on Mar 21, 2018
How Should Cities Set Goals to Address Housing Affordability?
Housing affordability is on everyone’s mind, especially in cities. Rents are rising faster than incomes, housing production has not kept up with demand, and, in many cities, more and more households are rent burdened – spending more than 30% of their income on housing.
As stewards of local housing policy, local governments are the key to providing solutions to combat the challenges of an affordability crisis. By enacting proactive preservation and development policies for affordable housing, local governments can stem associated issues like displacement and disproportionate inaccessibility to transit, employment hubs, and neighborhood amenities for lower income residents.
AFFORDABLE HOUSING IN A RECOVERING MARKET
As population loss slows and new buildings rise, Detroit is beginning to see signs of recovery and growth. But, new investment and rising housing prices have also created pressure on housing affordability. And, while average housing costs in Detroit are lower than in other markets, 57% of renters pay more than 30% of their income toward housing.
In other areas of the city, decades of disinvestment have left neighborhoods without urban amenities, and a regulated affordable housing stock at risk of obsolescence or loss of affordability.
The City has proactively pursued affordable housing transactions and has begun implementing policy to support its objectives, but it did not have a formalized strategy for pursuing policies and programs to realize its equitable growth goals. HR&A worked with the City to develop a strategy for tackling affordability by preserving and developing 12,000 units of affordable housing by 2023.
To address these and similar affordable housing challenges cites can create a affordability strategy in five steps:
The City designed the strategy to meet two main goals: ensure rising housing costs are met with the creation of new affordable housing, and that investment in key neighborhoods includes preservation of existing affordable housing.
Guided by our analysis of the local housing market and proposed affordable housing policy, the City recognized an opportunity to expand initiatives to preserve a greater share of already affordable housing stock, including naturally occurring affordable housing, while encouraging modest growth of new affordable units. It quantified these goals into concrete targets of preserving 10,000 units of affordable housing and developing 2,000 new units by 2023, which will help the city determine resource needs and provide a metric to measure success.
Detroit Multifamily Affordable Housing Strategy Roadmap
MAKING IT TO THE FINISH LINE: ACTIONS & ACCOUNTABILITY
To accomplish these goals, the City needed to ensure it could point to specific actions and outcomes that will propel growth and preservation, and also identify adequate measurements of successful implementation.
Prioritization & Planning
Based on identified local challenges, overall City goals, and the availability of existing and new resources, we confirmed the affordable housing priorities of the City and established a plan for implementation. This process clarified the City’s goals and led to both the development of policies and initiatives that would drive toward these and reinforced the level of accountability that could be provided through a plan like this one.
Policies that Work for the Local Market
The specific challenges of Detroit’s local market required the City to identify state and local policies that would leverage limited resources for funding new affordable housing and prioritize strategies that preserved affordable housing for existing Detroiters. While strategies such as an Affordable Housing Trust Fund have been successful in many cities, Detroit’s approach, including the creation of an Affordable Housing Leverage Fund (AHLF), creates a targeted tool for accomplishing key affordable housing projects within the city, and allows the City team to drive toward its goals, even in the face of dwindling public funding. Other strategies, such as the prioritization and use of publicly-owned land, leverage Detroit’s unique assets to accomplish key housing goals. HR&A supported the City team in identifying strong precedents and crafting the Detroit-specific approach to these tools.
As with any good strategy, the City set measurable goals and defined actions for implementation within a defined timeframe. The City of Detroit will undertake the actions identified in the strategy through 2023, at which point it can evaluate the efficacy of specific initiatives or programs and reevaluate goals based on evolving market and policy conditions in the City.
OUR COMMITMENT TO INCLUSIVITY AND AFFORDABILITY
HR&A was founded with the mission to continue the reinvention of cities into vibrant urban centers that offer jobs and a high quality of life for diverse communities. Supporting equitable, affordable housing and the development of mixed-income communities is a key priority for ensuring our cities stay diverse and promote a higher quality of life. From our economic development strategies to real estate advisory work, HR&A embeds this mission into every engagement with our clients.
If you are a city leader or advocate interested in how HR&A can build an affordable housing strategy for your city, or would like to hear more about HR&A’s work on the Detroit Multifamily Affordable Housing Study, please reach out to Stan Wall, Philip Kash, or Olivia Moss, we’d love to hear from you.