Making America Affordable: If Other Nations Do It, Why Can’t We?

In discussions of urban development in the 21st century, a controversial issue has been how cities can best provide affordable housing for struggling communities. The topic has been especially prevalent in the United States, where American cities have experimented with an array of ideas that attempt to address the nation’s affordability crisis. On the one hand, some politicians believe that current strategies are not only working, but are enough to solve America’s affordability crisis. Others even go so far as to argue that current affordable housing trends actually increase the likelihood of gentrification and displacement, making for an even less affordable America. Still others contend that the U.S. should take lessons from foreign countries and that our entire ideology surrounding affordable housing needs to change.

Given the large scale and high stakes of this issue, Americans from a variety of backgrounds, including politicians, urban activists, and residents, have shared their views. Although key terms such as inclusionary zoning, building codes, subsidies, and mixed-use developments are all important to solving the issue, I argue that they are not individually capable of increasing affordability. Instead, we must learn from foreign housing programs in order to achieve our full potential for fundamentally changing how we think about affordable housing in America and ending America’s social housing stigma. 

The word “affordability” is often used in a fluid sense to describe housing that is accessible to poorer communities. Those unfamiliar with this topic may be interested to know that the term actually has a more specific definition in the U.S. The U.S. Department of Housing and Urban Development (HUD) – the Cabinet department that oversees housing policies. The Department of Housing and Urban Development states that “Families who pay more that 30 percent of their income are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation, and medical care” (HUD). Having said that, a 2006 American Community Survey conducted by the U.S. Census Bureau found that over 40% of American households are paying well over the 30 percent income threshold outlined by the HUD on their rent/mortgage (Schwartz). In 1960, only 25% percent of Americans were spending more than 30 percent of their income on housing, 15 percentage points lower than today’s figures (Covert). America’s affordability crisis is getting worse at a terrifyingly fast rate, yet Americans are stuck waiting for politicians to take action.

One of the leaders in addressing America’s affordability is the nation’s most populous city, New York. For many decades the city’s mayors have laid out extensive housing plans that all sought to make New York a more affordable city. Two of them, Mayors Michael Bloomberg and Bill de Blasio, are known for putting out particularly ambitious plans. Bloomberg laid out the largest affordable housing program in the nation, the New Housing Marketplace Plan (NHMP), which preserved or constructed 165,000 affordable housing units over the course of his 12-year tenure as mayor. Similarly, New York’s current mayor, Bill de Blasio, came into office in 2013 with a housing plan at the center of his agenda. Although his proposal, Housing New York, aims to address some of the holes left by Bloomberg, such as “Large scale disinvestment, foreclosure, and neighborhood destabilization” (de Blasio); beyond that, the two have largely similar ideologies. Specifically, both mayors relied heavily on voluntary inclusionary zoning–a tool that incentivizes developers to include affordable units in their projects in exchange for a bonus, such as allowing more units or expediting the permit approval process, as their primary means of increasing affordability.

At first glance, it seems like inclusionary zoning can only have a positive effect. More affordable units means more affordability, right?. But the tactic is much more complex than politicians make it out to be. Two misconceptions are that inclusionary zoning is mandatory and that affordable units are permanent. In his New York Times article “Affordable Housing That’s Very Costly,” journalist Josh Barro argues that including affordable units for subsidies is not always appealing for a developer: “Developers [can] agree to set aside 20 percent of the units, and, in exchange, they are permitted to build 33 percent more square feet than is otherwise permitted. But many developers, especially those building small and midsize projects, choose not to participate, partly because the implicit subsidy for the affordable units is so high” (Barro). Essentially, Barro is arguing that because market-rate rents are so high, giving up 20% of them to be affordable is not always feasible for a developer. This notion is further supported by Dustin Read, a Virginia Tech Professor of Asset Management and Land Use Policy, who found in his 2013 study that “[i]nclusionary housing policies can impose indirect costs on real estate developers in some environments by making market-rate units more difficult to sell or lease” (Read). The points laid out by Barro and Read are important, because, although they do not say so directly, they both reveal that America prefers to put affordability in the hands of developers rather than in the hands of the government.

