Harvard Report: Affordable Housing Increasingly Scarce

While other categories of housing and construction are still struggling to rebound from over building, dropping prices and income, demand for one area of housing is increasing – that for affordable rental housing.

A new report from the Harvard Joint Center for Housing Studies finds that the number of “rent burdened families” (those who spend more than half their incomes on rent and utilities) is rising, to one-quarter of the renting population (10.1 million families) at the very time that affordable options for rental housing have decreased.

According to the report since the mid-1990s, more than 700,000 rentals with federal subsidies tied to them were lost, either through demolition or an owner’s decision to turn the units into market-rate rentals. And, nearly 12 percent of the low-cost market-rate rentals existing in 1999 were either demolished or otherwise lost from the housing stock by 2009.

“The public sector can’t tackle this problem on its own. Policy makers must look for ways to support efforts by the private sector to invest in both existing and new rental housing, while keeping prices affordable,” said Chris Herbert, a co-author of the study, titled, “America’s Rental Housing: Meeting Challenges, Building on Opportunities.”

One piece of good news is that the best-known federal government program to support private investment, the low-income-housing tax credit, is gaining popularity among a broader group of investors. While historically, banks were the major buyers of these credits, in the past few years, the LIHTC has attracted a new group of investors including Google, Verizon, Allstate, Kroger and others.

Google, for one, has launched an $86 million fund to invest in 480 income-restricted apartments. The investment, Google Vice President Brent Callinicos told The New York Times, helps fill a “void in affordable housing investment” and “allows us to further our goal of providing relief to people who otherwise may not have access to quality housing.”

At Brinshore we’ve long believed both in the importance and viability of the affordable rental market. That the need has been verified and new corporations see this area of housing as a strong viable investment, makes us confident that the future looks good for at least one sector of the housing market – sustainable, affordable housing.

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