Housing News Roundup: February 20, 2015
Climbing Student Debt is Keeping Many Americans from Becoming Homeowners
Student debt — which reached nearly $1.2 trillion in 2014 — is making it difficult for many Americans to afford their own homes. “The growth in student debt, with its monthly cost and high delinquency and default rate, seems to be reducing both household formation and homeownership,” according to economists from the Federal Reserve Bank of New York.
Affordable Housing Could Dramatically reduce New York State’s HIV/AIDS Rates
Stable and affordable housing could reduce New York state’s HIV mortality rate by 80 percent while also dramatically reducing the number of new infections. The state already intends to build 5,000 supportive housing units over the next five years, although 20,000 will be required over the next decade.
Source: New York Times
HUD Investigating Whether Set-Asides Violate the 1964 Civil Rights Act
The U.S. Department of Housing and Urban Development is looking into whether policies that set aside new lower-rent housing units for local residents are in conflict with the 1964 Civil Rights Act. In defense of the policy, Eric Bederman, a spokesman for New York City’s Housing Preservation and Development Department, said that “Community preference plays an important role in addressing the fears of low- and moderate-income families that new development will cause them to be priced out of the neighborhoods that they helped to build.”
Source: Wall Street Journal
Stock Buybacks Are Contributing to California’s Affordable Housing Problem
The financial policies of many large tech companies based in California are powering the state’s increasing income inequality and exacerbating problems with housing affordability and education, according to a new report. Stock buybacks are increasing, as reinvestment of net income wanes. This means high stakeholder returns paired with layoffs. “As the most populous state in the country and the eighth-largest economy in the world, California has an outsized influence on our economic, political and social stability,” said Danny Feingold, the publisher of Capital & Main.
Source: Huffington Post
Twin Cities Regionalism Keeps a Door Open for Economic Growth
Wealth crowds out housing affordability in many of the top-tier and high-draw cities in the U.S., leaving the young and less-well-off with a choice between living somewhere affordable and accessing economic opportunities. The Twin Cities is an outlier thanks to the combination of housing policy and fiscal policy. Fiscal equalization, in particular, has brought up the bottom with little impact on higher-wealth areas. The strength of the area’s neighborhoods and schools have drawn and kept residents. “This, in turn, has nurtured a deep bench of 30- and 40-something managers, who support the growth of large companies, and whose taxes flow to poorer neighborhoods, where families have relatively good odds of moving into the middle class.”
Source: The Atlantic