Weekly update from the National Housing Conference
July 7, 2019
President's Message I By David M. Dworkin
Dear Friend,

The housing price boom in California may finally be leveling off! The median home price in Los Altos Hills fell 9 percent in the past year. Stanford led the state, with a fall of nearly 15 percent. But don’t plan on moving quite yet. The median home price in Los Altos Hills is still $4.5 million, and in Stanford, it is over $2.9 million. 

In nearby Washington state, prices are also starting to come down, although not as steeply and not from such stratospheric levels. But despite the fact that Vashon Island can only be reached by ferry from Seattle, the median price there is still over $600,000 despite a drop of 4.5 percent. Other states like Colorado, Idaho, Oregon and Tennessee are in similar situations, to name just a few, according to recent reporting by Forbes Magazine using Redfin data. The reason is the same in all of these and other cities – housing affordability is so bad, only the extremely wealthy can afford to live there. Even families making well over six figure incomes can’t possibly come up with the down payment to afford to buy a home. 

This impacts rental markets as well. The fewer homebuyers, the more renters, and the more renters, the higher the rents. The law of supply and demand would rectify this situation, but it can’t because there are too many structural and systemic barriers to housing production. We’ll get back to that point in a moment.

First let’s look at some actual cases from NHC’s Paycheck to Paycheck database. In the San Jose metro area, which includes Stanford and Los Altos Hills, a new homebuyer must have an income of more than $300,000 per year to buy a typical home – and that averages in much less costly cities in the same vicinity. In fact, a computer programmer married to an accountant still falls short of being able to afford their own home by $150,000. Partly as a result, renters don’t fair much better. None of the 81 occupations we researched could afford the typical two bedroom apartment and most could not afford a three bedroom even with two incomes. Only the computer programmer could afford a one bedroom apartment. 

The reason for this growing housing crisis is a lack of supply. We simply are not building enough homes. In the most recent State of the Nation’s Housing report by the Joint Center for Housing Studies at Harvard University, we only completed 1.2 million new housing units last year, which despite being on par for the decade since the financial crisis, is significantly lower than our annual production at any point between 1982 and 2008. During a time when the need for new housing units is reaching unprecedented levels, our housing production is barely keeping up with new household formations. When looking at single family residential homebuilding, the numbers are much worse, as this chart from the National Association of Home Builders shows.
This is why NHC is working with our members to draft a national housing act for the 21st century. We hope you will join us in this effort by becoming a member of NHC. We aren’t waiting however. We are also supporting immediate passage of legislation like The Neighborhood Homes Investment Act (NHIA), the Affordable Housing Credit Improvement Act (AHCIA) of 2019 and the Save Affordable Housing Act of 2019. Together, they would make a significant impact on two major factors exacerbating America’s housing affordability crisis: the appraisal gap for affordable homes in depressed single family housing markets, and the lack of affordable rental housing across the country. We are also working with the Trump administration and bipartisan leaders in Congress on responsible bipartisan regulatory reform, zoning improvements and housing finance reform. 

We believe that we can address this growing crisis, but only if we work together. We are counting on you to help us make that happen.
David M. Dworkin
NHC President and CEO
News from Washington I By Tristan Bréaux and
Quinn Mulholland
Freddie Mac releases study on affordable housing

According to a study released by Freddie Mac, the cities that saw the fastest growth since 2010 also saw large declines in affordable housing. The study found that the 10 fastest-growing metro areas during that time period lost affordable units at a rate double that of slower-growing metro areas. “Cities that have experienced aggressive population growth have struggled to build enough rental housing to meet the increased demand,” Freddie Mac Vice President of Multifamily Research and Modeling Steve Guggenmos said in a statement. “The problem continues to get worse, and every year more very low-income families are forced to spend more of their income on housing.”
Lawmakers take flurry of action on housing-related bills

Senator Tim Kaine (D-Va.) reintroduced the Fair Housing Improvement Act of 2019, which would protect veterans and low-income families using vouchers from discrimination. Additionally, a group of Democratic Senators led by Brian Schatz (D-Hawaii) introduced a bill to block HUD’s recently proposed rule to weaken enforcement of its Equal Access Rule, the Senate companion to a bill introduced in the House by Representative Jennifer Wexton (D-Va.). Also, the House Financial Services Committee passed a bill by Representative Chuy Garacia (D-Ill.) to protect public housing residents from carbon monoxide poisoning, and President Trump signed a bill eliminating a cap on loans backed by the Department of Veterans Affairs into law.
HUD announces $330 million in funding for lead hazards in subsidized housing

