Why they don’t work.
To effectively address the issue of housing affordability, it is imperative to recognize that current affordable housing programs, while providing immediate relief, often foster long-term dependency on government subsidies and fail to address the fundamental causes of housing insecurity. Skill gaps significantly obstruct upward mobility, preventing individuals from achieving housing stability despite available subsidies. Excessive land use regulations and restrictive zoning policies exacerbate housing prices by inflating development expenses. Furthermore, the persistence of mental health and substance abuse issues among recipients of affordable housing programs impairs their ability to maintain stable housing, rendering these programs ineffective in fostering long-term self-sufficiency. Thus, affordable housing programs cannot resolve the root causes of housing insecurity, necessitating an approach that includes skill development, regulatory reform, and mental health initiatives to create enduring solutions that reduce reliance on government aid.
Gain in demand skills
Skill gaps significantly hinder upward mobility, leaving many unable to attain housing stability despite the availability of subsidies. By 2017, HUD provided rental assistance to 2 million non-elderly, non-disabled households, whose average monthly income was just $1,664 (1). This reflects the reality that these individuals often hold low-skill, low-paying, and frequently part-time jobs. Gaining in-demand skills in fields like software development, marketing, or business administration can pave the way to higher-paying careers, breaking the poverty cycle and achieving lasting housing stability. To address these systemic challenges, individuals can pursue comprehensive education through trade schools, while private companies should invest in vocational training to build a skilled workforce. Without addressing the root causes of housing insecurity—namely, the lack of economic opportunity and workforce development—affordable housing programs will not resolve housing insecurity.
Reform land use and zoning regulations
Excessive land use regulations and restrictive zoning policies (often designated for affordable housing) drive up housing prices and exacerbate affordability issues by inflating development costs, which are ultimately passed on to consumers. In June 2022, the National Association of Home Builders (NAHB) reported that regulatory compliance accounts for nearly 25% of the cost of a single-family home and over 40% for typical multifamily developments (2). This impact is particularly evident in metropolitan areas with stringent land-use policies, such as San Francisco and New York, where housing prices are consistently much higher compared to less-regulated markets like Houston, Texas, where the average home price is $340,000 (3), contrasted with $1.3 million (4) in San Francisco. These inflated regulatory costs create a market where larger firms dominate development, as smaller developers are either pushed out or compelled to pursue more upscale projects to remain viable. The resulting lack of competition, combined with a constrained housing supply and escalating demand, leads to ever-increasing prices. It is a cyclical problem in which affordable housing programs only serve to amplify the inefficiencies driving up home and rental costs, thereby undermining long-term housing stability.
Provide mental health plans for employees
Unaddressed mental health and substance abuse issues among affordable housing recipients render these programs ineffective at achieving long-term self-sufficiency. Within the first year of placing homeless individuals with mental illness into subsidized housing, 16% to 25% lose their housing, with this rate increasing to 50% after five years (5). Substance abuse is a key vulnerability that can lead to housing loss, even after housing is secured (6). Without expanding tele-health services and counseling through employer-sponsored plans, affordable housing programs are unlikely to address the deeper issues driving instability. As a result, affordable housing programs often serve as a costly short-term solution for the community, failing to provide a sustainable path toward long-term self-sufficiency.
How DO we resolve housing insecurity?
To build a truly thriving housing market where all can participate, we need to rethink the limitations of current affordable housing programs, which can often encourage dependency and sustain market inefficiencies. Tackling housing insecurity at its core means focusing on skill development of the labor force, reform of land use and zoning regulations, and employer sponsored mental health programs. This would reduce barriers to higher paying jobs, reduce the price of homes, and increase the probability of long-term self-sufficiency. By targeting these causes of housing insecurity, we can create a more dynamic and sustainable housing market, contributing to a stronger, more resilient community.
Source Links
- https://www.huduser.gov/portal/periodicals/em/summer-fall-18/highlight1.html
- https://www.nahb.org/news-and-economics/press-releases/2022/06/new-research-shows-regulations-account-for-40-point-6-percent-of-apartment-development-costs#:~:text=Regulation%20imposed%20by%20all%20levels%20of%20government%20accounts,%28NAHB%29%20and%20the%20National%20Multifamily%20Housing%20Council%20%28NMHC%29.
- https://www.realtor.com/realestateandhomes-search/Houston_TX/overview
- https://www.redfin.com/city/17151/CA/San-Francisco/housing-market
- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2818505/
- https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2818505/
