A new analysis points to the benefits of ending the severe affordability crisis.
Tanvi Misra Sep 20, 2017 Link: CityLab
Renters of all ages and races are being pinched to keep a roof over their heads. But the affordability crisis is, at its core, an equity issue. Homeownership—the primary way to build wealth in America—has always been set up to favor the white and the rich. Then the recession hit, dealing extra blows to people of color. So, it’s not a coincidence that the black homeownership rate has seen the steepest decline, plummeting to 1994 levels; simultaneously, minorities have made up the bulk of the increase in renter household numbers in the last two decades.
For the poorest Americans, there are already some programs that base rents on affordability, including the federal Section 8 Project-Based Rental Assistance which subsidizes private rent.
If the Department of Housing and Urban Development (HUD)’s affordable housing programs get slashed, renters would stand to lose the most—(in some ways, they already are). On the other hand, if the government prioritizes ending the affordability crisis through greater, more targeted rental aid and incentives for affordable housing construction, black and Hispanic households could see the highest gains. The two groups would see 13 and 11 percent increases in their disposable income, respectively (in chart below). Others would be better off, too, mounting credence to the claim that higher racial parity makes cities richer.