An Equitable Framework for Housing Policy Solutions for COVID-19 and Beyond

Research Report

An Equitable Framework for Housing Policy Solutions for COVID-19 and Beyond

Reflections on Lessons from Hurricane Katrina and The Great Recession

Abstract

Housing is a foundation for economic mobility and opportunity, but many Americans struggle to afford a place to live. And racist policies and practices—historical and ongoing—have created entrenched inequities in access to homeownership, housing quality, and resource-rich neighborhoods. The COVID-19 pandemic has made these problems worse. Record levels of job losses, tightening credit markets, and a growing risk of evictions and foreclosures threaten housing stability. The loss of low-cost units, low vacancy rates, and housing construction downturns could reduce housing supply. Homeowners and housing developers may also face greater risks in the future because of weak labor market conditions and broader economic uncertainty.

But our housing systems have been tested before, so we can learn from past crises like Hurricane Katrina in 2005 and the mortgage crisis and subsequent Great Recession in 2007–09. This time, though, policymakers can do more than craft housing response policies that return households to a pre-pandemic status quo. Instead, they can embrace economic mobility and racial equity as their goals, aiming to foster not only economic success but also people’s power and autonomy and their sense of being valued in their communities.

We reviewed 10 federal policies and programs and one local planning process adopted in response to Hurricane Katrina and the Great Recession, along with initial federal, state, and local responses to COVID-19, for their efficacy in promoting economic mobility and racial equity. Most programs focused on one aspect of economic mobility—economic success—without the others. None of the programs articulated racial equity as an explicit goal or process. However, the outcomes of these programs were sometimes unintentionally equitable.

Paying attention to past lessons, we distill four policy principles for ensuring that the needs of all housing market participants are met in a way that promotes mobility from poverty and racial equity.

  1. Keep all renters and homeowners housed while targeting those with the greatest need and maximizing their choices. Provide payment relief to renters and homeowners—including unemployment benefit boosts, rental assistance, and mortgage forbearance and refinancing. Prevent evictions through moratoriums and rent and fee reductions or forgiveness. Set a low bar for assistance by simplifying eligibility requirements and processes and allow gradual transitions off of assistance.
  2. Maintain an affordable supply of housing and financing. Provide payment relief to owners of small rental properties through mortgage forbearance, and support tenants through rental assistance. Help homeowners responsibly access low mortgage rates and home equity. Provide incentives for lenders to reach payment agreements or workout plans to modify loan terms with borrowers, including owners of small rental properties. Increase capital for mission-based organizations to buy at-risk units.
  3. Stabilize communities by increasing power and autonomy and the sense of belonging. Increase emergency funds to the hardest-hit areas, and ensure inclusive local recovery planning.
  4. Center people in policy response. Provide households with individualized attention and financial counseling. Focus holistically on household circumstances, and address consumer debt and credit issues. Make assistance easier to find, and design materials and processes to be accessible to people in crisis.

In the short term, policymakers and practitioners should target help based on evidence of who is at the highest risk for housing-related hardships because of the COVID-19 pandemic. They should then pursue strategies based on an analysis of the most significant failures in existing housing systems, especially failures that disproportionately affect these high-risk groups. This work will sow the seeds for an equitable housing policy framework that extends beyond the current crisis to actively root out structural racism and foster long-term economic mobility.

Research Area: 

Cross-Center Initiative

Cross-Center Initiative: 
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