Building a Better Ladder of Housing Opportunity in the United States
Introduction
Housing Opportunity in the United States has become increasingly elusive for millions of Americans as the nation faces intersecting crises of affordability, racial inequality, and climate change.
The COVID-19 pandemic has only intensified these long-standing challenges, exposing deep vulnerabilities in the housing system and leaving millions facing eviction and housing instability.This comprehensive framework outlines how federal housing policy must be reimagined to create a more holistic, equitable, and sustainable approach to ensuring Housing Opportunity in the United States for all.
The Current Crisis Facing Housing Opportunity in the United States
The housing crisis in America has been decades in the making, with homeownership becoming harder to access and rents increasingly unaffordable for millions of households. Even before the pandemic, more than 20 million households paid rent, consuming over 30% of their income.
The pandemic has exacerbated these structural hardships, with delays in federal relief leaving millions facing mounting rent shortfalls and eviction prospects. By January 2021, delinquent renters were already behind by $57 billion in missed rent payments, late fees, and utility bills.
The current federal housing policy framework is fragmented and inefficient, encompassing more than 160 programs administered by 20 different entities. This proliferation creates overlapping and duplicative programs plagued with gaps that leave vulnerable populations without needed support.
Housing Opportunity in the United States is hindered by this fragmentation, which generates advocacy for specific programs rather than the health of the entire housing system.
Funding flows through jurisdictional borders that don't reflect the regional nature of housing and labor markets, creating stark divides between renters with assistance and those without, and between renters and homeowners.
Right-Sizing Assistance to Expand Housing Opportunity in the United States
To build a better ladder of Housing Opportunity in the United States, federal policy must reorient its approach to housing assistance. This requires not only stabilizing vulnerable households but also facilitating transitions to other rungs on the ladder, including homeownership, by easing housing-related cost burdens.
The framework proposes making housing assistance "universal" for extremely and very low-income households who need it, potentially through an expanded and modernized housing voucher program.
However, expanded assistance must avoid pitfalls encountered in existing programs. Not all households issued Housing Choice Vouchers can use them due to landlord discrimination, payment standard misalignments, and difficulties crossing jurisdictional boundaries.
Housing Opportunity in the United States requires expanded assistance coupled with housing counseling supports and strengthened renter protections, including barring source-of-income discrimination and removing exacting credit thresholds.
The framework also recommends creating a targeted renter's tax credit for those phasing out of eligibility for rental assistance as incomes rise. This would mitigate unintentional work disincentives and allow low- and moderate-income renters to shift budgets from overly burdensome housing costs to other priorities like education or down payment savings.
Housing Opportunity in the United States also demands reforming the Mortgage Interest Deduction to make housing-related tax expenditures more progressive and better support access to affordable homeownership.
Currently, homeowner tax expenditures cost the federal government over $79 billion in foregone revenue—more than HUD's entire net discretionary budget and almost twice what's spent on rental assistance.
These disparities perpetuate racial inequities, as discriminatory policies have excluded people of color from homeownership access. In 2018, the Black homeownership rate trailed non-Hispanic White households by 30 percentage points.
Housing Opportunity in the United States requires dismantling these disparities and reorienting funding to target households that most need assistance.
Expanding Supply to Strengthen Housing Opportunity in the United States
Addressing housing opportunities in the United States requires expanding and harmonizing housing supply-oriented resources and tools.
Creating a better ladder demands a greater mix and balance of housing options located in places that expand access to opportunity, dismantle residential segregation, and create climate resiliency.
The federal government must streamline programs subsidizing affordable housing production while removing regulatory barriers to building in higher-resource areas.
The framework recommends creating flexible supply-side subsidies operating at a multi-jurisdictional scale. This would involve adapting, combining, and augmenting existing federal funding sources to enable production and preservation of diverse housing options.
