By Aryn Phillips
During a design conversation centered on uplifting communities within the PLA group this summer, Alex Padgett and I chose to discuss the existing homeless crisis, calling to action the need for focus on affordable housing projects. During our conversation, many designers brought up nuances and complications with affordable housing policies and design, and it became apparent that while many of us within the field of planning and design may understand the need for affordable housing, our clients and communities may not. Stigma surrounding affordable housing often leads to opposition within communities, leading to questioning surrounding “the type of people” who will be living in affordable units. Furthermore, so many people in our conversation were shocked to hear how heavily impacted particular communities were by homelessness that I felt compelled to help provide some resources so that we can all be on the same page in identifying the problem at hand. During my research, I was curious to help formulate a current snapshot of where housing affordability stands right now by seeing how much the pandemic may have worsened housing disparities or exacerbated numbers of homeless individuals, particularly in Portland. I believe that in order to properly address the housing crisis, we need to extensively educate ourselves on best practices for navigating policies, advocating for change and designing for our clients. I hope the information provided here will give you a similar interest in learning more about how we can solve this problem at hand.
What is Affordable Housing?
Affordable housing is a term that causes a lot of misconception within our communities. Many assume that affordable housing is only for those in the lowest income bracket, and while that group is most impacted by increased housing costs, we all have a threshold for what is considered “affordable”. The department of housing and urban development defines affordable housing as the cost for housing and utilities that does not exceed a percentage threshold of the occupants’ gross income. In the 1940s, federal subsidized housing set the affordable rent rate at 20% of gross income. This number rose to 25% in 1961, and 30% in 1981, where it has become the standard indicator of affordability for housing, whether it be rented or owned. Households that spend more than this are considered cost-burdened, and those who spend more than 50% of their income on housing are considered severely cost-burdened.
Who Can’t Afford Housing?
As housing costs have risen more rapidly than wages since the 1960s, the issue of cost burdening has become ever more prevalent. In 2019, 30.2% of all households nationwide were cost-burdened and 14% were severely cost-burdened. Renters face higher cost burdening, at rates of 46% moderately cost-burdened and 24% severely cost-burdened, compared to homeowners at 21% and 9% respectively. By contrast, in 1960, only 12% of renters were considered cost-burdened. The primary reason for this is that housing costs have risen faster than the median wage, especially among renters. For the past eight years in a row, the median sales price of single-family homes rose faster than median household income.
Due to high housing costs, homeownership has been in a steady decline for over a decade. High expenditures of income towards rent make saving to purchase a home much more difficult. To combat severe cost burdens, those seeking housing often have to look further away from where they work, overcrowd their families into houses that are too small, and reduce spending in other areas such as transportation, health care, food, and education. Households that are cost-burdened are also much less likely to have sufficient savings for unexpected events such as illness, unemployment, or disaster.
How Did COVID-19 Impact the Housing Crisis?
The COVID-19 pandemic has impacted the housing market and housing crisis in multiple ways. For those already living in a cost-burdened situation, COVID presented as an unforeseen and uncontrollable disaster. Many people lost their jobs, and in the summer of 2020, 25% of renters failed to make a rent payment in full or on time. Many cities saw an increase in homeless individuals during the start of the pandemic due to evictions and loss of income, and systems in place to provide aid faced the additional stress of maintaining safe measures to protect these groups.
In order to protect renters who were unable to pay rent due to COVID’s impacts, the federal government put a moratorium on evictions. This, however, has only been a temporary solution to what will likely be a long-term issue. As we see the moratorium expiring, many tenants will be expected not only to resume paying regular rent, but also promptly pay backlogged rent from previously missed months. Some states, such as Oregon, have enacted extensions on paying backlogged rent and are requiring renters who take advantage of this system to apply for rent assistance. These systems have been confusing and difficult to navigate for tenants, and it is not known if these programs will be enough to combat the disparity in rent payments, or if we will still be seeing evictions increase once government protections expire.
