Housing and Community Development Policy

An Urban Institute Briefing for State Leaders

Where people live can influences nearly everything in their lives.

But the fundamental stability that a home and an opportunity-rich community can provide is not available to all families. Many residents struggle with a lack of affordable housing, barriers to homeownership, homelessness, and underresourced neighborhoods.

Evidence-Backed Policy Solutions

Urban Institute research can help states understand and tackle these multidimensional challenges and create a policy agenda backed by evidence to build opportunity-rich neighborhoods for families.

Urban experts make several policy recommendations for state leaders:

Increase millennial homeownership: Households with greater financial literacy have higher homeownership rates, but financial literacy is low, especially among millennials. Alabama, Missouri, Tennessee, Utah, and Virginia require financial literacy courses in high school. Colleges could follow suit.

Spread the word about homebuying facts and help: States can help potential homebuyers access down payment assistance and first-time homebuyer programs. Nationwide, 2,527 such programs exist (typically operated by state housing finance agencies), but many people don’t know about them. And most people think the down payment average is 20 percent, when it’s really 5 percent.

Expand homeownership opportunities: States can expand small-dollar mortgage options by introducing new programs and leveraging the capacity of community-based nonprofits, land banks, state housing finance agencies, credit unions, and community development financial institutions.

Make it easier to add housing supply: States can improve affordability through incentives for easing zoning and regulatory barriers and streamlining development approval processes.

Prevent and end homelessness: Communities can end homelessness by having systems in place to immediately re-house someone who becomes homeless, ensuring that it is a rare, brief, and one-time experience. The pay for success model may be an opportunity to fund new interventions.

Build inclusive communities: States can encourage local governments to plan for inclusion, channel growth and redevelopment for inclusion, and establish a menu of allowable approaches to reduce uncertainty.

Ensure secure and stable housing: States can help strengthen legal protections for low-income renters (including ensuring legal representation for low-income tenants facing eviction), expand funding for rental assistance, and channel more investment to housing for extremely low–income households.

Invest in local economic development: Community development financial institutions (CDFIs) provide capital to people, projects, and small businesses underserved by mainstream banks. Several states are supporting and expanding CDFIs by offering equity grant programs, long-term or low-cost debt, credit enhancements, tax credits, and other policy opportunities.

Research That Drives Decisionmaking

Urban’s research and analysis can guide state leaders as they map out policy priorities.

Millennials face greater barriers to homeownership than prior generations. Credit constraints, rental costs, and the rise in student loan debt have made it harder for millennials to save for a down payment and qualify for a mortgage.

Without the support of federal rental assistance, no county in the United States has enough affordable housing for all its extremely low–income renters. On average, only 21 rental units are available for every 100 needed.

One in four rural renters is spending more than half of his or her income on housing, yet the rental housing supply in rural communities is shrinking.

Black families' homeownership rate has seen the most dramatic drop of any racial or ethnic group since 2001, declining 5 percent compared with a 1 percent decline for white families and increases for Hispanic and other families. Some regions have wider gaps, but none of the 100 cities with the largest black populations have a black homeownership rate close to the white homeownership rate.

Data Tools That Answer Questions

Mapping America's Rental Housing Crisis

How much affordable rental housing exists for every state and district in the US?
Read more

Community Development Financial Flows

Which counties are better at accessing federal funds and which are facing serious shortfalls?
Read more

Measuring Inclusion in America’s Cities

Where do cities in your state rank on economic, racial, and overall inclusion?
Read more


To connect with policy experts at Urban, email Amy Elsbree at externalaffairs@urban.org.


Urban Institute is a nonprofit research organization. Urban’s policy experts translate research findings and data findings for diverse audiences, apply insights to real-world problems to find solutions, and share their recommendations with policymakers at every level. 

Urban Institute, as an organization, does not take positions on legislation or policy issues. Urban’s experts are empowered to follow the evidence to provide policy recommendations based on their research and expertise. The recommendations expressed here should not be attributed to the Urban Institute, its trustees, or its funders. This resource was funded by the Annie E. Casey Foundation through the Urban Institute’s Low-Income Working Families initiative.