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A New Housing Policy:Imagine the Possibilities
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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.
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» 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
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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.
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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.
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America Wants Rental Housing
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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.
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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.
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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.
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America Needs Rental Housing
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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
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Infrastructure
» Sprawl is expensive!
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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.
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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.
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New Housing Policy Paradigm
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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
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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
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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
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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.
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Change the Economic Climate
» Bridge the gap between construction costs and affordable rents.
www.nmhc.org/goto/workforcehousing
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Federal Incentives
» Fully fund and reform the Section 8 program.
» Fix the Low-Income Housing Tax Credit program.
» Enact Exit Tax Relief
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Imagine the Possibilities
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Douglas M. BibbyPresidentNational Multi Housing Council
Web Site: www.nmhc.org E-Mail: [email protected] Phone: 202/974-2300
Thank You