Not only has COVID created additional strain between renters and landlords, but it has heavily impacted the market value of homes. Between quarter 1 of 2020 and quarter 1 of 2021, housing prices increased by 16% on average nationwide, with some metropolitan areas, such as Boise, ID, seeing 28% increase in housing values. Portland saw a slightly less, but still precipitous, increase of 14%, with the highest increases seen among homes below median market value. This was due to a restricted housing market with fewer homes selling during the pandemic and increased buyer demand driving up the market value. This growth is unsustainable and further exacerbates the affordable housing gap, decreasing the likelihood of those looking to get out of the renting cycle being able to purchase their first home anytime soon. Homes being built during the pandemic with increased costs of materials will likely further increase market value for new homes for purchase.
Conclusion
There have long been barriers to acquiring affordable housing for those who need it most. The pandemic has only further exacerbated existing disparities, lower wage earners experiencing higher rates of layoffs, more difficulty paying rent on time, and higher exposure to COVID-19 itself. The challenge of providing affordable housing for all is greater than ever, and it requires careful and considerate planning and design to be successful.
For more information on how Otak chooses to combat the housing crisis through our work, please read the following article: Pushing the Boundaries of Affordable Housing
Resources:
“2020 State of the Nation’s Housing Report: 4 Key Takeaways for 2021.” Cost of Home. Habitat for Humanity. Accessed 2021. https://www.habitat.org/costofhome/2020-state-nations-housing-report-lack-affordable-housing.
Balasubramanian, Sai. “The Covid-19 Pandemic Has Fueled a Crisis in the Housing Market.” Forbes. Forbes Magazine, April 27, 2021. https://www.forbes.com/sites/saibala/2021/04/27/the-covid-19-pandemic-has-fueled-a-crisis-in-the-housing-market/?sh=4d8cb60a5928.
Bloom, Ester. “A Shocking Number of Americans Live in Housing They Can’t Afford, According to Harvard Study.” CNBC. CNBC, July 13, 2017. https://www.cnbc.com/2017/07/13/harvard-study-heres-how-many-americans-cant-afford-housing.html.
“COVID-19 Homelessness Response.” A Home for Everyone. A Home for Everyone, February 2, 2021. http://ahomeforeveryone.net/covid-homelessness.
“Defining Housing Affordability: Hud User.” Defining Housing Affordability | PD&R Edge. U.S. Department of Housing and Urban Development. Accessed August 18, 2021. https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html.
Gartland, Erik. “2019 Income-Rent Gap Underscores Need for Rental Assistance, Census Data Show.” Center on Budget and Policy Priorities. CBPP, September 18, 2020. https://www.cbpp.org/blog/2019-income-rent-gap-underscores-need-for-rental-assistance-census-data-show.
“Homelessness Statistics.” Homelessness Toolkit | City of Portland. The City of Portland, February 12, 2016. https://www.portlandoregon.gov/toolkit/article/562207.
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Olick, Diana. “A Troubling Tale of a Black Man Trying to Refinance His Mortgage.” CNBC. CNBC, August 19, 2020. https://www.cnbc.com/2020/08/19/lenders-deny-mortgages-for-blacks-at-a-rate-80percent-higher-than-whites.html.
“Oregon Eviction Moratorium FAQ.” Portland.gov. City of Portland, Oregon, 2021. https://www.portland.gov/phb/rental-services/helpdesk/oregon-eviction-moratorium-faq.
Parker, Njeri. “The Link Between Racism and Homelessness.” JOIN. JOIN PDX, July 23, 2020. https://joinpdx.org/the-link-between-racism-and-homelessness/.
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Roos, Roy. “Albina Area (Portland).” The Oregon Encyclopedia. The Oregon Historical Society, May 15, 2021. https://www.oregonencyclopedia.org/articles/albina_area_portland_/#.YRrGSYhKiUk.