In December 2013, the National League of Cities issued a report identifying ten critical imperatives facing U.S. cities. One of these critical imperatives is the need for affordable housing and another is the related issue of the shrinking middle class. In a December 2013 speech, President Obama called income inequality the major issue of our time. With high poverty rates, tightened lending standards, and rising interest rates facing Americans across the nation, it is time for local governments to develop more mechanisms to encourage and support the provision of affordable housing.
I have selected some MRSC webpages and other useful resources that address affordable housing. As a starting point, see MRSC’s webpages on Affordable Housing Ordinances/Flexible Provisions and Funding Resources for Housing.
One type of program to provide more affordable housing in communities is inclusionary zoning. Inclusionary zoning policies require or encourage developers to set aside a certain percentage of the units in housing developments for low- and moderate-income residents. Most inclusionary housing programs offer incentives, such as density bonuses or expedited permits, to offset developers’ project costs. Inclusionary zoning programs also integrate lower-priced units into mixed-income housing projects and help to disperse affordable units throughout the community.
Many California cities have implemented inclusionary housing into their code provisions. As of 2006, one-third of all local governments in California reported using inclusionary housing.  Some Washington jurisdictions also have adopted inclusionary zoning provisions. For examples of inclusionary housing provisions from communities in Washington and other states, see MRSC’s webpage on Inclusionary Housing Programs.
Here are a few selected resources on inclusionary housing:
- After the Downturn: New Challenges and Opportunities for Affordable Housing, by Robert Hickey, Inclusionary Housing: A Series of Research & Policy Briefs, Center for Housing Policy, February 2013 – Discusses major issues and opportunities facing inclusionary housing today
- Delivering on the Promise of Inclusionary Housing: Best Practices in Administration and Monitoring, Rick Jacobus, PolicyLink, 10/01/2007 – Best practices guide that emphasizes well-administered programs and monitoring
- The Ins and the Outs, A Policy Guide to Inclusionary and Bonus Housing Programs in Washington, The Housing Partnership, August 2007 – Overview of the legal, economic, and practical issues that arise when structuring inclusionary or incentive housing programs.
Creative/Innovative Approaches to Providing Affordable Housing
A number of different approaches to the provision of affordable housing are being considered by local governments. These approaches include cottage housing (or backyard cottages), micro-housing, and accessory dwelling units. Micro-housing (also called apodments) typically features small sleeping rooms (usually under 300 square feet) with private bathrooms and units grouped together in arrangements of up to 8, with a shared kitchen or common area. These units are generally less expensive than standard studio or one-bedroom apartments. This type of housing is targeted at young single professionals in their 20s and 30s.
The following are several articles that discuss the micro-unit trend:
- Unlocking Home: Three Keys to Affordable Communities, Sightline Institute, 07/15/2013 – Tiny backyard cottages, micro-apartments, the revival of boarding houses and in-law dwellings – Cascadia is on the leading edge of these emerging trends, which reintroduce housing forms of a century ago.
- ‘Micro Unit’ Developers See Big Future, by Lew Sichelman, Urban Land, May 20, 2013
When it comes to ‘micro’ apartments, a Bellevue-based developer may be building them smaller than most anyone else.
- Next Evolution in Micro-Housing: Smarter, Shared, and Modular, by Brett Widness, Urban Land, November 18, 2013.
- Seattle Department of Planning and Development, Micro-Housing – Seattle has seen an increase in the development of micro-housing, particularly in 2012 and 2013.
- Cities Try to Lure Young Professionals With Cheap ‘Micro’ Units, by Kris Hudson, The Wall Street Journal, December 20, 2013 – The relatively low cost of micro apartments in high rent cities such as N.Y. and San Francisco makes them a feasible alternative for singles, but will they attract millennials in smaller, lower-rent cities?
Sustainable Low-Income Housing
With the recent emphasis on green construction and sustainable communities, developers and local governments are grappling with the challenge of providing affordable housing that incorporates green design principles.
Here are a few resources on this topic:
- Green Goes Mainstream in Low-Income Housing, by Lauren Fuhry and Walker Wells, Planning, November 2013 – Focuses on the increasing adoption of green measures by low-income housing in the U.S. in 2013. It discusses how the financing tool, Low Income Housing Tax Credit (LIHTC) program has been a catalyst for the greening of affordable housing in the country. The concerns regarding the LIHTC are highlighted, including the high costs per dwelling unit created through the program.
- Top 6 Sustainable Low-Income Housing Projects, by Andrew Goodwin, Inhabitat, August 30, 2012.
- Evergreen Sustainable Development Standard – A green building performance standard required of all affordable housing projects receiving capital funds from the Washington State Housing Trust Fund.
- Sustainable Development & Greening of Affordable Housing, Cambridge, MA.
Tax incentives have been successfully used in Washington to stimulate affordable housing using the low income housing tax credit and multifamily housing tax exemption. For more information, see Low Income Housing Tax Credit (Washington State Housing Finance Commission) and MRSC’s webpage on Tax Exemption.
Additional Housing Resources
A number of other strategies to encourage affordable housing are discussed on MRSC’s webpage on Affordable Housing Ordinances/Flexible Provisions.
The following are additional reports on housing that may be of interest:
- America’s Rental Housing: Evolving Markets and Needs, Joint Center for Housing Studies of Harvard University, December 2013 – According to Shaun Donovan, the Secretary of Housing and Urban Development, we are in the midst of the worst rental affordability crisis that this country has known.  Based on initial estimates from the American Community Survey, the number of renters paying more than 30 percent of income for housing (the traditional measure of affordability) reached another high in 2012.
- New Game, New Rules? Guessing at the future of American housing, by Ben Brown, PlaceMakers, March 4, 2013 – Massive demographic shifts, changing market demand, rising energy costs, and new economic realities for families and governments at all levels will impose a different context for development and redevelopment than the one that has driven housing trends over the last half-century.
- Housing America’s Graying Population, by Joan Mooney, Urban Land, June 3, 2013 – Eighty to 90 percent of Americans want to “age in place,” either in their current home or in their neighborhood. But most homes and communities are not set up to house the elderly.
- State of the Nation’s Housing, 2013, Joint Center for Housing Studies of Harvard University, June 2013.
- Affordable Housing in the Era of Scarcity: Strategies for Doing More with Less, Common Ground, Fall 2012.
A number of different approaches to the provision of affordable housing will be required to address this perennial problem. Other economic mechanisms, such as increasing the minimum wage, are being proposed in some communities to deal with rising income inequality. Local governments need to step up to consider incentives and regulations that can provide more low- and middle-income housing. MRSC is interested in knowing what affordable housing strategies have worked in your community.
 From Affordable in the Right Places: Trends in California’s Inclusionary Housing, published jointly by the Nonprofit Housing Association of Northern California, California Coalition for Rural Housing, San Diego Housing Federation, and Sacramento Housing Alliance, August 2007.
 From With Rental Demand Soaring, Poor Are Feeling Squeezed, by Annie Lowery, New York Times, December 9, 2013.
 From America’s Rental Housing: Evolving Markets and Needs, Joint Center for Housing Studies of Harvard University, December 2013, p.6 and p.28.