentally different approach—one
that not only recognizes the need for more affordable housing … but demands
it,” de Blasio told the city in February.
Ralph Becker,
Salt Lake City
Salt Lake City Mayor Ralph Becker has called for the building of 5,000 affordable housing units over the next five years.
“We saw a need to have a much more focused effort to address the gaps we’ve identified over time and to achieve our policies,” Becker tells AHF. “It’s also central to the livability agenda that I have because we want to be able to provide for all of our folks, our demographic needs, within the city.”
A city of 186,000 people, Salt Lake City has relatively few middle- and upper-income households and a high proportion of low-income households. Forty‐one percent of city households earn less than $35,000 per year, according to study conducted by BBC Research & Consulting.
In 2011, 54% of the renters were cost burdened (spending 30% or more of their income on housing), BBC reported.
To encourage affordable housing development, the city is offering incentives, including low-interest loans, to developers.
Becker is pleased with the early response to his initiative. “We’ve been very successful developer by developer and development by development of carving out portions of housing developments for affordable housing, including housing for the homeless population and people with particular needs,” he says.
Before going into politics, Becker was an attorney and a planner, a role that no doubt influences his work as mayor.
“One of the things that happens with those of us who are
trained and worked professionally in the planning world is we tend to look at
how pieces of communities fit together and integrate,” he says. “We also tend
to think longer term about what’s going on in the areas we are responsible for
planning. I certainly try to bring that to the job.”
Sam Liccardo,
San Jose, Calif.
San Jose, Calif., is one of the most expensive housing markets in the nation. And this expensive market is seeing rents and housing prices continue to rise, making housing even more out of reach for many.
On top of the housing costs, only a quarter of the affordable housing needs were met over the past seven years.
“The affordable housing crunch makes it more difficult for employers to attract employees, exacerbates our homeless problem, and makes it more difficult for low- and moderate-income households who must spend the majority of their income on housing costs, leaving little funds to pay for other expenses,” says San Jose Mayor Sam Liccardo.
San Jose expects to have more funds to commit for affordable housing this year due to the repayment of some existing city loans for affordable rental properties. However, these would be one-time funds and not an ongoing predictable funding source. After the dissolution of local redevelopment agencies by the state in 2012, the city’s ability to fund new affordable housing and preserve existing projects continues to be severely constrained.
Looking forward, a new Affordable Housing Impact Fee on market-rate multifamily projects of three or more apartments, approved by the City Council in November, is expected to start generating revenues in 2017 and will be used to subsidize new and newly affordable developments for low- and moderate-income households.
San Jose’s citywide Inclusionary Housing Ordinance, which is under a court-ruled state since its passage in 2010, will require 15% of all new for-sale homes to be provided at prices affordable to low- and moderate-income households or developers can take advantage of other options, such as a payment in-lieu fee.
The city defended the ordinance to the California Supreme Court and believes that implementation will begin early next year. Until then, the city’s existing Inclusionary Housing Policy remains in effect for redevelopment project areas.
“Given that many of the new development projects are rental and are not subject to inclusionary requirements given the 2009 Palmer court case, the city has missed out on thousands of affordable homes it otherwise would have had built, which would have remained affordable for 55 years,” says Liccardo. “Palmer’s effects are a demonstration of how important inclusionary housing is, particularly for communities that are growing such as San Jose.”
The Palmer case rolled back inclusionary zoning laws in the state a few years ago.
Providing permanent housing for the city’s more than 5,000 homeless people is another top priority for San Jose.
“The city is actively working with its development community
to jointly create the right conditions so that true supportive housing for the
homeless can be built in the city and work for different types of homeless
households,” adds the mayor.
Helene Schneider,
Santa Barbara
In Helene Schenider’s city, the median home price is more than $800,000, and there is less than 1% vacancy for rentals in the area.
“While there are numerous new rental and for-sale projects in the pipeline throughout the area, the new supply will not keep up with the big demand of people who wish to live here,” says the mayor of Santa Barbara, Calif.
To encourage more development, the city’s recently updated General Plan provides for a rental housing bonus density overlay. “This new policy has enabled close to 170 new rental units to move through the planning and permitting process,” says Schneider, who was re-elected to her second term in 2013.
Santa Barbara has also started working on a new private/public partnership with a local philanthropic agency to create a landlord liaison project that would help identify affordable housing opportunities.
In response to an AHF survey question, Schneider says she would like developers to coordinate more with agencies that have access to social services funding so that essential services are part of and secured within the overall operating budget of a project.
She also serves as co-chair of the U.S. Conference of
Mayor’s Task Force on Hunger and Homelessness. One of the initiatives the task
force has supported and discussed at meetings is the Mayors Challenge to End
Veterans Homelessness.