Stepping Up: How Cities Are Working to Keep America's Poorest Families Housed
Having a place to call home is a signature component of the American dream. But for far too many people, finding safe, decent, affordable housing is extremely stressful. The United States simply does not have enough affordable housing. And nationally, the situation is only getting worse.
This story is not about just counting homes. The affordable housing shortage has real consequences for families because millions of them pay more than they can afford to have a place to live, often at the expense of food, health care, and other necessities.
For extremely low-income families—those households earning no more than 30 percent of their area’s median family income—this pain is severe.
According to data from the Census Bureau and the US Department of Housing and Urban Development (HUD), only 28 of every 100 extremely low-income renter households in the United States were able to find decent, affordable homes in 2013. This stark decline from 2000, when 37 of every 100 could find housing, reflects both a loss of units and an increase in extremely low-income families.1
Without federal housing assistance, the situation would be even worse: the share of families who could afford adequate housing in 2013 would have fallen to 5 percent.
The first federal programs to tackle housing affordability were created in the late 1930s. Over the next decades, those programs allocated resources to big cities with big needs.
Since the 1990s, however, federal resources devoted to housing extremely low-income renters have slowed. And growing cities—mainly in the south and west—have suffered.
The national picture could get bleaker. In recent years Congress has cut, and shown additional interest in trimming, federal spending for housing assistance programs.
The data’s message is clear. No matter where you look , federal programs are not enough. As a result, state and local governments must do everything they can to preserve existing affordable housing units while finding ways to produce more.
Counties around the country face their own challenges when addressing affordable housing needs. These variations exist, in large part, because counties have different federal, state, and local assets to work with. Both the tools and counties’ ability to wield them reflect particular histories, political climates, and levels of local engagement.
Suffolk and Travis Counties—homes to Boston and Austin—are very different. The most obvious difference is that Massachusetts is very supportive of affordable housing, while Texas is not. Another is that Boston benefits from its legacy of federal rental assistance, while Austin has experienced more recent growth and is unable to keep pace with rapidly increasing need. But both are using multilayered strategies—some proven, some promising—to tackle their local affordability challenges. And both are determined to face an increasingly daunting task.
On the border of the Boston neighborhoods of Roxbury and Dorchester, neatly tucked between the orange, red, and silver commuter train lines, sits a classic red-brick building accented with white windowpanes. Inside the Wilshire Apartments’ 29 units live 20 extremely low-income families who receive a federal housing subsidy known as Section 8 project-based rental assistance.
In Boston, this program helps families who generally earn less than 30 percent of the area’s median income—$29,550 for a four-person household in 2015—pay for rent and utilities. These families are typically much poorer than that: on average, Boston households receiving HUD programs had $16,261 in income in 2013.
If not for the efforts of Boston’s affordable housing community working in concert with dedicated local, state, and federal partners, the families living in the Wilshire Apartments would not be Section 8 beneficiaries. Instead, the building likely would have been snapped up on the open market years ago and converted into market-priced apartments that these families could never afford.
Building new properties in Boston that can meet affordable housing needs is difficult; construction is generally expensive, and vacant property is hard to find. Plus, this older, congested northeastern city has very tight zoning restrictions.
Thus, finding multilayered and creative strategies to keep existing housing affordable, reimagine it and the land it sits on, and expand it to serve more extremely low-income families have been central and persistent goals for the key housing players in the city and state.
To be sure, the county’s success to date is hard-earned and by no means accidental. Despite these efforts, nearly half of Suffolk’s extremely low-income families lack affordable housing.
Right Place, Right Time
Thanks to the state’s deep commitment to affordable housing, Suffolk is the top-performing large American county when it comes to providing housing for extremely low-income families. Another four Massachusetts counties place in the top 10 large counties with the smallest affordable housing gaps.
Suffolk was able to provide affordable and adequate housing for nearly 51 percent of its 74,262 extremely low-income families in 2013. This share is almost double the national average, and it’s nearly 3 percentage points better than the county was able to perform in 2000.
This is definitely a good news/bad news kind of issue. It’s all relative. These five Massachusetts counties, including Suffolk County, are doing better than the rest of the country, but the fact is the best is still pretty poor.
Executive director, Community Economic Development Assistance Corporation (CEDAC)
The seeds of Massachusetts’s relatively strong performance were sown in the ’50s, ’60s, ’70s, and ’80s. During these four decades, the state became an early beneficiary of HUD’s programs, developed effective state-run platforms, and created CEDAC to help produce and preserve affordable housing.
Under HUD’s fledgling programs, the federal government offered financial incentives for developers to build affordable housing; in return, the developers committed to keeping that stock reasonably priced for several decades. Section 8 project-based assistance and federal low-income housing tax credits were critical resources added later to the state’s affordable housing toolkit.
Massachusetts also invested its own resources. It created state public housing and state housing voucher programs, both entirely distinguished from their federal counterparts. The state also crafted its own low-income housing tax credit program during the late ’90s. Massachusetts even put together state financing for affordable housing—similar to HUD’s Section 236 program—called Section 13A.
