A New Housing Policy:Imagine the Possibilities

Rental HousingNot Housing of Last Resort

» 24 million households—more than 20 percent—call an apartment their home.

» Their numbers are growing.

» In 2006, Harvard’s Joint Center for Housing Studies predicted an increase of 1.8 million renters by 2015. Instead, we saw a surge of 1.5 million renters from 2005 to 2007 alone.

» In 2006, the federal government spent approximately $216 billion on housing programs and tax expenditures.

» 73 percent went to homeownership; just 27 percent went toward rental housing.

» We spend more on the deductions for mortgage interest and property tax than the combined federal spending on education, roads, mass transit and national parks.

The Homeownership Bias

Housing Policy Disconnect

» America WANTS rental housing.

» America NEEDS rental housing.

» Renters are not Second-Class Citizens

» Tremendous opportunity to undo mistakes of the past.

Growth = Choices and Opportunity

» The U.S. population is expected to increase 33% by 2030 to 376 million.

» That’s 94 million more people than there were in 2000.

» To accommodate that growth, we need 60 million new housing units.

America Wants Rental Housing

Future Housing Demand

» 78 million Echo Boomers getting ready to enter the housing market, almost universally as renters.

– By 2015, there will be 67 million people aged 20-34, in other words, people in their prime renter years.

» 10 million immigrants who will come to this country in the next 10 years.

Build for New Choices

» For 50 years, families with children drove America’s housing industry.

» But married couples with children are projected to decline to just 1 in 4 households by 2025.

» By 2020, singles and unrelated individuals living together will comprise one out of every three households.

Profound Housing Policy Disconnect

» Half of all new homes built between now and 2020 will have to be rental units.

» The U.S. will have a likely surplus of 22 million large-lot homes—that’s houses built on a sixth of an acre or more—by 2025.

» That's roughly 40 percent of the large-lot houses in existence today. Our housing policy has to be amended to reflect our changing preferences.

America Needs Rental Housing

Environmental Factors

» If we can shift 60 percent of new growth to compact, walkable neighborhoods—the kinds where apartments are found—we would save 85 million metric tons of carbon dioxide annually by 2030.

» Compact Development: – Preserves green space– Reduces damage to streams, lakes and rivers by

reducing the amount of paved surfaces – Reduces air pollution by reducing the need to

drive

Infrastructure

» Sprawl is expensive!

Make the Most of What We Have

» Compact development reduces infrastructure costs and saves money.

» Nationally, the U.S. can save over $100 billion in infrastructure costs over 25 years by growing compactly.

» Chicago can save $3.7 billion over 20 years by growing compactly.

The Affordable Housing Shortage

» 35 million households spend 30 percent or more of their annual income on housing.

» 114 million people live in households that did not earn enough ($37,105) to reasonably afford a two-bedroom apartment.

New Housing Policy Paradigm

Change the Dialogue

» End the myths that apartments cause crime rates to spike and property values to plummet.

» Owners benefit from having rental housing in their communities.

Renters are Not Second-Class Citizens

Change the Dialogue

» It costs $311 less a month, on average, to rent than to own.

» A $100 investment in housing in 1985 would be worth $270 today, while that same $100 placed in stocks would be worth $722—nearly two-and-a-half times as much.

Housing is Shelter, Not an Investment

Change our Policy Paradigm

» Current incentives overwhelmingly benefit the wealthy and distort the economy by encouraging people to overinvest in housing.

» Large numbers of renters will not undo our society.

– Switzerland has a homeownership rate of 35 percent.

– Germany has a homeownership rate of 42 percent.

No New Homeownership Incentives

Change the Regulatory Climate

» Zoning and land-use regulations that favor sprawling, car-dependent development.

» Federal, state and local policies should encourage the development of compact, sustainable housing located near transportation and employment centers.

Change the Economic Climate

» Bridge the gap between construction costs and affordable rents.

www.nmhc.org/goto/workforcehousing

Federal Incentives

» Fully fund and reform the Section 8 program.

» Fix the Low-Income Housing Tax Credit program.

» Enact Exit Tax Relief

Imagine the Possibilities

Douglas M. BibbyPresidentNational Multi Housing Council

Web Site: www.nmhc.org E-Mail: info@nmhc.org Phone: 202/974-2300

Thank You