Worsening Rental Crisis Requires a New Vision for Housing Policy

By John Griffith and Diane Yentel

In communities across the country, renters face an unprecedented affordable housing crisis.

Today more than one in four families who rent their homes—a total of 11.4 million households—are “housing insecure,” meaning they spend more than half their monthly income on rent and utility bills. Housing-insecure families are often faced with impossible tradeoffs—pay rent or buy groceries, pay the electric bill or put gas in the car—which have profound impacts on their long-term health and economic prospects. And many have no choice but to live in neighborhoods with rampant crime, few jobs, failing schools, substandard housing, and few opportunities.

Absent meaningful policy changes, this problem will only get worse in the years to come. According to recent projections from Enterprise Community Partners and the  Joint Center for Housing Studies of Harvard University, even if rent growth and income growth match, the number of housing-insecure renters is expected to increase by more than 10 percent over the next decade.

Tackling this problem requires a new vision for housing policy at all levels of government. In a new long-term policy platform “An Investment in Opportunity,” Enterprise lays out the changes in federal, state, and local policies needed to address America’s growing rental housing crisis and create communities of opportunity across the United States.

Enterprise’s policy platform offers a bold new vision for housing policy, with 23 discrete policy recommendations built around four strategies for reform. Those strategies are:

1. Ensure broad access to high-opportunity neighborhoods. According to research from Harvard’s Raj Chetty, moving a poor child out of a high-poverty neighborhood to a more affluent community increases his or her chances of going to college, decreases his or her chances of becoming a single parent, and increases his or her expected earnings as an adult. But too often lower-income renters are shut out of neighborhoods with good schools, jobs, and public transit—partly because of the high cost of living, but also because of local zoning rules, land use restrictions, and other exclusionary policies. At a minimum, policies should not discourage parents from living in communities that provide the resources their children need to succeed.
2. Promote comprehensive public and private investments in low-income neighborhoods. Not everyone can or wants to move to an affluent neighborhood. Advocates and policy makersmust also encourage the investments necessary to empower residents and transform lower-income neighborhoods, many of which have long suffered from disinvestment and neglect. Affordable housing is often a catalyst for these investments and a crucial safeguard against wholesale displacement as a community changes. But this strategy also requires significant, long-term investments in local businesses, schools, job training, public safety, access to healthy food, and health care.
3. Recalibrate priorities in housing policy and target scarce subsidy dollars where they are needed most. After a series of federal budget cuts in recent years, only 23 percent of households eligible for federal rental assistance actually receive it, leading to decade-long waiting lists and lotteries for rare openings. Developers requested more than three times the amount of low-income housing tax credits than were available in 2013, according to an NCSHA report, meaning hundreds of viable developments are turned down each year, which only exacerbates the shortage of affordable rental housing. Meanwhile, U.S. taxpayers are spending tens of billions of dollars each year to subsidize the mortgages of higher-income families who do not need government support to remain stably housed.
4. Improve the overall financial stability of low-income households. In order for families to remain stably housed in a decent neighborhood, workers need steady jobs that pay a living wage. But no U.S. state provides a minimum wage sufficient to allow a full-time, minimum-wage earner to afford a one-bedroom apartment at fair market rent. After years of rising rents and stagnating wages, families are spending an increasing share of their take-home pay on rent, forcing them to make deep cuts elsewhere in their household budget and making it virtually impossible for many low-income families to save for a rainy day or reach longer-term financial goals.

You can explore all the policy recommendations on Enterprise’s interactive website, or read the full platform online or download the recommendations as a PDF.

The problems the United States faces are not intractable; indeed, many of the tools needed to solve them already exist. The key question is whether the presidential candidates and other key stakeholders have the political will to seize this opportunity, strengthen the existing tools, and make the investments necessary to address the problem at the scale at which it exists.

John Griffith is a senior analyst and project manager at Enterprise Community Partners. Diane Yentel is Enterprise vice president for public policy and government affairs. Together they wrote “An Investment in Opportunity,” Enterprise’s long-term policy platform.