“The state has historically, and continues to, put money into affordable housing, into vouchers, and into state public housing, which isn’t the norm across the country,” said Rebecca Koepnick, director of neighborhoods and housing at the Boston Foundation.
Given these opportunities, many counties in Massachusetts, including Suffolk, went all in. During those early decades, Boston built as many as 40,000 units for low-income and extremely low-income households.
Waves of Risk
Though HUD’s programs and Massachusetts’s willingness to use them boosted the number of affordable housing units in Boston early on, before long a significant portion of this supply came under threat.
The deals struck by housing developers and HUD allowed developers to pay off their mortgages after 20 years and rent the units on the open market, with no further requirements to lease to low-income tenants.
By the late 1980s, many Boston neighborhoods—including those with HUD-subsidized units—had recovered from the economic stress of previous decades. Many developers were tempted to opt out of the HUD programs and rent to higher-paying middle-class tenants looking to move back into the city.
This temptation to opt out was assuaged with national measures that created new incentives for developers to stay committed to their deals with HUD. But Boston took it even further. This first crisis prompted the development of what has become a very strong network of organizations—such as CEDAC—working to preserve affordable housing in the capital city.
“The preservation interest was triggered, particularly, by the circumstances of high rents and programs running out of contract terms, such that the housing was at a risk,” said Amy Anthony, who was the secretary of the Massachusetts Executive Office of Communities and Development from 1983 to 1990. “We hit that sooner than most places, because we had such active early development on the private developer side in early federal programs.”
Anthony is the founder of the Preservation of Affordable Housing (POAH), a nonprofit developer working in nine states and the District of Columbia to preserve and improve affordable housing.
South Boston triple-deckers are seen in the foreground with the downtown Boston skyline looming in back, Wednesday, January 15, 2003. Photo by Elise Amendola/AP.
Nonprofits, together with smaller developers known as community development corporations, mission-driven for-profit developers, and some financial intermediaries, form a strong fabric of organizations working in Boston to buy at-risk properties, expand their capacity, and ultimately keep them affordable.
This is an amenity few other cities have, and it has been helping Boston since the first wave of risk crested.
A second wave of risk followed in the late 1990s, when a lot of housing units with HUD Section 8 project-based rental assistance came up against their agreement expiration dates. City and state officials, CEDAC, and the developers collaborated, strategized, organized tenants, and negotiated with private owners. As a result, much of the project-based housing stock was preserved using available public resources.
A third wave of risk is playing out now. Agreements are again approaching the limits of their 40-year mortgage terms, and Boston is again having to find ways to meet this challenge.
With declining federal funds for public housing, the Boston Housing Authority is looking for support outside its normal ecosystem. Using a HUD program known as the Rental Assistance Demonstration, the authority is looking to lure more private-sector dollars into public housing.
“I am, quite frankly, very disappointed that the feds have taken a hike on funding [public housing],” said William McGonagle, administrator of the Boston Housing Authority. “Having said that, I would say that I am cautiously optimistic that through this vehicle we can … find ways to invest in public housing and maintain affordability over the long term.”
McGonagle also hopes to build in long-term affordable housing guarantees whenever public lands are leased to private builders looking to develop residential buildings.
Another asset that allows Boston to navigate this ever-perilous risk of losing affordable housing is an early warning system set up and managed by CEDAC.
The system is essentially a fine-tuned database that provides detailed information about all the publicly financed, privately owned affordable housing in Massachusetts. Using this information CEDAC, the state, Boston, tenant organizations, and developers can strategize about the best time to buy expiring affordable housing and preserve it.
Girma Bealy, a member of the Roxbury Tenants of Harvard, talks on his cell phone during a break between plenary sessions at the Housing Boston 2012 conference in Boston Friday, April 27, 2007. South Boston and the financial district, in the distance, are shrouded in fog and rain. Photo by Stephan Savoia/AP.
Boston has another thing going for it: the Massachusetts Department of Housing and Community Development, CEDAC, and the MacArthur Foundation in 2009 created a fund that provides bridge loans to affordable-housing buyers looking to preserve properties, so they can act quickly when the alarms go off and these properties come to market.
An additional edge: the state legislature in November 2009 passed a law known as Chapter 40T that—among other things—gives the state the “right of first refusal” when owners of affordable housing properties are selling them without a commitment to maintaining affordability. In other words, the state gets first dibs if it wants to preserve the affordable housing.
Chapter 40T’s presence was integral to preserving the Wilshire Apartments for extremely low-income families. The apartments are about to be renovated and upgraded, but their future as stable homes for those in need is secure going forward.
Policy tools and the savvy players in Massachusetts and Boston that figured out how to combine and use them have led to Suffolk’s relative success. This legacy of benefits was available to counties like Suffolk because they were population centers when public investment came online and was significantly greater than it is today. For cities and counties that have grown large since that time, it is a whole different ball of wax.