Affordable Housing Production Research Articles

Harnessing the real estate market for equitable affordable housing provision: insights from the city of Santa Monica, California

Inclusionary housing is considered a powerful local policy tool that can help address housing affordability and social inclusion issues. This paper draws from empirical research conducted in the City of Santa Monica in California to provide fresh insights on a successful innovative inclusionary housing program, the Affordable Housing Production Program (AHPP). This program was established to increase affordable housing production and enable social integration. Based on the Land Use and Circulation Element (LUCE) of the General Plan, the AHPP seeks to capture some of the increase in land value resulting from planned increases in the intensity of development. Our research shows that the program increased inclusionary housing production by market-rate developers by 15% over the previous inclusionary housing policy. The study finds that land use policies and planning can, through inclusionary housing, help harness the strength of the real estate market to (1) increase affordable housing production, and (2) achieve effective social integration in neighborhoods of opportunity.

Harnessing the Real Estate Market for Equitable Affordable Housing Provision through Land Value Capture: Insights from San Francisco City, California

Affordable housing remains a serious problem in many countries. Even as the housing affordability crisis deepens, most cities continue to exhibit robust real estate markets with high property prices. The low-income and poor households are unable to access affordable housing and remain excluded. This paper draws from empirical research conducted in the city of San Francisco and focuses on the application of Land Value Capture (LVC) through increased Inclusionary Housing (IH) requirements after plan changes that increased density potential in San Francisco’s Eastern Neighbourhoods to evaluate its effects on the goals of increasing both affordable housing and social inclusion. Findings reveal that the increased inclusionary requirements used as LVC mechanism enabled 76.2% of all the affordable housing units produced in the Eastern Neighbourhoods to be produced by market-rate developers in 2011–2015 as compared to the rest of San Francisco, where 35.5% of the affordable units were produced from the market through inclusionary policy during the same period. The study demonstrates that upzoning underutilised land coupled with a well-planned LVC mechanism can help harness the strength of the real estate market and increase both affordable housing production and social inclusion.

Funds for Kickstarting Affordable Housing Preservation and Production: Lessons for New Investors

A shortage of affordable homes for workers and families at all income levels across the country calls for innovative solutions. Over the past decade, a variety of public-private loan funds have developed to kick-start construction and preservation of affordable housing. This report breaks down how these funds fit into the process of developing and preserving affordable housing and shares lessons for those who are considering starting or investing in a fund.

Private finance integration to affordable housing production: a comparison between Copenhagen and Istanbul

This study analyzes transformations in institutions of affordable housing production connected to neoliberalization, which have impacted affordability rates and income gaps in Copenhagen and Istanbul. Also, different types of affordable housing began to develop, such as modular housing of Almenbolig+ in Copenhagen and housing for very low-income people in Istanbul. Increased affordability rates are the results of the transformations of welfare state-based practices to market-based approaches. The aim of this paper is to analyze and compare how affordable housing institutions have transformed from being financed through public funds to private funding sources since the periods of financial crisis in 2001 and 2008 in a Western and non-Western country. Using the concept of neoliberal localization, this comparative case study employs variation finding tool to analyze the transformations under three causal mechanisms. The first mechanism is state withdrawal of providing finance to affordable housing production; second, collaboration with private sector for financing affordable housing while increasing authority of municipalities. The third mechanism is restructuring institutions to open a base for public-private partnerships. Primary data was provided from interviews, while secondary data was gathered from planning policies, legislations, OECD and country statistics. The outcome of this study reveals information about changes in affordable housing institutions and neoliberal effects on affordable housing production due to contributions of local governments contingent on requirements of private funding.

Backyard Housing Boom: New Markets for Affordable Housing and the Role of Digital Technology

In an effort to address California’s affordable housing shortage, lawmakers recently passed statewide legislation removing barriers to the development of accessory dwelling units (ADU). Not since the postwar suburban housing boom has such a significant new market for residential production been created in Los Angeles and, more broadly, across the entire state. Simultaneously, new digital technologies are overcoming constraints in finance models, design processes, and construction practices that restrict ADU production. Through interviews conducted with emerging ADU service providers in Los Angeles, this paper identifies how digital technologies and regulatory change are enabling emergent forms of practice and production for addressing a significant housing shortage. Specifically, it asks what role digital technologies may play in facilitating the mass production of affordable housing in the post-suburban city.

