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The past 15 years have been the most turbulent for U.S. housing markets since the Great Depression. Governments at every level—national, state, and especially local—are facing a host of housing affordability, quality, and fair housing challenges. To take stock, the Department of City and Regional Planning at PennDesign joined forces with the Fels Policy Initiaitve, the Penn Institute for Urban Research, and Housing Policy Debate to convene experts from 21 institutions across the country whose research could provide the foundation for the next generation of federal housing policy. Here, Assistant Professor of City and Regional Planning Vincent Reina, who co-organized the daylong forum with Professor John Landis, unpacked the day’s findings. The papers will be published in Housing Policy Debate in the spring of 2018.
Why have this discussion now?
We’re at a unique point in the housing market: we just went through a significant recession driven by the housing market, rents are at all-time highs, and there are concerns about what homeownership rates will look like for future generations. As John Landis points out, after the Great Depression, we created a series of forward-looking institutions and programs that shaped the housing landscape for decades to come while greatly expanding the American middle class. We have yet to see anything along those lines in response to our current challenges, despite the fact that we know a lot that we could be doing.
What stands out about the rental market today?
There’s a growing consensus that market mechanisms alone aren’t coming anywhere close to meeting our housing needs. Increasing the supply is difficult, and many people who didn’t previously believe in a government role—say, by increasing the number of subsidized affordable units—are, for the first time, saying it does have a role. This is not to say government is the solution to all of our problems, but we can all agree that we need a multipronged approach.
What’s holding back progress on homelessness?
The work around homelessness is often siloed. We have all these tools in place through the Department of Homeless Services, various HUD programs, and so on, and it’s difficult to get them all to work together. Homelessness often gets treated as a different issue than affordable housing, and that is often for the worse.
Does the research on fair housing give you more reason to be optimistic or pessimistic?
The Obama administration made a concerted effort to promote fair housing options, and a team from MIT show in a paper presented at our symposium, that these efforts actually resulted in more robust fair housing goals at the local level. There is a concern about whether these goals will continue to be supported because most of the language from the current administration suggests less of a desire to promote fair housing. In the end, fair housing only works when you include both carrots and sticks, and use legal measures for accountability. It’s an open question whether these efforts will now falls on localities, or national legal and advocacy organizations, to enforce.
And in terms of homelessness?
One of the most interesting points here was made by Penn’s own Dennis Culhanne. We’re approaching a point at which a large share of the current homeless population is reaching its natural life expectancy. This means that the needs of many of those who are homeless will change in the near future, and the face of homelessness will change over the long term. As a result, the way homelessness is approached may also need to fundamentally change.
Is the outlook for homeownership as bleak as it’s sometimes made out to be?
There are a lot of question marks. Researchers from the University of Southern California find that there’s reason to believe that, with changes in demographics, we could see growth in the homeownership rate, particularly if we close interracial education attainment gaps. Then again, there’s the whole issue of college debt, and concerns about access to credit, and down payments. At the same time, the largest population cohort—baby boomers—will soon all be passed retirement age, and how they consume housing will fundamentally affect the market. Traditional models suggest that the elderly will sell their homes, but in recent years it appears that older households are not following suit.
“We need a federal government that’s very engaged in this work.”
How could we be thinking differently about neighborhood change?
We want to invest in neighborhoods, but minimize unintended consequences like displacement. From a policy perspective, we have ways to intervene in the market, and we could target them to minimize the downside of neighborhood change. Now, a lot of people live in gentrifying neighborhoods, and it’s not just a big-city problem, this is a small city problem as well. But we’re so consumed with positive change, we’re turning a blind eye on areas that are seeing disinvestment. A large share of the neighborhoods in the country are still stagnating or declining, a reality we are well aware of here in Philadelphia.
People are also increasingly concerned about how neighborhood change impacts the ability of low-income households to access opportunity neighborhoods. There is a host of research that shows the positive impact of opportunity neighborhoods on outcomes. In my own research with colleagues from the Federal Reserve Bank of Atlanta and the University of Washington, we find that a recent adjustment to HUD’s voucher program—the largest federal rental subsidy program—was increasing the ability of households in this program to access neighborhoods with better schools, and lower vacancy and poverty rate. While the adjustment was not a panacea in every city where it was tried, it represented a positive outcome when most trends were going in the opposite direction. That said, the current administration recently suspended the adjustment, citing the need for further research. It’s our hope that this recently completed research will help fill that gap.
The forum also looked at the preservation of subsidized housing. What emerged there?
We have a lot of old subsidized housing, and owners are eligible to leave those programs, and many, but not all of them do. There are a lot of local realities involved in keeping these units in the portfolio, and as a team of researchers led by Kathryn Howell at Virginia Commonwealth University show, it takes a lot of agencies coalescing around this goal to do that.
If you’re Mayor Kenney or another government official, what do you take away from the forum?
We can’t be thinking so micro about housing issues, because they’re macro and very inter-related. We often approach one aspect of housing (e.g., the need to reduce rent burdens, increase homeownership rates, or promote access to opportunity neighborhoods), but linking those conversations is important. Preferences and markets are changing, and our traditional thinking about the life course for homeowners has changed. In many respect the incremental policy adjustment approach we are taking to solve our housing problems is not going to give us the solutions. The problems are just too big, but luckily local and national policy makers can draw from a large body of empirical evidence to determine what works.
Are the lessons here for localities or federal authorities?
We need a federal government that’s very engaged in this work. These things are structural, and often similar across markets. Fair housing, for example, is a local issue, but it’s an issue across the country. We’ve been tweaking federal programs for quite some time, but we need to be more systematic. It’s time to be bolder.
In addition to PennDesign’s Landis and Reina, authors and panelists in “U.S. Housing Policy: The Future of What Works” included: Arthur Acolin, University of Washington; Raphael Bostic, Federal Reserve Bank, Atlanta; Xavier de Souza Briggs, Ford Foundation; Barbara Brown, University of Virginia; Stefanie Deluca, Johns Hopkins University; Chenoa Flippen, Penn; Carol Galante, University of California, Berkeley; George Galster, Wayne State University; Laurie Goodman, Urban Institute; Andrew Greenlee, University of Illinois, Urbana-Champaign; Chris Herbert, Joint Center, Harvard; Claire Herbert, Drexel University; Kate Howell, Virginia Commonwealth University; Nicholas Kelly, MIT; Kelly Kinahan, University of Louisville; Hyojung Lee, Joint Center, Harvard; Mike Lens, UCLA; Brian McCabe, Georgetown University; Kruk McClure, University of Kansas; Parvo Monkkonen, UCLA; Elizabeth Mueller, University of Texas, Austin; Dowell Myers, USC; Sandra Newman, Johns Hopkins; Gary Painter, USC; Roberto Quercia, University of North Carolina, Chapel Hill; Carolina Reid, University of California, Berkeley; Akira Drake Rodriguez, Penn; Tom Sanchez, Virginia Tech; Alex Schwartz, the New School; Justin Steil, MIT; Harry Silver, Brown University; Todd Sinai, Penn; Laura Tach, Cornell University; Johanna Thunell, USC; Margery Turner, Urban Institute; Susan Wachter, Penn; and Julie Zissimopolous, USC.
