The Answer to Affordable Housing? End Poverty

September 6, 2018; Milwaukee Neighborhood News Service

Earlier this year, City Lab spotlighted the difficult housing market for those on the lower rungs of the nation’s economic ladder: “Finding affordable housing isn’t getting any easier for the more than a quarter of US renters that are extremely low-income…for every 100 households categorized as extremely low income (ELI), only 35 affordable rental homes are available—a shortage of over 7 million affordable and available homes.”

If this a problem of supply, the lack of enough houses to meet demand, then the current attention focused on expanding federal, state, and local programs meant to increase the number of affordable units is on target. But if the inability of renters to pay what the market is asking of them is even part of the problem, then policymakers and advocates will need to widen their focus.

Researchers in Wisconsin have some data that may help sort through this dilemma. The Wisconsin Policy Forum (WPF) recently conducted a study on affordable housing in the Milwaukee area, “The Cost of Living,” with this question as a central focus. According to the Milwaukee Neighborhood News Service, the WPF researchers found “over half of Milwaukee County’s renting population is considered rent burdened. This means they spend at least 30 percent of their income on housing.”

Officials and community members have sought solutions to increase affordable housing. However, “The Cost of Living”…showed that low income is the larger problem, compared to an overall lack of affordable housing.

This conclusion mirrors one reached by Mathew Desmond, author of Evicted, who also based his work on the experiences of low-income renters in Milwaukee. Speaking to Fresh Air’s Terry Gross earlier this year, he, too, focused on the problem of an economy where lower incomes have stagnated: “Incomes have remained flat for many Americans over the last two decades, but housing costs have soared. So, between 1995 and today, median asking rents have increased by 70 percent, adjusting for inflation. There’s a shrinking gap between what families are bringing [in] and what they have to pay for basic shelter.”

The recent Milwaukee snapshot provides more detail on what this situation looks like in one urban area: “Since the Great Recession of 2008, home ownership has declined in favor of renting. According to the report…even Milwaukee County residents who earn the median income can’t afford the median rent, unless they spend more than 30 percent of their incomes on housing.” Even though median incomes have returned to pre-Great Recession levels, housing costs have shot upward, leaving Milwaukee renters less able to afford average rents. The study also found that those with the lowest incomes had the fewest affordable housing options.

Milwaukee-area policymakers and housing-industry leaders have attacked the problem from the supply side. Even while the federal government is looking to decrease funding for housing supports, local leaders have used several strategies to grow the number of affordable units. The WPF has concluded that while these efforts need to continue and expand, they won’t succeed unless the demand side is addressed as well, meaning low-income renters will need to see their incomes rise.

Addressing the demand side of the equation may be necessary to meet the needs of Milwaukee County residents, but also may be more difficult for local policymakers to achieve than efforts to increase the affordable housing supply. For example, expanding access to housing vouchers would require a major shift in social safety net programs at the federal level, while raising incomes would require substantial long-term gains in economic development that may be influenced more by regional, state, and global economic factors than local policies. On the other hand, increasing the supply of affordable housing units, while still challenging and costly, can be tackled through multiple strategies involving both the private sector and governments at all levels.

Poverty and the accompanying inability to provide stable, decent housing links to many other social ills. Refusing to focus on responses that ignore poverty as a root cause continues to plague efforts to improve education and medical care and to provide affordable housing. As Milwaukee Alderperson Michael Murphy told the MNNS, “All the issues that revolve around poverty are interrelated. Providing housing, education and transportation to jobs would be part of the solution. It’s just not one single thing. If it were, then somebody would’ve done it already.”

Or, as Desmond notes, “We can spend smart or we can spend stupid, and so I think addressing the affordable housing crisis is a win for families, for landlords and for the taxpayer.”—Martin Levine