Margery Austin Turner
Over the past decade or more, federal housing policies have primarily promoted homeownership while neglecting the importance of a healthy, affordable rental sector. In many parts of the country, rents for decent homes and apartments are out of reach for low- and moderate-income households, including many who work full-time. And rental options are especially scarce where they are needed most—safe neighborhoods with good schools and access to expanding job opportunities.
It’s difficult to predict how the current foreclosure crisis—and the larger financial meltdown—will shape rental markets. Renters are front-line victims of the crisis, facing eviction (often without notice) when their landlords experience foreclosure. In the short-term, rents may come down somewhat and some homeowner housing could be converted to rentals, potentially expanding rental options in communities where few existed before. But over the medium to long term, rents will surely strain low-income families’ budgets, undermining the security and stability that children need.
Whatever happens in the coming months, we ignore the rental side of the housing market at our peril. But the solutions aren’t simple—or cheap. They need to address both sides of the market failure: families’ purchasing power (the demand side) and rental housing availability (the supply side).
First, the federal government should assume responsibility for boosting the purchasing power of low-income renters to cover the cost of decent quality housing, through a supplement to the earned income tax credit that is pegged to local rent levels and through targeted housing vouchers. Then, state and local governments should take the lead in expanding the supply of moderately priced rental units, spurred on by a combination of federal carrots and sticks.
More specifically, the federal government could require metropolitan planning organizations to produce regional housing plans in conjunction with already-mandated transportation plans. It could provide incentive grants to jurisdictions that significantly expand the availability of moderately-priced rental housing in safe neighborhoods with good job access. It could help communities hit hard by the foreclosure crisis acquire vacant properties and make them available as affordable rentals. And it could expand and retarget the Low Income Housing Tax Credit to create rental options both in distressed communities (where the broadest possible mix of incomes is needed) and in opportunity-rich communities (where more housing affordable at low- and moderate-income levels is needed).
For more information, see
“Making Work Pay Enough: A Decent Standard of Living for Working Families”
Gregory Acs, Margery Austin Turner
“Rethinking U.S. Rental Housing Policy: Build on State and Local Innovations: Housing, Cities, U.S. Department of Housing and Urban Development”
Margery Austin Turner, Bruce Katz
Other Policymaking Advice for the New President:
