Federal Reserve Resources on Affordable Housing
Affordability and Availability of Rental Housing in the Third Federal Reserve District: 2015, Eileen Divringi, Federal Reserve Bank of Philadelphia
Summary: The following Cascade Focus reports summarize the department's research on issues related to community development in low- and moderate-income communities and fair and impartial access to credit in underserved markets.
Building Blocks for Private Investment in New York City's Underserved Communities, Richard Roberts, Federal Reserve Bank of New York
Summary: This paper was presented at the conference "Policies to Promote Affordable Housing," cosponsored by the Federal Reserve Bank of New York and New York University's Furman Center for Real Estate and Urban Policy on February 7, 2002. It was part of session 5, Remarks on the Future of Housing Policy.
Can Young Professionals Afford to Buy a Home in New England? Heather Brome, Federal Reserve Bank of Boston
Summary: This policy brief explores whether young professional households can afford to own a home in New England. These households are defined as those headed by a 25–39 year old with at least a bachelor's degree and not currently enrolled in school. The analysis relies on two measures: housing burden, defined as the percentage of household income spent on housing costs, and income adequacy, defined as the ratio of household income to the income needed to purchase a home.
The Case for the Community Partner in Economic Development, Anna Steiger, Tessa Hebb, and Lisa Hagerman, Federal Reserve Bank of Boston
Summary: Community-based organizations promote economic development by assembling investments in affordable housing, mixed-use real estate, community facilities, and small business in specific geographies. This article develops case studies of two investment vehicles and their community partners. The first investment vehicle examined is the Urban Strategies America Fund, a for-profit urban development real estate fund in Boston, and the second is Coastal Enterprises Inc. of Portland, Maine, a not-for-profit community development corporation with for-profit investment subsidiaries.
Community Development Financial Institutions: Providing Capital for Revitalization, Donna J. Gambrell, Federal Reserve Bank of Atlanta
Summary: This Partners Update defines and describes community development finance institutions (CDFIs) and their critical role in financing community development, particularly in the Southeast. Two recent reports evaluating CDFI performance are discussed
Community Land Trusts: An Alternative Approach to Affordable Home Ownership and Neighborhood Stabilization, Federal Reserve Bank of Richmond
Summary: This issue of Marketwise Community examines community land trusts (CLTs) as a model of shared equity housing and the sustainability of owner-occupied housing in a community land trust. The key features of successful CLTs are delineated as are relevant policy and financing considerations. Case studies are provided from Orange County, North Carolina; Greenville, South Carolina; Atlanta, Georgia; and Washington, DC.
Contract for Deed Emerges as a Tool for Affordable Housing Organizations, Jacob Wascalus, Federal Reserve Bank of Minneapolis
Summary: Nonprofits are using this alternative home-financing option to help prospective buyers who cannot yet qualify for a traditional mortgage.
Crossing Over to an Improved Era of Community Development, Eric Belsky and Jennifer Fauth, Federal Reserve Bank of San Francisco
Summary: The authors highlight the state of the art in community development and affordable housing initiatives, including efforts like the Harlem Children's Zone, Living Cities' Integration Initiative, Purpose Built Communities, and other exemplary community building efforts. The authors also identify common elements that make these efforts successful across a broad range of geographies and populations.
Developing an Inclusionary Zoning Ordinance, Dwayne Marsh, Federal Reserve Bank of Philadelphia
Summary: The author leads a webinar that defines inclusionary zoning and outlines the benefits of using it as an affordable housing tool. He calls out specific objectives that such policies should meet, key components of those that have been successful, and the steps that should be taken when crafting such an ordinance.
Getting to Scale: The Need for a New Model in Housing and Community Development, Sister Lillian Murphy and Janet Falk, Federal Reserve Bank of San Francisco
Summary: Murphy and Falk laud housing development organizations' approach to affordable housing of combining stability and long-term homeownership and the provision of services to meet the needs of community residents. However, they find major issues with the current financing model and warn that if a more sustainable, more scalable funding model is not developed soon, the organizations will fail to overcome the major gap between the demand for affordable rental housing and the available supply that has resulted from the housing bust and most affects those with the lowest incomes.
Housing Market Recovery in the 12th District: Implications for Low- and Moderate-Income Communities, Laura Choi, Federal Reserve Bank of San Francisco
Summary: Following the aftermath of the Great Recession, national indicators are starting to show signs of improvement in the housing market. However, such indicators mask the realities of what's happening on the ground in low- and moderate-income (LMI) communities that were disproportionately affected by the housing crisis. Complicating matters is the unprecedented role of investors in the housing recovery and the changing nature of local housing markets. There are pressing concerns around the potential impact of investor ownership on communities, tightening rental markets, and the ongoing challenges of preserving affordability for LMI households. This Research Brief provides an overview of these issues and examines housing market recovery and investor activity in the Federal Reserve's Twelfth District.
Housing Policy and Poverty in Springfield, Lynn E. Browne with Marques Benton, Prabal Chakrabarti, Sol Carbonell, DeAnna Green, Yolanda Kodrzycki, Ana Patricia Muñoz, Anna Steiger, Richard Walker, and Bo Zhao, Federal Reserve Bank of Boston
Summary: This essay considers whether housing policies have perhaps contributed to the concentration of poverty in downtown Springfield, Massachusettsa question that emerged in conversations with local leaders. The essay reviews federal housing policy, with a focus on Springfield. A dilemma for Springfield today is that housing and community development policies and resources tend to reflect the needs of communities with strong housing markets where preserving affordable housing is critical. In Springfield, with a much weaker housing market, these policies may perpetuate the status quo. A higher priority for Springfield is attracting a more economically diverse population.
Inclusionary Housing Policies: A Promising Tool for Housing Affordability, Emily Thaden and Emily Mitchell, Federal Reserve Bank of Atlanta
Summary: The U.S. housing market has been on the mend since the recession ended, but increasing property values are leaving many families of modest means priced out of homeownership. In this Partners Update article, researchers from the Atlanta Fed examine inclusionary housing policies as one possible solution.
It Takes a Neighborhood: Purpose Built Communities and Neighborhood Transformation, Shirley Franklin and David Edwards, Federal Reserve Bank of San Francisco
Summary: Franklin and Edwards state that concentrated poverty is the problem and a holistic, neighborhood-based solution that is specific to the circumstances is the essential response. Citing Purpose Built's successful work in Atlanta, Franklin and Edwards say the response must be integrated, including mixed-income housing, cradle-to-college education, supportive community facilities, and resident involvement. Accomplishing the integration requires breaking down silos, especially within government at all levels. Although funds are needed, much can be accomplished by redirecting existing funding to what works.
The Lack of Affordable Housing in New England: How Big a Problem? Why Is It Growing? What Are We Doing about It?, Alicia Sasser, Bo Zhao, Darcy Rollins, and Robert Tannenwald, Federal Reserve Bank of Boston
Summary: Although housing costs in greater Boston and elsewhere around the region have leveled off, affordable housing is still high on the public policy agenda in every New England state. A growing chorus of employers and policymakers is warning that the region's high cost of housing is now undermining its ability to attract and retain workers and businesses. This paper presents a thorough, regionwide analysis of the housing-affordability problem in New England. The authors construct three affordability indicators to examine differences in the cost of housing across socioeconomic, demographic, and occupational groups, for every New England state and the region's principal metropolitan areas.
New Arguments for Employer-Assisted Housing, Anna Afshar, Federal Reserve Bank of Boston
Summary: In some parts of the country, innovation and experimentation have helped employer-assisted housing (EAH) programs gain momentum, providing New Englanders additional rationale for implementing these programs. This article describes how EAH works, its potential benefits, how it is being implemented around the country, and how our region can make better use of these programs to promote competitiveness and affordable housing.
The New Era of Affordable Housing, Gabriella Chiarenza, with Heather Hood, Stuart Cohen, Ann Cheng, Toby Halliday, Bill Kelly, Raphael Bostic, Robin Hughes, Tony Salazar, McCormick Baron Salazar, Kevin Boes, Gabriele Hooks, Nancy E. Brown, Catherine Marshall, and Bob McNulty, Federal Reserve Bank of San Francisco
Summary: This issue of Community Investments asks how different stakeholders within the affordable-housing industry are looking ahead and considering adjustments to their practices in order to continue to provide affordable homes in a challenging fiscal environment. The authors take a look inside affordable housing practitioners' thought processes around current affordable-housing challenges and look at the beginnings of innovative models for the new housing paradigm. They also examine new public-private funding partnership models and consider innovations under way within existing housing programs that could streamline the development process and encourage more efficient construction of safe and stable affordable homes. The authors also discuss new cross-sector efforts with health care, transportation, and energy-efficiency practitioners in which affordable housing serves as a crucial base to support resilient neighborhoods. Finally, the authors note how service-enriched housing helps the most vulnerable members of our communities lead fuller lives in a more stable environment.
State Incentive Fund Helps Ease North Dakota's Affordable Housing Shortage, Paula Woessner, Federal Reserve Bank of Minneapolis
Summary: The article examines the North Dakota Housing Incentive Fund, a tax-incentive program to fund housing for essential workers and low- to moderate-income people, which is a hit with contributors and developers alike.
Surveying the Landscape: The Challenge of Affordable Housing in Texas, Alfreda B. Norman, with Wenhua Di, Jackie Hoyer, Roy Lopez, Tanya Ferencak, Emily Ryder, Elizabeth Sobel Blum, and Julie Gunter,Federal Reserve Bank of Dallas
Summary: This issue of the Dallas Fed's Banking & Community Perspectives looks at challenges facing the affordable-housing field in Texas, spotlighting underlying trends and new approaches to increasing availability. "Affordable Housing Coming to Dallas via Transit-Oriented Development" examines the barriers and benefits to using tax-increment financing to fund affordable housing in transit oriented developments (TOD) both in general and in the context of the Dallas Office of Economic Development's TOD Tax Increment Financing District and a specific North Dallas development begun in 2008, the Lancaster Urban Village. "A Bond-able Development" looks at how five public housing authorities have developed innovative programs and how they have financed them. Bondable developments and bank qualified tax exempt obligations are discussed in the context of Travis County, Texas. "Houston Taking Holistic Approach to Affordable-Housing Development" describes Houston's holistic approach to neighborhood revitalization. The city has found that concentrated development is more effective over the long term than a scattered-site approach. The paper outlines current strategies in both single-family and multifamily affordable housing strategies in Houston, as well as funding resources used by the city.
Transit-Oriented Development Is Good Community Development, John Robert Smith and Allison Brooks, Federal Reserve Bank of San Francisco
Summary: Smith and Brooks point to a systematic barrier to poorer residents boosting their quality of life that cannot be addressed by neighborhood- or county-based approaches: the growing spatial mismatch between where people—particularly those in low-skill jobs—live and where they work. They encourage a new, interdisciplinary approach among practitioners of community and economic development, transportation, workforce development, education, and health and business where affordable housing projects are part of a broader strategy to create affordable living. They provide guidance for aligning processes that operate on different timelines and scales, such as transportation planning (long-term and regional scale) and housing development (short-term and project scale).
Unaffordable Housing and Local Employment Growth, Ritashree Chakrabarti and Junfu Zhang, Federal Reserve Bank of Boston
Summary: High housing prices have caused concerns among policy makers as well as the public in many U.S. regions. There is a general belief that unaffordable housing could drive businesses away and thus impede job growth. However, there has been little empirical evidence that supports this view. In this paper, the authors clarify how housing affordability is linked to employment growth and why unaffordable housing could negatively affect employment growth. They also empirically measure this effect using data on California municipalities and U.S. metropolitan areas and counties. It is argued that, for various reasons, a simple correlation between unaffordable housing and employment growth should not be interpreted as causal. The authors therefore develop some empirical strategies and employ statistical techniques to estimate the causal effect of unaffordable housing on employment growth. Their results provide consistent evidence that indeed unaffordable housing slows growth in local employment. Finally, the authors discuss the policy implications of these findings.