Every day American cities appear to be taking one step closer to the edge of the affordable housing cliff. Unless more is done quickly some leading cities of today may be shocked at the impact.
So just how bad is the affordability of US housing today? What is the unexpected fallout that could be far greater than anticipated? What are some of the most effective solutions for sustainably bridging the gap?
The following graphic shows just how much you need to earn to buy a home today.
If you think some of these figures appear to be a little extreme, they are nothing compared to what it costs to rent a home in America. Zillow recently reported that it is now twice as expensive to rent as buy a home in the US.
Unfortunately, this time around American incomes are falling while housing costs are rocketing.
The Fallout of a Lack of Affordable Housing
Expensive housing is one thing. When it reaches the point that key workers can’t afford to live near jobs, and are priced out of the areas they have been raising their kids in, it becomes quite another issue.
Abc 7 News San Francisco reports that in the Bay Area the lack of affordable housing in CA has reached such proportions as to begin to prevent good teachers from being recruited, and is creating a shortage of credentialed teachers. Certainly this doesn’t just apply to teachers either. What about healthcare workers? In recent years more than a couple of destinations, including major cities like Detroit, and parts of Las Vegas and SW Florida have been unable to support a law enforcement department capable of effectively defending its citizens. In other areas initiatives to bump up local government funding have led to major issues between the public and law enforcement.
Ultimately lack of affordable housing can not only lead to a lack of quality teachers, but then poor education, poor healthcare services, lousy law enforcement and poor safety, as well as a weakening talent pool for local businesses. Put simply; unless San Francisco and other pricey cities want to become the next Detroit’s housing affordability is something that needs to be tackled.
So what can be done to improve the affordability of housing?
Finding Effective Affordable Housing Solutions
A new Carmel Valley project aims to preserve green space, and keeping housing tighter by building more densely with a new mixed-use community. While micro-apartments may have the potential to be less expensive, and cut down on travel expenses; so far dense building has so far only equaled more pollution, paving the way for more dense building, and with less happiness.
Do people really want to live here? Or are they just being told they should want to, and have few options? Every home buyer survey seems to suggest that what home buyers really want is more space. The internet and remote working is helping to make it possible for a much larger majority of the population to live anywhere and work. Cities that are not prepared for this could be in trouble when demand for their real estate slides.
RJ Martin of Coldwell Banker in Oahu, HI has been one of the most progressive leaders in pioneering new development that is green and affordable, even in some of the nation’s highest cost zones. He reminds us that green, sustainable, and affordable should all be working together, and it is possible.
Unfortunately, right now America seems to be lagging much of the world in sustainable housing developments. The UAE has entire 100% sustainable cities, and India is on the way to building 100 smart cities.
There is a lot we could be doing in the US to simultaneously increase our greenness, and affordability, while boosting real sustainability. We can do this in urban areas with urban community gardens and farms and aquaponics, and potentially even buildings which can cultivate solar and wind energy with their exteriors, but do they plan this?
In March 2015 the National Housing Conference Open House Blog highlighted that in order to get real traction from the top politicians need to be pressed with the residual benefits of affordable housing such as job creation, and more effective use of capital, rather than just the “need for housing” that many can’t relate to.
Some see rent controls as the option, and others allowing developers to build more freely. To date neither option has appeared to provide a solution at scale. North Dakota recently was promised $200,000 in federal funding to help with the situation there, but that won’t go far at all. The County of San Francisco, CA has the Teacher Next Door Program (TND) which offers a form of down payment assistance. However, what may be more appealing and motivating to both public and private parties with the power to take action on a larger scale may be working in tandem through programs like Help to Buy in the UK. Instead of simply providing grants, and builders taking a loss to provide affordable housing (which is hard to explain to shareholders); if local government provide 20% down payments in return for modest interest or equity participation developers could move more units and the city and county could dramatically increase revenues, while ensuring more affordable housing and higher homeownership rates.
Mesocore has the perfect model for this in the 100% sustainable hybrid home. They are strong, green, look good, balance green space and conservative living, and are very affordable.
They are already being shipped to provide affordable housing solutions abroad, but many, many more units could be used to solve the crisis in the US.
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