Deploying these subsidies through regional entities would better align housing policy with the scale at which housing market's function, facilitate efforts to dismantle racial segregation, and allow closer coordination with economic development, transportation planning, and climate mitigation goals. Housing Opportunity in the United States depend on this regional approach.
Current funding formulas are overdue for revision. The Low-Income Housing Tax Credit (LIHTC), for example, is allocated based on per capita distribution without considering which markets most need new supply versus where supply constraints are less critical.
Housing Opportunity in the United States requires revisiting how credits are allocated and providing federal guidance on targeting provisions within Qualified Allocation Plans.
Better alignment or consolidation of federal funding sources that layer with LIHTC would reduce costs and complexity, allowing resources more flexibility to respond to changing market needs.
The framework also recommends aligning other financing tools to support unsubsidized housing production that advances broader affordability.
Federal Housing Administration and GSE financing products could support moderate- and middle-income housing options affordable without subsidy, offering a more seamless approach to federal mortgage credit guarantees.
Housing Opportunity in the United States requires bridging the missing rungs that make it difficult for assisted households to transition to unsubsidized options.
Strengthening Accountability for Housing Opportunity in the United States
The effectiveness of expanded and better-targeted subsidies hinges on implementing robust accountability mechanisms. Housing Opportunity in the United States requires curbing exclusionary housing policies and practices, incentivizing pro-housing policy adoption, and ensuring localities and private market actors meet fair housing and lending obligations.
Federal policymakers must create a cohesive system of accountability by strengthening regulatory tools and leveraging funding streams to require localities to meet statutory obligations.
The framework recommends reactivating and strengthening the federal regulatory framework, including reinstating and strengthening mechanisms like the Affirmatively Furthering Fair Housing (AFFH) rule, disparate impact standard, Community Reinvestment Act, and Duty to Serve obligations.
Housing Opportunity in the United States depends on these tools to enforce fair housing, guard against racist policies, and hold localities accountable for executing pressing housing, equity, and climate imperatives.
Existing block grant funding should be conditioned on jurisdictions documenting policies that allow—and don't actively bar—a level and mix of housing types supporting affordability and advancing fair housing and sustainability principles.
Housing Opportunity in the United States also requires tying new funding to regional housing goals with performance incentives. Regions would need to conduct comprehensive assessments to set holistic production and preservation goals advancing economic inclusion, racial justice, and climate resilience.
States like Massachusetts, Oregon, and California have adopted mechanisms to overcome exclusionary practices, offering models for federal efforts. Housing Opportunity in the United States can benefit from lessons learned from these state and local initiatives.
Successfully implementing coordinated incentives and robust accountability requires a durable evaluation system tracking performance against consensus goals and metrics.
Advancing Implementation of Housing Opportunity in the United States
The Biden administration has an opportunity to chart a better course for federal housing policy, as housing intersects with priorities of COVID-19 response, economic recovery, racial equity, and climate change.
The framework's policy reforms would lay a foundation for big, long-term systemic changes while providing an organizing framework for near-term reorientation.
Housing Opportunity in the United States requires careful sequencing and deployment of expanded rental assistance, pairing increased investments with improved efficiency of existing resources, and restoring regulatory oversight.
Reconfiguring a longstanding system and dismantling its inefficiencies, racial injustices, and unsustainable patterns is complex work requiring years, not weeks or months. However, actions taken can lay the foundation for transformational change.
Housing Opportunity in the United States demands building a better ladder that helps the nation finally achieve the 1949 Housing Act's goal of "safe and affordable housing for all."
The framework emphasizes that money alone won't change exclusionary patterns or curb negative environmental impacts. Regulatory oversight must coordinate with funding to ensure localities and private market actors redraw the housing landscape in more equitable and sustainable ways.
Housing Opportunity in the United States requires ongoing data collection and research to shape, evaluate, and improve interventions as reforms roll out.
Only through comprehensive, coordinated action across demand-side assistance, supply-side production, and regulatory accountability can we ensure Housing Opportunity in the United States becomes a reality for all Americans, not just a privileged few.