HUD announced it will spend $330 million to clean up lead-based paint and other hazards in federally subsidized housing. The grants will be provided through HUD’s Lead Hazard Reduction and Healthy Homes Production for Tribal Housing grant programs. “Housing conditions directly affect the health of its residents,” HUD Secretary Ben Carson said in a statement. “Grants like these will help communities around the nation protect themselves from the danger of lead exposure and other health and safety hazards.”
NHC in the News
Freddie Mac announces results of inaugural survey of renters and homeowners

Freddie Mac released a “first-of-its-kind” survey of renters and homeowners focusing on affordability challenges. Findings include an all-time high of 82 percent of renters view renting as more affordable than homeownership, over half of all Americans had to make spending or housing changes to afford housing, and only 24 percent of renters said it was extremely likely that they would ever own a home. “The notion that there’s a housing affordability crisis is not new,” incoming Freddie Mac CEO David Brickman told the Wall Street Journal. “But this is really bringing it closer to home in terms of what people are doing about it.”
California lawmakers announce $275 million in grants to address homelessness

California Governor Gavin Newsom and state lawmakers finalized an agreement to provide $275 million in grants to Los Angeles and several other California cities to help with the growing homeless population in the state. The deal came after shocking new statistics show that homelessness has risen by double-digit percentages in several parts of the state, from Sacramento to San Francisco to Los Angeles. In an op-ed for USA Today, National Alliance to End Homelessness President and CEO and NHC Board Member Nan Roman proposed several solutions for California’s homelessness crisis, including using flexible funding to help lower-need people and making “housing the centerpiece of the homelessness services system.”
Oregon state legislature passes ban on single-family zoning

The Oregon Senate approved a bill that would allow for the construction of higher-density housing in all cities with populations of 10,000 or more. The bill, which now awaits Oregon Governor Kate Brown’s signature, comes on the heels of several other high-profile upzoning efforts, including Minneapolis’s recent decision to ban single-family zoning. If signed into law, the Oregon bill will be the first statewide ban on single-family zoning in the nation. "When you only allow for certain types of housing, it becomes a problem,” Oregon State Representative Tina Kotek told the Washington Post. “This is about lifting the ban on what types of houses can be built in residential areas.”
RealPage report shows demand for apartments surging

Real estate technology and analytics firm RealPage released a report showing that demand for U.S. apartments spiked in the second quarter of 2019. According to the report, net move-ins climbed to 155,515 between April and June, representing a five-year high. Quarterly apartment demand was the highest in Dallas-Fort Worth, followed by Chicago and Houston. Rental costs also rose according to the report, with Las Vegas, Phoenix and Atlanta leading the way in rental increases for large metro areas.
Harvard Joint Center releases 2019 housing report

The Harvard Joint Center for Housing Studies released its State of the Nation’s Housing 2019 report at an event at the Federal Reserve Bank of Atlanta. According to the report, the homeownership rate rose to 64.4 percent, still below the rate of around 68 percent prior to the run-up to the housing crisis in 2002, when lending standards were still responsible, and credit and inventory were healthy. Housing construction continues to be lackluster. As a result, single family home prices have risen 41 percent since 2011, driven by an historic lack of supply. Meanwhile, for low- and moderate-income renters, the report found, the situation is equally dire, with the supply of low-cost rental units decreasing 17 percent since 2011, resulting in a 3.6 percent increase in rental costs in 2018 alone. The report notes that most new multifamily housing development continues to be geared toward high-income renters.
What we're reading
The Urban Institute ’s Housing Finance Policy Center published its monthly chartbook, "At A Glance," which covers the latest mortgage and housing market data. The latest edition shows that in the first quarter of 2019, total mortgage debt stayed steady while the share of mortgages held in portfolio increased. Read the full report here .

In an in-depth article, CNN examined New York City’s first LGBT-friendly housing developments and the difficulties those applying to get a unit face. The developments, one in Brooklyn and one in the Bronx, will open later this year and in 2020, respectively. Read the full article here .

Enterprise Community Partners and NeighborWorks America released a new study on a pilot program called the Health Outcomes Demonstration Project. The report examines how the program helped affordable housing and community development organizations evaluate health outcomes to address the root causes of health disparities. Read the report here .
The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.
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