“Housing is a necessary of life.”

United States Supreme Court

Block v. Hirsch, 256 U.S. 135, 156 (1921)

(per Justice Oliver Wendell Holmes, Jr.)

 

Despite the general recognition of the crucial importance of a good home to human development, tens of millions of low- and moderate-income Americans do not have the opportunity to buy or rent decent housing in wholesome neighborhoods. 

Exclusionary governmental housing practices (“regulatory barriers to housing affordability”), such as exclusionary zoning, are a major part of the problem. "State and local regulations are among the principal culprits behind the nation’s persistent affordability problems,” according to the Harvard University Joint Center for Housing Studies. For more about those regulatory barriers, please click on EXCLUSIONARY HOUSING PRACTICES.

The Equitable Housing Institute (EHI) is a charitable organization that focuses on eliminating exclusionary housing policies in the United States, in order to reduce homelessness and poverty. EHI is the only national organization focused primarily on removing those barriers for all low- and moderate-income Americans. For more, please click on ABOUT EHI.

 

EHI ARTICLES

 

Amazon headquarters expansion brings housing challenges along with job growth to New York City and the Washington, DC, area

 

The two new headquarters locations (“HQ2s”) announced by leading online retailer Amazon on November 13, 2018, have had proactive leadership in support of housing affordability—especially multi-family housing. The housing challenges posed by Amazon’s HQ2’s should not be underestimated, however.

Amazon chose a site in Northern Virginia, and one in New York City, for those new headquarters. It pledged to create 25,000 jobs at each site by 2030. Amazon also announced that it will hire 5,000 workers in Nashville, Tennessee, as part of a new operations hub responsible for customer fulfillment and similar activities. At all three locations, Amazon says the average salary will be at least $150,000.

Amazon had emphasized during the bidding process that favorable housing conditions would be among the important factors in its decision. Its emphasis on housing is consistent with the growing importance that employers are placing on the availability and affordability of housing, when deciding where to locate operations. American workers are showing the same preference (as discussed in the housing costs item below, and in HOUSING COSTS 2018).

It will take concerted efforts, by local and state governments in areas affected by Amazon’s expansion, to meet the substantial challenges to housing affordability that its buildups pose. In Seattle, where Amazon’s original headquarters has grown to about 40,000 workers, city officials in 2015 declared a state of emergency over homelessness. Rents escalated, and some landlords advertised that they would prioritize Amazon, Microsoft and Google employees over other prospective tenants.

However, there is cause for optimism that Amazon’s HQ2 cities can handle the housing effects of the company’s prodigious growth better, based on lessons learned from Seattle. EHI will continue to monitor the housing effects of Amazon’s expansion. For more on the housing impacts of Amazon’s HQ2’s, please click on AMAZON HQ2’s BRING HOUSING CHALLENGES.

 

Despite rising wages, housing costs remain daunting in 2018 for high percentage of low- and moderate-income Americans

There was good news on wage growth for low- and moderate-income Americans this Fall, but housing costs continued to rise at a higher rate than wage gains. Wages rose an average of 2.9 percent from September 2017 to September 2018, according to the Labor Department’s Employment Cost Index for civilian workers. That increase was the largest since 2016.

However, when adjusted for inflation—notably in gas prices and rent—workers’ wages grew only 0.6 percent over the year. The average cost of renting one’s primary residence rose about 3.6 percent during that period—continuing a long pattern of increasing at a faster rate than overall inflation and wages. (Rental housing costs are a major concern of low- and moderate-income Americans, because most of them are renters, and housing costs generally consume a higher percentage of their incomes.)

About 37 percent of U.S. households rent their housing. Harvard University’s Joint Center for Housing Studies reported this past summer that, based on the latest comprehensive data available:

• The cost-burdened share of renters (those who spend more than 30 percent of their household income for housing) doubled from 23.8 percent in the 1960s to 47.5 percent in 2016.
• Adjusting for inflation, the median rent payment rose 61 percent between 1960 and 2016, while the median renter income grew only 5 percent.
• For homeowners, the pattern is similar, with the median home value increasing 112 percent and the median owner income rising only 50 percent.

The share of cost-burdened households continues higher among black (45 percent) and Hispanic households (43 percent) than among Asian and other minority households (36 percent) and white households (27 percent).

In the Washington, DC, area (where EHI has concentrated its local advocacy), a strong housing construction sector has kept rental cost increases well below national averages. For example, rent increases in that area were under the 2.2 percent rate of general inflation, year-over-year as of the first quarter of 2018 (along with many other major apartment markets tracked by RealPage).

With the exception of the DC area, only secondary and smaller housing markets (such as fast-growing Austin, Boise, Charlotte, Des Moines, and Raleigh/Durham) have seen stable or rising population growth since 2015. Also, job growth generally has been greater in secondary and tertiary urban markets than in the nation’s largest metropolitan areas since the beginning of 2017. The 2017 federal tax reform statute appears likely to accelerate those patterns.

