Loan limits will likely go up to $625K in 2022, but FHFA hasn’t announced it yet. Still, higher home values have convinced some lenders to boost loan limits now.WASHINGTON –
Affordable Housing: The Solutions, Not Just the Problem ☘ Hoey Team ☘ eXp Realty Florida
Dated: February 7 2020
Real estate professionals and researchers came together at NAR’s Policy Forum to provide a range of solutions to housing’s pressing problem: inventory.
The housing shortage has hit crisis level, particularly in lower price brackets, but solutions are surfacing, panelists said in an affordable housing session, part of the Policy Forum on Housing Affordability in Washington, D.C., on Thursday. The event was sponsored by the National Association of REALTORS®.
When you look at household growth and housing starts, the nation is about 350,000 houses short each year, said Kent W. Colton, president of The Colton Housing Group and a senior research fellow at the Joint Center for Housing Studies of Harvard University. And the problem is cumulative, meaning the gap keeps growing between the number of people the country needs to house and the number of available homes for purchase or rental. But communities and lawmakers are starting to wise up to the problem and are showing more willingness to talk about solutions, whether that’s in the form of easing zoning and regulatory burdens or maximizing incentives for construction of new units.
“Local and state governments are starting to recognize that we need to do something,” said Colton. “There appears to be a window of opportunity that didn’t exist 10 years ago ... because of the crisis we face now. This is going to happen one innovation, one local government, one state government at a time. But coalitions and groups are coming together to do something to address housing shortages.”
REALTORS® are among the voices stepping up to address the issue head-on in their communities.
Washington REALTORS® learned it may take more than one effort to get their message across. A few years ago, the association asked state legislators to ease condo rules to spur more ownership opportunities for what they referred to as the “missing middle”--middle-income earners trying to buy their first home. But their attempt failed to gain traction, said panelist Steve Francks, CEO of the Washington REALTORS®.
In 2018, the group decided to try again. This time the association took a broader approach, focusing not just on condos. REALTORS® in the state launched a campaign called “Unlock the Door for Affordable Housing.” They aimed their advocacy efforts at content, messaging, and delivery—championing 16 bills that addressed housing shortages from multiple angles.
“Rather than focusing on just one area of this massive problem, we decided to group together a range of legislation that addressed housing, from [serving] the most vulnerable populations to addressing the infrastructure to condo reform to incentives to increase density and supply,” Francks said. “We wanted to try to deliver a message of reform and market-based solutions that addressed the housing shortage over the entire spectrum."
With assistance in advocacy efforts from the National Association of REALTORS®, the state association did a one-month, $1 million multimedia campaign aimed at making housing affordability the number one priority for their state legislature.
Of the 16 bills before the Washington state legislature, 12 passed, receiving widespread bipartisan support. Francks pointed to the successful campaign as an example to what REALTORS® around the country can do in confronting the housing shortage in their communities.
A Focus on Solutions
Panelists agreed that a broad-based approach is needed. Colton talked about recipients of the Ivory Prize, an award for those who’ve emerged with creative solutions to the housing crisis (ivory-innovations.org/theivoryprize), offering five ways that innovators are working to ameliorate the housing shortage:
- Technology that enables builders to build more homes for less. Factory OS, Colton said, is using modular, factory-built panelized construction in the multifamily sector to produce housing 40% faster and at lower costs.
- Programs that enable preservation and production of affordable housing in existing neighborhoods. Century Partners in Detroit, he said, helps revitalize neighborhoods through rehab, workforce development, and community design.
- Creative financing approaches that allow more people to qualify for a mortgage. Home Partners of America, Colton said, has a lease-to-own program that gives purchasers five years to qualify to buy the house. The group teams with REALTORS® for transactions. Another program, called Landed, provides a shared equity down payment program for teachers in California. It pays 50% of the down payment; in return, the company gets 25% of the equity when the property is refinanced or sold.
- Innovative use of lots and existing housing. Alley Flat offers accessory dwelling units. Nesterly pairs senior homeowners in the Boston area with college students looking to rent a space. “The seniors get rent and they get company as they age-in-place,” Colton says.
- Removal of regulatory barriers at the local, state, and federal level. Reform is especially needed at the local and state level to allow more homes and apartments to be built and to reduce the time and cost of building, Colton said. Recent efforts in Oregon and Minneapolis have done away with single-family zoning to allow for construction of a greater variety of housing types within neighborhoods, Colton said. (Watch for an in-depth look at the Minneapolis plan in the March-April 2020 issue of REALTOR® Magazine, due out March 7.)
“We’re not going to solve this in any one way,” Colton said. “Innovation is going to be part of the solution, and it’s going to be done one step at a time.”
Not Just a Coastal Problem
That sentiment was echoed by Matt Chase, executive director of the National Association of Counties, who was also on Thursday’s panel. He emphasized the importance of incentives—whether economic, social, or revenue-based—in fueling greater housing in counties starved for it. The National Association of Counties has created a housing affordability profile for counties nationwide, which provide data that can be used to craft policies and address local solutions.
“Counties can look at the data and recognize they have a problem, and maybe that means they can look at streamlining their permitting or working more with the community to address it,” Chase said. “This problem is not just in San Francisco and New York City, but it affects every county—from urban to suburban to rural. We need federal regulatory reforms and local reforms, and it’s going to take everyone coming together to address this.”
Article content from NAR (National Association of REALTORS) Newsletter Magazine, and from other sources.
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