In the Trump Era, Cities May Have to Pursue a Self-Help Approach to Affordable Housing

Feb. 21, 2017 HOUSING | SUN BELT

Housing advocates look to cities to lead the way in affordability.

Ben Carson head shot

Housing advocates look to cities to lead the way in affordability.

New HUD Secretary Ben Carson. Image via flickr/Gage Skidmore.

A variety of tools are available to cities looking to protect and create affordable housing. But traditionally, the federally-funded programs like housing vouchers and low income housing tax credits have been the lifeblood of many cities' affordable housing strategies.

Now, as a new administration shapes federal housing priorities, advocates fear some of those programs are under threat, leaving cities to fill in potential gaps.

And the gaps are already sizable. In the Houston area, there's a shortage of roughly 139,000 affordable and available units for people making a third of the area's median income, according to the National Low Income Housing Coalition, according to a 2015 report. In Dallas, that gap is above 165,000. Los Angeles, meanwhile, is short some 371,000 units.

And those numbers tend to be conservative. In Houston, for example, there are roughly 214,000 households that make less than 80 percent of the area's median income but spend more than 50 percent of that income on housing costs, according to the most recent numbers from the Census Bureau's Comprehensive Housing Affordability Strategy. Those households are considered severely "cost-burdened."

Cities have often looked to federal programs to help close those gaps. So in Houston, assistance funded through the Housing Choice Voucher program helps support some 22,300 households in the city and county. The Houston Housing Authority also operates some 5,500 public housing units. And the low income tax credit has helped finance the construction of 47,700 affordable units since 1990 (though the affordability periods attached to some of those units may have expired).

But the new federal administration seems poised to change that. "All federal housing programs are at significant risk," Diane Yentel, president of the National Low Income Housing Coalition, told the Atlantic shortly after the election.

In addition to cutting funding, the Republican Congress and administration have championed tax code changes that would lower corporate tax rates, which effectively reduces the value of the low income housing tax credits that have helped fuel construction and rehabilitation of affordable housing across the country.

The tax credit market depends on affordable housing developers selling their federally-funded tax credits to interested investors as a way to finance new projects and give those corporations a break on their taxes. Builders across the country have already reported that market is suffering.

"The threats that we face and the need that is there has never been greater," said Tory Gunsolley, president of the Houston Housing Authority at a recent housing symposium co-hosted by the Kinder Institute for Urban Research.

With the federal government's role in question, cities and counties may have to think creatively about affordable housing, said Susan Popkin, a senior fellow with the Urban Institute, at the symposium.

"The low income housing tax credit is under threat," she said. "We might be having a very different discussion about local innovation."

Partnerships with other departments and private organizations can help make affordable housing developments more effective, said Louis Bernardy, director of development in Texas for the national affordable housing developer McCormack Baron Salazar. Transit-oriented development, for example, can help direct both transit and housing dollars to a project.

Tools like inclusionary zoning, that can require developers to set aside a certain percentage of new units as affordable housing, and community land trusts, operated either by the city or community groups, can also help direct development.

"I think we're going to see a lot less federal resources for at least a few years so the communities that are going to be successful are the communities that are going to step up and find local resources," added Chuck Perry, managing partner with Jonathan Rose Companies, a national development and investment firm.

And he, added, it takes a local administration invested in affordability. "Unless you have a mayor that is highly committed to housing," he said, "the housing community and neighborhood [community development corporations] need to help the administration get there."



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