The prevalence of exclusionary housing practices (a/k/a regulatory barriers to housing affordability) in the nation’s largest and most productive metros have been a major cause of population and job growth shifting to smaller urban areas. Regulatory barriers to housing affordability remain a leading cause of the nation’s housing problems. For more, including sources, please click on our website article HOUSING COSTS 2018.

EHI works toward creation of better “carrot” and “stick,” to encourage more local governments to approve needed, new housing

 

By 2017, a virtual consensus had emerged—among housing policy experts, economists, and even Presidents of the United States—that land use regulations often include major, widespread barriers to housing affordability (a/k/a exclusionary housing practices), and that serious reform is needed. (For more on that consensus, please click on EMERGING CONSENSUS ON REGULATORY BARRIERS TO HOUSING AFFORDABILITY.) 

In addition to exclusionary zoning (mentioned above), those barriers include provisions of many local subdivision codes, and many other regulations that unduly restrict housing development where it is needed. Those provisions deprive low- and moderate-income Americans of the opportunity for housing they can afford, within a reasonable distance from their jobs.

Those exclusionary land use regulations also interfere with the opportunity of low- and moderate-income Americans to live in safe, wholesome neighborhoods with high-quality public schools, health care facilities, and other key services. For more about those regulatory barriers, please click on EXCLUSIONARY HOUSING PRACTICES.

The emerging consensus on the need for reform is very gratifying to the Institute (EHI), which has been advocating the removal of those barriers, and has been taking action locally to remove them, since its formation in 2008. EHI is the only national organization focused primarily on removing those barriers for the benefit of all low- and moderate-income Americans.

EHI now is focusing on effective ways to remove those barriers. The vast majority of land use regulations and decisions in America are made by local governments, through their elected officials (mayors, council members, etc.). Because the voters are the current residents of the jurisdiction, residents’ attitudes are crucial to whether enough housing will be permitted in the community. EHI believes that a better “carrot” and “stick” are needed to motivate more local governments to meet housing needs.

 Toward a better “carrot”: pursuing “win/win” solutions with current residents to resolve concerns about permitting needed, new housing in their area

 

Residents’ resistance to permitting new housing in their area is probably the chief, underlying obstacle to creating enough housing in the right places, suitable for the low- and moderate-income people who need it. That resistance—often called NIMBY (“Not In My Back Yard”) sentiment—is quite powerful, because the local officials responsible for decisions on housing issues are either elected by those residents, or appointed by elected officials.

Any new housing development, or any other land use that has potential side-effects on existing residents, will get a predictable response from those residents: “How will the development impact me and my family?”

Residents in the area may have a myriad of concerns. Typically, among the biggest worries are the risks of increased traffic congestion, loss of open space, lower property values, and/or higher taxes resulting from the development. Such adverse impacts generally can be avoided, but doing so takes careful planning and follow-through.

The surest way to overcome the NIMBY syndrome is to make sure that the vast majority of people in the area understand that the benefits that will flow to them and their community from the new development will outweigh whatever costs and impacts they are likely to experience. It appears that such a “win/win” solution often can be achieved through: (1) sufficient analysis and explanation to residents of the actual facts, combined with (2) a reasonably supportive attitude by the local government.

For example, the local government often can provide assurances pro-actively, early on, that it can commit adequate funding to make the needed infrastructure improvements (roads, schools, and other public services)—without heaping new tax burdens on current residents. The necessary public funding usually can be supplied from the increased tax revenue generated by new development overall, including commercial growth (such as new office, retail, and industrial development). Commercial growth typically provides a great deal of net tax revenue to the locality.

For more about strategies for overcoming the NIMBY syndrome, please click on PURSUING “WIN/WIN” SOLUTIONS TO MEETING HOUSING NEEDS.

Toward a better “stick”: making local governments responsible for the full cost of their exclusionary housing practices

 

Recent analyses have concluded that the limited efforts to date at the local, state and federal levels, to control regulatory barriers to housing affordability have failed to solve the overall problem. (For more on those studies, please click on EMERGING CONSENSUS ON REGULATORY BARRIERS TO HOUSING AFFORDABILITY, p. 4.)

Among the needed reforms is effective legislation to prohibit and remove those barriers. EHI is analyzing the lessons learned from previous reform efforts, in order to create a more effective approach.

EHI recently has studied a legislative approach that has substantially increased the ability of victims of exclusionary zoning to overcome it—albeit in a quite different context. That approach is embodied in a federal statute that protects religious institutions from discriminatory land use practices. Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”), 42 U.S.C. §§ 2000cc et seq.

