Panel, Conference Presentation
Building Better Cities and Scaling Housing Solutions
- A demographic shift driven by high coastal housing costs and limited savings is expected to prompt millennials to relocate to inland regions, creating economic development opportunities in the center of the country while prompting California to adopt new affordable housing policies.
- Affordable housing has ascended to the top priority in local elections across the United States, with approximately 59% of cities ranking it as their number one issue and half of those designating it as the absolute top priority.
- The population of Americans aged 75 and older is projected to double within the next 10 years, resulting in a situation where half of this demographic faces simultaneous challenges regarding healthcare and housing costs.
- Impact investing strategies are shifting toward prioritizing financial returns alongside impact, with a specific operational plan to provide financial wellness coaching to individuals unable to purchase homes within the next six to twelve months to build a customer pipeline for one, five, and ten years out.
- Major employers such as Microsoft, Amazon, and Apple are increasingly recognizing housing affordability as a critical survival issue for recruitment and retention, potentially leading to coordinated threats to local governments regarding rental availability unless affordable housing is provided.
- Cities including New York, Los Angeles, Seattle, San Francisco, and Denver are establishing acquisition and preservation funds to partner with companies, a trend expected to generate more public discussion on housing preservation due to its potential for market-rate returns and non-correlated cash flow.
- The supply of new affordable housing remains insignificant relative to demand, with only 50,000 new units built annually against a 20-million-unit deficit.
- Regulatory measures such as increased permitting transparency (modeled after Denver and Dallas), the allowance of in-law suites in single-family zones, inclusionary zoning, and potential mandates linking infrastructure investment to affordable housing zoning are anticipated to reduce costs and drive construction.
- A 10x increase in Low Income Housing Tax Credits is proposed, with a suggested allocation of $60 billion annually to address cost issues and job creation potential.
- Economic indicators show that wages for lower-income workers have begun to rise faster than high-wage workers over the last 18 months, though significant progress is still required to reverse real wage declines for the bottom 60% of earners.
- State governments adopting appeal processes for local housing denials are expected to send a strong message to communities to reconsider opposition to necessary housing projects.
- The continued role of Fannie Mae as a market "level setter" is viewed as critical, with the removal or fragmentation of Fannie Mae and Freddie Mac projected to worsen conditions in affordable housing markets.
- A 75-25 split in inclusionary zoning requirements for new luxury projects is expected to continue driving affordable housing construction in better locations, while local debates continue regarding waivers for impact fees in cities like Charlotte.
- While transparency in permitting may reduce system costs, it is not expected to halve San Francisco unit costs due to misalignment between construction, land costs, and incomes.
- The long-term projection for affordable housing involves a rising political consensus among majority families, whereas stakeholders hope to achieve greater alignment on specific legislation like SB 50 to focus efforts on opposing those who fundamentally disagree with new construction.