Nevertheless, Mayor de Blasio prides himself on his housing plan, claiming in a recent statement that “[w]e have created more affordable housing than any other time in our city’s history” and “it is paying off” (Gannon). De Blasio’s claim, however, rests upon the questionable assumption that affordable units created under his administration will be available in the long term. Moses Gates, Director of Planning and Community Development for the Association for Neighborhood and Housing Development, has taken note of the mayor turning a blind eye towards this problem. Gates himself states, “[the de Blasio administration] will tell you that they’re interested in permanent affordability and good stewardship, but at the end of the day, policies speak louder than words” (Goldesohn). In other words, Gates believes that there are inherent flaws in de Blasio’s current plan, and that the mayor is trying to paint a better picture than reality permits.

Outside of the United States, other nations have taken their own approaches to addressing their affordable housing needs. Canada, for example, relies on a different style of affordable housing called “social housing.” Instead of constructing large government-controlled housing projects, social housing aims to build a higher quantity of small-scale buildings developed by the so called “third sector.” The third sector is neither governmental or private, but rather community-based organizations (Hulchanski). Just as important, Canada has seen successful social housing programs due to a pair of national policies that the nation used to set clear goals:

Canada amended its National Housing Act in 1973 to launch the national nonprofit housing supply program. In addition to financial subsidy, the program provided assistance to help community groups, church organizations, labor unions, and municipal governments become sophisticated housing developers. (Hulchanski)

More recently in 2016, the Canadian government once again demonstrated its commitment to building affordable housing:

After a federal study, which sourced more than 7,000 citizens, was released last November, the country’s new Liberal government pledged $11.2 billion Canadian (U.S. $8.9 billion) to create more affordable housing during budget discussions this spring. . . . While the lasting impact of the study and spending have yet to be understood, many view a prioritization of spending on housing . . . as a wise investment. (Sisson)

The essence of Canada’s approach is that organized goals and federal funding will create the proper conditions to foster affordability.

This is not to say that Canada’s affordable housing initiative is perfect. A 2011 National Household survey found that 12.5% of Canadians (totaling to about 4.5 million people) were still not living in acceptable housing (Government of Canada). The nation’s organized strategy is still a stark contrast from recent trends in America, where President Trump proposed cuts of $8.8 billion to the Department of Housing and Urban Development in Fiscal Year 2019 (Office of Management and Budget). In comparing the two nations’ ideologies, Ethan Handelman, Vice President of Policy and Advocacy for the National Housing Conference, proclaimed that “There’s a real [plan] there [in Canada], and they have budgeted money to make it happen. You’d have to go back to the Great Society to find a real national affordable housing strategy in the United States” (Sisson). Handelman’s point is that ever since the Housing and Urban Development Act of 1965, which sought to help low income families secure acceptable living conditions through subsidies. The United States has failed to truly put forward a tangible plan. In Handelman’s view, a federal policy that is frequently adjusted to changing times will focus the nation’s long-term goals and put itself on track towards creating permanent, nationwide affordability.

Another country that has stood out for its success in creating affordable housing is Austria. Its capital, Vienna, is home to one of the most ambitious social housing programs in the world. Since the 1920s Austria has made significant investments in social housing, and as a result, about 60 percent of the 1.8 million Vienna residents live in some form of government-subsidized developments. For the record, in Philadelphia (an American city of comparable size to Vienna), only 9 percent of its 1.6 millions residents live in affordable housing (Dreier). Peter Dreier, chair of the Urban and Environmental Policy Department at Occidental College, argues that Vienna’s success as an affordable city is because the nation gears affordability toward a much larger demographic of the population. As Dreier states, “Unlike public housing in the United States, Vienna’s social housing serves the middle class as well as the poor, and has thus avoided the stigma of being either vertical ghettos or housing of last resort” (Dreier). In making this comment, Dreier urges us to consider that when “affordability” applies to only the poorest residents, the resulting stigma can be enough to turn off poor residents from applying for social housing programs altogether.