Housing access and governance: The influence and evolution of housing organizations in Mexico City

Through the analysis of personal interviews, resident surveys, government documents, newspaper and community accounts, among other relevant data, this paper studies housing movements and organizations in Mexico City, and exemplifies the reach that social mobilizing and organizing may have on cities and their political structures. In this context, mobilizations around detrimental housing conditions provided more than support to low-income tenants and affordable housing production; they contributed to the democratization of the local government. This in turn helped, with the election of a sympathetic government, to consolidate housing programs, norms, and institutions. Thus, and despite limited resources, new local housing strategies set notable standards at the national level. More recently, however, grassroots organizing efforts and community involvement in processes of affordable housing production have lost standing. Furthermore, housing organizations and leaders have become increasingly susceptible to political processes and electoral cycles. As civic groups have ceased to effectively monitor government actions, housing policies and efforts have lost legitimacy among the citizenry and housing unaffordability has remained a significant issue. Yet, although some housing organizations have lost autonomy, they have not necessarily lost their ability to influence local politics and policy. The evolution of these organizations, therefore, provides notable lessons to those that seek to institutionalize their demands and strengthen their ability to shape the growth and development of their cities and regions.

Achieving Regional Housing Planning Objectives: Directing Affordable Housing to Jobs-Rich Neighborhoods in the San Francisco Bay Area

Problem, research strategy, and findings: Low-income households face affordability issues and are often forced to live in areas with limited job access and inadequate transportation. Local communities exacerbate these problems through exclusionary zoning. We study the impact of the Association of Bay Area Governments (ABAG) change in allocation formula under California’s affordable housing mandate. The old policy followed a fair share strategy, whereas the new policy requires local jurisdictions to locate mandated affordable housing units in jobs-rich areas. We compare affordable housing produced in the region before and after ABAG adopted the jobs-housing policy; we also compare the new patterns to the location of market-rate housing and to the experiences of San Diego (CA) and Los Angeles (CA), both of which retain fair share allocation. We do not control for variables that may have affected affordable housing location. ABAG’s policy shift is associated with a 104% improvement in the balance of housing and jobs at the local level; affordable housing units are more likely than market-rate housing to locate in jobs-rich areas, which may indicate that localities prioritize affordable housing. We also find that more affordable housing locates in such areas in the San Francisco Bay Area (CA) than in San Diego or Los Angeles.Takeaway for practice: A voluntary regional government in a state with mandatory affordable housing requirements can affect the production and distribution of affordable housing. A total of 25 U.S. states require localities to include affordable housing elements in their comprehensive plans; we suggest that regional and local planners use these opportunities to meet multiple policy goals by directing affordable housing to jobs-rich neighborhoods.

The What, Where, and When of Place-Based Housing Policy’s Neighborhood Effects

Ever-scarce affordable housing production resources, in addition to their primary function of providing housing for those in need, are increasingly enlisted for the dual goals of strengthening distressed communities and increasing access to higher opportunity neighborhoods. Information on spillovers can inform investment decisions over time and across communities. We leverage recent, high-quality research on neighborhood effects of Low-Income Housing Tax Credit (LIHTC) production, synthesizing evidence according to neighborhood context. We also summarize the evidence on project features moderating impacts of publicly subsidized, place-based rental housing, in general. We conclude that context matters. Producing LIHTC housing in distressed neighborhoods positively impacts the surrounding neighborhood—in terms of modest property value gains and increased safety. By contrast, higher opportunity neighborhoods experience small property value reductions, and no impacts on crime. Big questions remain, however, about impact heterogeneity—via tenant mix, property design, and ongoing property management, as examples—with the scarcity of systematic data representing one of the field’s largest constraints.

Do Shrinking Cities Allow Redevelopment Without Displacement? An Analysis of Affordability Based on Housing and Transportation Costs for Redeveloping, Declining, and Stable Neighborhoods

Plans and policies to combat or mitigate gentrification typically pursue affordable housing production and preservation as the primary mechanism to avoid displacement. However, it is unclear whether affordable housing financing mechanisms function as designed in weak market cities. As such, we question whether the housing-only approach is a complete one and whether increased transportation investments in redeveloping neighborhoods in shrinking cities can be leveraged to improve the lives of the poor. Our results suggest that funding for subsidized housing does not produce units affordable to the poor in declining cities, limiting the efficacy of a housing-only approach. Furthermore, we find that transportation costs make up a larger proportion of household budgets among families living in declining neighborhoods. These results suggest that transportation improvements—particularly those aimed at bicycling and pedestrian accessibility—may be the most efficient approach to mitigating displacement and improving quality of life for low-income households in shrinking cities.

