By many measures, 2015 will be a period of transition in housing policy and planning. Home price appreciation is expected to cool in 2015 and a change to federal policy may lead to new opportunities for first-time homebuyers. At the same time, slow wage growth and construction activity will increase rental affordability challenges. Demographicand policy changeswill create demands for new housing types and opportunities for service delivery. And localities will be called upon to proactively plan for ways to build inclusive communities.
What do you need to know in 2015? NHC’s Center for Housing Policy planned a research agenda for 2015 that responds to the policy, economic and demographic factors shaping the affordable housing landscape, with the goal of producing research to help policymakers and practitioners expand housing opportunities. Our research in 2015 will include analysis of five key issues that will be at the forefront of the housing discussion this year:
Demographic change and housing demand. In communities across the country housing needs will be shaped by significant changes in the demographic makeup of the population. As part of our work to better understand, explain and forecast housing needs, the Center will analyze the relationships between key demographic trends and affordable housing needs and policies.
By 2030, one in five people in the U.S. will be age 65 or older, and it is critically important to understand the characteristics and housing needs of this population. In 2012, the Center published a report on the housing needs of the growing older adult population. Last year, we conducted additional research on seniors’ housing needs with a report on supportive housingand worked collaboratively with the AARP Public Policy Institute (an NHC Leadership Circle member) on a project demonstrating effective policies for meeting the housing needs of older adults. In 2015, we will continue our analysis of the housing needs of seniors and evaluation of best practices in meeting those needs.
The U.S. population will turn majority minority between 2040 and 2050. The way in which the racial and ethnic composition of the country is changing will have important implications for future housing demand and housing policy. The Center will pursue research to help us better understand housing needs and preferences of fast-growing minority groups—particularly Hispanics—and make recommendations for ensuring this segment of our population has access to affordable housing.
Alternative measures of housing affordability. The nearly universal measure of housing affordability compares housing costs to household income; housing expenditures that exceed 30 percent of a household’s income have typically been viewed as an indicator of an affordability problem. This 30 percent rule of housing affordability evolved from the National Housing Act of 1937 and subsequent federal legislationdefining income and rent limits for housing programs. The housing affordability measure has become a somewhat arbitrary benchmark that fails to account for the many other factors that determine how much an individual or a family can spend on housing and still have enough left over for other necessities.
The Center for Housing Policy has led important research on how combined housing plus transportation costs can be a better measure of housing affordability. With new location affordability data available from HUD, the Center will analyze the housing and transportation cost burdens among very low-income households to better understand the tradeoffs families make and to assess equitable housing and transportation policies.
In addition, in conjunction with our annual Paycheck to Paycheck report, will we will develop a national picture of the household expenses of working families, including housing, transportation, child care, health care, clothing and other expenses, and analyze how other household expenses impact the ability of low- and moderate-income households to pay for housing. The results from this analysis will provide a foundation for additional research on a more comprehensive definition of housing affordability.
The Intersections and Opportunities Around Housing and Health. Extensive research has documented the importance of stable and affordable housing in promoting health and well-being. The Affordable Care Act (ACA) and Medicaid expansion provide new opportunities for combining housing and health services to achieve better outcomes for low-income individuals and families.
As part of the Center’s efforts to open dialogue between the housing and health communities, we will undertake several projects around the intersection of housing and health in 2015. We will update our 2011 review of the research on the impacts of housing on health, develop case studies of successful programs that have integrated housing and health services and review the research on cost effectiveness of connecting housing and health services. The primary goals of this work are to provide a link between housing and health professionals and to lift up best practices for combining housing and health services.
Building inclusive communities. In 2014, HUD released the proposed Affirmatively Furthering Fair Housing (AFFH) rule, designed to end patterns of segregation and create more inclusive communities, wider pathways to economic improvement and more opportunities for individuals and families to flourish. In 2014, NHC and the Center submitted comments on the proposed fair housing assessment tool, suggesting ways in which HUD could improve the design and release of the tool to help local communities advance their fair housing goals. In 2015, the Center will continue to do work that supports local fair housing efforts by analyzing common barriers to developing local strategies for AFFH implementation and making recommendations based on a review of best practices from around the country.
Inclusionary zoning policies can be a key mechanism by which localities plan for housing that is affordable to individuals and families all along the income spectrum. The Center has been a leader in research and best practices on inclusionary housing policies, including a research report on inclusionary housing and lasting affordability and achieving inclusionary housing through upzoning, both completed in 2014. This year we will continue our research on inclusionary housing, including a review of best practices in mandatory versus voluntary inclusionary housing programs and a comprehensive review of the impacts of inclusionary housing programs on local economies and housing markets.
As part of our efforts to be a resource to local policymakers and practitioners, we will also compile a comprehensive set of resources on inclusionary housing programs, as an extension of our HousingPolicy.org site. This online resource will be a “go-to” portal on inclusionary housing, with research summaries, case studies and other resources for practitioners and researchers.
The nature of homeownership. This year could bring significant change to the homeownership market and it is important to understand the implications of new policy directives and market conditions. The housing market has rebounded in most places across the country, but there are signs that that the run-up in prices will slow in 2015. The Federal Housing Finance Agency (FHFA) released new guidelines for first-time homebuyers which will allow a return to three percent down payments on home loans backed by Fannie Mae and Freddie Mac, a move which could bring more first-time homebuyers in the market in 2015. Access to homeownership among lower-income households and racial and ethnic minorities slowed considerably after the downturn, but there is concern that loosening mortgage requirements may lead to another round of foreclosures.
This year, the Center will pursue research projects to help the housing community better understand the impacts of federal policies related to homeownership, including the effects on the ability of first-time homebuyers to enter the market and the prospects for homeownership to reduce the growing wealth divide.
In addition, building on prior research on shared equity homeownership, the Center will pursue research that examines alternative means of homeownership, including not only shared equity homeownership, but also lease-to-own and other models. As a result of this review, we will better understand the avenues to open up homeownership to more households and also assess critically the opportunities for broad alternative homeownership models, as opposed to local, niche models.
As we head into 2015, we are excited about pursuing a research agenda that touches on issues at the forefront of the housing policy discussion. In addition to these lines of research, we will have a number of other projects underway in 2015, including Housing Landscape, our annual report on severely cost-burdened households, and Paycheck to Paycheck, our interactive tool and report on affordability for key workers in the community.
But we want to hear from you! What research would be most helpful to you in 2015? I welcome your emails (to LSturtevant@nhc.org) on ideas for research reports, data, analysis and case studies that would be a help to you as you do your work on the ground helping to create affordable housing opportunities for individuals and families. Happy 2015!