Since American public housing is often viewed as hitting rock bottom, it should come as no surprise that the stigma surrounding affordable housing in the United States is one of the nation’s biggest obstacles. In a 2016 University of Georgia study, Professor of Housing and Consumer Economics, Kimberly Skobba, made a troubling discovery that “[a] lot of the stigmas associated with places like [public housing communities] are not true, but at the same time some of the stigmas are true with the activity that goes on there and the type of people Government housing produces” (Skobba). Specifically, Skobba’s research cites higher crime rates and lower standards of living in America housing projects as the main contributor to the stigma (Skobba). This is in stark contrast with Vienna, where those that live in affordable housing tend to share positive remarks. Austrian journalist Uwe Mauch lives in a government subsidized apartment in Vienna and states, “It’s great ― I’m really happy living here . . . I like all the green space right outside my window. When people from other countries visit, they can’t believe it’s so nice and also so cheap” (Forrest). Mauch’s anecdote is extremely useful because it sheds light on the difficult problem of affordable housing stereotypes, revealing that, with the right tools, it is indeed possible to build affordable housing that is both nice and cheap, as he puts it.

Though I concede that some American cities like New York are making large efforts to becoming more affordable, America and its politicians need to adjust their mindset towards the issue and begin to focus on permanent solutions and combating stigmas. That is, while I acknowledge that certain aspects of America’s current housing policies may work in the short term, we need to rethink affordable housing on a federal level if the government expects its cities to continue being affordable in the distant future.

First, America needs to follow in the steps of Canada and Austria by adopting a modern housing policy that outlines specific housing goals across the entire country. While individual American cities have developed their own plans, having a variety of affordable housing initiatives scattered across America is simply unorganized and thus more likely to produce mixed results. To be clear, I am not suggesting that it is not important for cities to create their own plans–cities are undoubtedly crucial players in creating a more affordable America–but as Sisson states, “Affordable housing is an extremely local issue . . . [however,] well-conceived national policy (and funding) can make a massive difference” (Sisson). If Sisson is right that national policy affects local change, as I think he is, then we need to reassess the popular assumption that creating affordable housing is the responsibility of individual cities and not the nation as a whole. Some readers may challenge my view by insisting that it is foolish for the United States to take lessons from smaller countries, but there is simply no evidence to suggest that national housing policies become less effective with larger populations. America’s current policy is not failing because our population is too large, but because our policy is outdated and unfocused.

Putting economics aside, in order for affordable housing to be truly effective, America also needs to combat stereotypes and stigmas that are attributed to living in below market-rate housing. As it is, there is no point of even concerning ourselves with providing affordable housing if people feel too ashamed to live there in the first place. One way of addressing current stereotypes is by making affordable housing available to a wider variety of Americans so that poor Americans feel more included in the program. Again, we have plenty to learn from abroad. It is no coincidence that Austrian citizens are proud to live in public housing while Americans feel ostracized  (Forrest, Skobba). By opening affordable housing to a broader range of households (for instance, low and middle income Americans), people living in affordable housing are bound to feel less like outcasts than they currently do. In America we have defined public housing as being for the poorest of the poor, so by broadening the affordable spectrum, we can make affordable housing more popular and, in the words of Forrest, “something for everybody” (Forrest).

Lastly, America needs to become a leader not in affordable housing, but in permanent, affordable housing. This distinction is important because although permanent affordable housing solves the issue, temporary housing does not. That is, while I understand the impulse to build affordable housing as quickly as possible by any means, building temporary affordable housing simply prolongs the issue. I agree with Gates when he argues that “a requirement of permanent affordability for housing financed by the NYC Department of Housing Preservation and Development (HPD) . . . should be a goal of any new housing policy” (Gates), because, as recent studies by the Association for Neighborhood and Housing Development have shown, “234,000 affordable housing units are at risk of expiring in NYC between 2017 and 2037” (Goldensohn). Clearly, this is not making America more affordable; it is simply pushing the problem onto the next generation.

In conclusion, America’s policies and attitudes towards affordable housing are in need of a complete overhaul. Our cities are doing much of the heavy lifting when it comes to creating tangible housing plans; however, without the guidance of a federally mandated plan, there is little to expect in terms of nationwide progress. Because the majority of so-called affordable units in cities like New York are only temporary, success on a city-scale is hard to envision. Though it is easy to get caught up in the politics around housing issues, we have to remember that millions of people’s livelihoods are on the line. Although it is unclear whether we can expect to live in a more affordable America in the near future, what is clear is that there are plenty of countries for us to learn from. The time to start looking for solutions beyond our borders and to implement the teachings that are available to us is now.