Comparing Informalities

This article compares various forms of housing informalities, especially slums and gunthewaris that are present in Maharashtra. The comparative stance enables an insight into the dynamics that generate informalities and the disjuncts in the policies that have chosen to deal with them as specific forms that merit a distinct response. Such a policy response that does not address the basic causes that generate these informalities attenuates a policy environment that continually creates a state of exception. In fact, it seems to be leading to a scenario where planning and production of affordable housing is becoming increasingly difficult.

The potential of community entrepreneurship for neighbourhood revitalization in the United Kingdom and the United States

Purpose– The aim of this paper is to assess the current potential of community entrepreneurship in neighbourhood revitalisation in the US and the UK. The global economic crisis has had a major impact on government spending for urban regeneration. In the context of these austerity regimes, in many European countries, community entrepreneurship and active citizenship are increasingly considered as a means to continue small-scale urban revitalisation. This paper investigates recent literature on both British community enterprises (CEs) and American community development corporations (CDCs).Design/methodology/approach– Starting from a seminal article, this paper reviews literature focusing on the role of CEs and CDCs in neighbourhood revitalisation. Differences and similarities are analysed, taking into account national context differences.Findings– While CDCs have a relatively successful record in affordable housing production in distressed areas, CDCs are fundamentally limited in terms of reversing processes of community decline. CEs in the UK have focused on non-housing issues.Research limitations/implications– This paper asks the question what CEs can learn from CDCs in terms of scope, aims, strategies, accountability, assets and partnerships with public and private actors. However, a systematic literature review has not been conducted.Originality/value– This comparison reveals not only similarities but also differences with regard to aims, organisational characteristics, cooperation on multiple scales and community participation. Apart from lessons that can be learned, this paper provides recommendations for further research that should cover the lack of empirical evidence in this field.

Community Entrepreneurship in Deprived Neighbourhoods: Comparing UK Community Enterprises with US Community Development Corporations

Through a review of the recent American community development literature, this paper tests the assertion that British community enterprises (CEs) are fundamentally similar to American community development corporations (CDCs), and therefore, that CEs can learn from CDCs. In the context of the current austerity regimes, CEs and community entrepreneurship are increasingly considered as a means to continue small-scale urban regeneration, not only in the UK but also in several other European countries. While the CDC sector has achieved a relatively successful record in affordable housing production in distressed areas, CDCs are fundamentally limited in terms of reversing the processes of community decline. Our comparison of CDCs and CEs reveals similarities, but also differences with regard to organizational characteristics, co-operation on multiple scales, comprehensiveness, targeting and community participation. Apart from outlining lessons that CEs can learn from CDS, we provide recommendations for further research that should cover the lack of empirical evidence in this field.

Measuring What Matters: A Call for a Meaningful Metric of Affordable Rental Housing Production Cost-Efficiency

The metric commonly used in debates and research concerning the cost-efficiency of multifamily rental housing production, total development cost per unit, sacrifices too much analytical power in return for its ease of computation. This article proposes a replacement metric, the subsidy per housing affordability equivalent (SHARE) ratio. This measure is applied to a set of 399 nonprofit-sponsored rental housing developments completed in California over the past decade. Evidence suggests that the use of SHARE would evaluate deeply subsidized family projects and mixed-use projects with commercial space more favorably than total development cost per unit would. The reverse is true for projects restricted to seniors and for those financed with Low-Income Housing Tax Credits.

Mandatory Versus Incentive-Based State Zoning Reform Policiesfor Affordable Housing in the United States:A Comparative Assessment

To break the chain of exclusionary zoning and produce affordable housing, mandatory state zoning reform policies have been in place for a couple decades in the United States. Their success is often constrained by local resistance and noncompliance. Some scholars argue that the lack of incentives to communities for affordable housing production is one of the main reasons for their resistance to state mandates. At present, no incentive-based state zoning reform policy is at work except in Massachusetts. Inclusionary zoning policies do offer incentives to developers but not to communities. This article examines the strengths and weaknesses of mandatory state policies and Massachusetts's incentive-based policy and offers policy insights for the future.