There is general agreement among commentators that a key to RLUIPA’s success is its provision for reimbursement of the full costs (including necessary legal expenses) of proven victims of exclusionary zoning. Other laws and judicial decisions that have prohibited exclusionary land use practices generally do not authorize reimbursement of the legal expenses of the victims.

The federal Fair Housing Act (“FHA”) is an exception. It permits full reimbursement for necessary legal expenses and other costs, where the victims are members of a protected minority group. (The FHA protects people from housing discrimination based on their race, color, religion, sex, handicap, familial status, and national origin.) Maximum use should be made of the FHA in those situations.

However, the FHA is not designed to solve the overall problem of exclusionary housing practices. Though the FHA helps “level the playing field” for minority group members, exclusionary housing practices would keep the “playing field” of American housing opportunities seriously deficient, even if it were level. Residential segregation of Americans by income has increased a great deal during the last several decades, even though residential segregation by race has been declining, with the help of the FHA.

Effective, new legislation at the state and/or federal level appears necessary to overcome the general problem of exclusionary housing practices. Whatever legislative approach is taken, we recommend that it include a provision for full reimbursement to successful claimants of the necessary expenses of vindicating their rights. For more on EHI’s analysis of cost reimbursement under RLUIPA, please click on MAKING CHALLENGES TO EXCLUSIONARY HOUSING PRACTICES FEASIBLE: THE RLUIPA EXPERIENCE.

EHI celebrates achievements on its tenth anniversary

 

EHI is celebrating substantial achievements as it turns ten years old. (EHI became a tax-exempt, legal services nonprofit organization on September 19, 2008, under Section 501(c)(3) of the Internal Revenue Code.)

EHI has made significant progress in combating regulatory barriers to housing affordability (a/k/a exclusionary housing practices), both locally and nationwide. For example, EHI’s reports on housing problems of low- and moderate-income Americans across the United States, and solutions to those problems, have promoted the emerging consensus (discussed above)—among housing policy experts, economists, and even Presidents of the United States—that:

• Land use regulations often include major, widespread barriers to housing affordability for low- and moderate-income Americans; and
• Those barriers are so serious that broad-based reforms are needed.

Locally, EHI has played a substantial part in the addition of more than 27,000 new housing units to plans or draft proposals by local government land use agencies in Northern Virginia—part of the Washington, DC, region, and EHI’s home base. More than 3,000 of those units would be affordable to low- and moderate-income people, and reserved for them.

For more, please click on EHI's FIRST TEN YEARS. 

 

MORE EHI ARTICLES

 

• Housing growth is a central issue as Loudoun County, Virginia--—a rapidly growing outer suburb of Washington, DC, that will have two Metrorail (commuter rail) stations to connect it to the rest of the region----deliberates a revised, countywide land use plan. For more, please click on LOUDOUN COMP PLAN HOUSING ISSUES.
• The U.S. Supreme Court ruled in 2015 that the federal Fair Housing Act prohibits housing practices that have a disproportionately adverse effect on members of minority groups—unless those practices have a justifiable purpose and properly limited scope. For more, please click on SUPREME COURT DISPARATE IMPACT DECISION.
• For background information on the U. S. Dep't of Housing and Urban Development's (HUD's) Affirmatively Furthering Fair Housing Rule (July 2015), please click on HUD issues AFFH Rule.
• Major report by McKinsey Global Institute finds that overcoming exclusionary housing policies is the most critical step in providing affordable housing--in the United States and around the world. For more, please click on McKINSEY REPORT ON MEETING GLOBAL HOUSING AFFORDABILITY CHALLENGE.
• EHI memorandum summarizes how exclusionary housing policies aggravate housing problems that have been linked to increased developmental problems among low-income children. Among those problems are children's health (physical, mental and emotional), safety, educational achievement, and general cognitive and behavioral development.. For more, please click on CHILDREN'S DEVELOPMENT & XHPs. 
• Inside Philanthropy urges funders to support EHI’s efforts to break the grip of exclusionary zoning and other exclusionary housing policies on housing opportunities for low- and moderate-income people. For more, please click on Inside Philanthropy urges funders to support EHI. 
• EHI letters printed by Washington Post highlight serious, adverse effects of local housing and land use policies For more, please click on EHI LETTERS IN WASHINGTON POST. 

• EHI analyzes whether Congress has Constitutional authority to prohibit unwarranted state and local regulatory restrictions on housing supply, if those restrictions affect interstate commerce—as a number of recent studies indicate they now do. For more, please click on INTERSTATE EFFECTS OF REG. BARRIERS (2015).

• One affordable housing unit per day is added to plans in EHI's home county, following EHI's advocacy, during its first five years (2008-2013). For more, please click on EHI's FIRST FIVE YEARS.

• EHI issues analysis of role of governmental land use planning in housing shortages and excessive costs. For more, please click on EHI ANALYSIS OF JOBS-HOUSING REPORT

 

Equitable Housing Institute

P.O. Box 1402