Works Cited

“Affordable Housing.” U.S. Department of Housing and Urban Development (HUD), www.hud.gov/program_offices/comm_planning/affordablehousing/. Accessed 6 Dec. 2018.

Barro, Josh. “Affordable Housing That’s Very Costly.” The New York Times, 7 Jun. 2014, www.nytimes.com/2014/06/08/upshot/affordable-housing-thats-very-costly.html. Accessed 10 Dec. 2018.

“Budget of the U.S. Government.” Office of Management and Budget, [Federal Government], 2018, www.whitehouse.gov/wp-content/uploads/2018/02/budget-fy2019.pdf. Accessed 11 Dec. 2018. 

Covert, Bryce. “The Deep, Uniquely American Roots of Our Affordable-Housing Crisis.” The Nation, 24 May 2018, www.thenation.com/article/give-us-shelter/. Accessed 9 Dec. 2018.

Dreier, Peter. “Why America Needs More Social Housing.” The American Prospect, 16 Apr. 2018, prospect.org/article/why-america-needs-more-social-housing. Accessed 11 Dec. 2018.

Forrest, Adam. “Vienna’s Affordable Housing Paradise.” Huffington Post, 19 Jul. 2018, www.huffingtonpost.com/entry/vienna-affordable-housing-paradise_us_5b4e0b12e4b0b15aba88c7b0. Accessed 12 Dec. 2018.

Gates, Moses. “Permanent Affordability: Practical Solutions.” Association for Neighborhood and Housing Development, Oct. 2015, anhd.org/wp-content/uploads/2015/10/2015-Permanent-Affordability-Practical-Solutions.pdf. Accessed 11 Dec. 2018.

Gannon, Devin. “NYC added 32,000 affordable homes this year, setting a new constructionrecord.” 6sqft, 20 Jul. 2018,www.6sqft.com/new-york-city-added-32000-affordable-homes-in-fy-2018/. Accessed 9 Dec. 2018.

Goldesohn, Rosa. “Only 3,000 of De Blasio’s 20,000 Affordable Housing Units Are Permanent.” DnaInfo, 15 Oct. 2015, www.dnainfo.com/new-york/20151015/civic-center/only-3000-of-de-blasios-20000-affordable-housing-units-are-permanent/. Accessed 10 Dec. 2018.

“Housing New York: A Five-Borough Ten-Year Plan.” Office of the Mayor, 2013,www1.nyc.gov/assets/hpd/downloads/pdf/housing_plan.pdf. Accessed 5 Dec. 2018.

Hulchanski, David. “Affordable Housing: Lessons from Canada.” The American Prospect, Spring 1990, prospect.org/article/affordable-housing-lessons-canada. Accessed 10 Dec. 2018. 

Read, Dustin. “Inclusionary Housing Policies, Stigma Effects and Strategic Production Decisions.” Journal of Real Estate Finance & Economics 48.4 (2014): 589-610. Accessed 11 Dec. 2018.

Schwartz, Mary. “Who Can Afford To Live in a Home?: A look at data from the 2006 American Community Survey.” U.S. Census Bureau, www.census.gov/housing/census/publications/who-can-afford.pdf. Accessed 9 Dec. 2018.

Sisson, Patrick. “Solving affordable housing: Creative solutions around the U.S.” Curbed, 25 Jul. 2017, www.curbed.com/2017/7/25/16020648/affordable-housing-apartment-urban-development. Accessed 10 Dec. 2018.

Skobba, Kim. “Examining Public Housing Stereotypes and Building Intercultural Competence Through Service-Learning.”
Family & Consumer Sciences Research Journal 44.4 (2016): 345-359. Accessed 12 Dec. 2018.

“Towards a Poverty Reduction Strategy – A backgrounder on poverty in Canada.” Government of Canada, www.canada.ca/en/employment-social-development/programs/poverty-reduction/backgrounder.html#h2.7-h3.1. Accessed 11 Dec. 2018.