The City’s Wealth and the City’s Limits

The history of housing policy in Berkeley over the past thirty-five years provides a case study in the limits that state government can place on local government efforts to increase social equity. In 1976, a group of visionary planners and activists wrote The Cities’ Wealth: Programs for Community Economic Control in Berkeley, California. Berkeley’s progressives won control of the city government and tried to implement the proposed housing policies, which included strong rent controls to shield tenants from rising rents and using taxes and exactions to divert part of the city’s increasing real estate values toward production of nonprofit affordable housing. Conservative antitax activists and real estate interests were able to use appeals to the state courts, lobbying the state legislature and statewide initiatives to weaken or block many of the progressive programs.

Indicator based sustainability assessment tool for affordable housing construction technologies

With the growing worldwide demand for affordable housing and the importance of supporting and stimulating sustainable development, the need for sustainable solutions in the affordable housing sector is at a peak. The present paper screened about 75 construction technologies and assessed 46 of them. The present paper presents the first results of a step wise approach to identify, assess and recommend most promising technologies for affordable housing projects. A database was developed to store detailed technical information about each of the technologies. A grading and ranking scheme was developed to identify the most promising construction technologies from a sustainability perspective. The main challenges for affordable housing production and most relevant assessment indicators were identified from the literature, interviews and meetings with experts. An indicator based assessment system was developed by cross-referencing the identified eight challenges with ten selected indicators. The final ranking demonstrated that a wide variety of technologies perform strongly overall, and these range from bio-based materials, such as bamboo and timber, to industrialized technologies, such as concrete. Moreover, the possibilities for improvement are vast, and the option of combining different technologies seems to be the most promising approach.

Adoption of Institutional Options for Affordable Housing Production: Collective Action Problems and Option Choice

This study investigates the factors that influence the choice of options for affordable housing production. It also demonstrates the utility of the Institutional Collective Action (IAC) framework by identifying how it can be applied to the choice of options for affordable housing production. The findings of this study show that the option chosen by a local government for affordable housing production depends on property value of affordable housing and the capacity of local government, rather than local government’s social responsibility and the community’s economic condition. This study also demonstrates that transaction costs incurred due to land regulations can substantially influence the adoption of options for affordable housing production. Finally, one of the important findings is that networks between regional cooperative agencies and local governments can promote a rehabilitation option for affordable housing production. This result suggests that local governments need to actively take advantage of coordination with regional agencies to successfully promote affordable housing production.

The credit crunch and subsidized low-income housing: the UK and US experience compared

This paper examines how the mortgage crisis and subsequent recession have affected subsidized rental housing in the United Kingdom and the United States. These two nations approach the housing needs of low-income households in very different ways and to very different degrees. In the UK, non-profit housing associations are pivotal to the production and management of affordable rental housing; in the US, the affordable housing system revolves mostly around a single program, the Low-Income Housing Tax Credit. Yet the crisis destabilized key parts of both countries’ subsidy systems and raised important questions about their sustainability in the future. The UK responded sooner and arguably more effectively than the US to the crisis. However, over the longer term, the prospects for affordable housing development are likely to be more difficult in the UK than in the US.

Social Policy and the U.S. Tax Code: The Curious Case of the Low-Income Housing Tax Credit

The Low-Income Housing Tax Credit (LIHTC) is the federal government's largest subsidy program for the production of affordable rental housing. The LIHTC is allocated infixed amounts each year by st...

Essential Function Bonds: An Emerging Tool for Affordable Housing Finance

Essential Function Bonds (or EFBs) are issued by housing authorities to finance the construction and substantial rehabilitation of affordable housing or other community facilities owned by state and local housing finance agencies. Although some state agencies issue EFBs as part of their efforts to expand affordable housing opportunities, local housing authorities have pioneered the use of this tool. As part of a broader effort to reform public housing, the Quality Housing and Work Responsibility Act of 1998 authorized new ways to leverage capital and operating funds and stimulated interest in bond financing mechanisms. Building on information from a previous study, the Joint Center for Housing Studies surveyed local housing authorities and discovered that since the last survey in 1995 when agencies reported construction or rehabilitation of 16,063 units via EFBs, the use of EFBs has surged, resulting in the construction or rehabilitation of 41,615 units of housing between 1995 and 2002. This report briefly summarizes the nation's continuing affordable housing challenges and the efforts made by local housing agencies to expand production and rehabilitation of affordable housing. It discusses the survey methods used by the Joint Center for Housing Studies as well as the growing use and acceptance of EFBs. The report contains case studies documenting EFB use, and finally briefly discusses some of the policy challenges facing local housing agencies as they seek to meet continuing housing and community development needs.