Report: Increasing housing supply does not equal affordability for low income renters

Phoenix has been grappling with the problem of affordable housing for years now. We are one of the fastest-growing housing markets in the country, but we still don’t have enough of it. So, one of the answers to lower prices has been simple: Build more housing!

But a new report found — it’s not working. At least, not for folks at the bottom of the economic ladder.

Lelaine Bigelow is executive director of the Georgetown Center on Poverty and Inequality. In their new report, Abundance for Who?, Georgetown researchers examined housing affordability across six large metro areas in the U.S., including Phoenix.

The Show spoke with her more about what they found.

Marvin Mansilla

/

Handout

Full conversation

LELAINE BIGELOW: We wrote this because there is a conversation happening right now around housing affordability, and we wanted to ask the question about housing supply and whether or not that really does meet the needs of all people.

In Phoenix, we found that most new housing served mostly high income renters. That means lower income households have not been accessed all of the housing supply construction that has been happening over the past few years in Phoenix.

LAUREN GILGER: Right. So you're looking at the number of households, you know, who are able to get into housing basically and found that even as we're building a lot more, which has been a big part of the conversation in housing affordability here in Phoenix, you found we outpaced the national average in building, those people on the bottom had fewer options even than they did before.

BIGELOW: Exactly. Low income renters continue to face rising rents and fewer options.

GILGER: Yeah, and I think ironically, like you found that even though people on the extremely low household income side of things saw rents go up, people who make a lot of money, higher income households saw rents go down.

BIGELOW: Right. And I think what this report showed is what a lot of people feel anecdotally. So if you are working class, middle class, low income, you are struggling to pay for housing, you're paying more than the 30%, which should be normal.

But if you're at the higher end of the income scale, you have a lot more flexibility and you have a lot more housing options.

GILGER: Yeah.

BIGELOW: To me, one of the most interesting pieces about Phoenix is that it had the highest vacancy rate for newer units, and so that was around 9.4%. I think it also shows you what private developers can do at the high end of rental units. They can allow these units to sit vacant for a longer amount of time rather than make them more affordable for people who need it.

GILGER: So I think this is interesting, a lot of fronts. But let me ask you first about the broader context here, you looked at not just Phoenix, but other metro areas. Did you find the same trend across the board?

BIGELOW: Absolutely. We did find the same trend in almost all of these cities, which there were higher vacancy rates and new units, that lower income renters did experience higher costs, and that essentially more supply does not equal more affordability.

GILGER: So I mean, the question then has to be about policy, which is, I'm sure, part of what you're studying at Georgetown there. I mean, when you talk about affordable housing, a lot of the conversation in Phoenix has been about short-term rentals. It's been about building ADUs, casitas in backyards, and loosening zoning restrictions, and it's been about building more.

It's been, you know, lots of folks will say this is just simple supply and demand. We need to build more housing in order to, you know, get more people into it. But it sounds like it's not that simple. It needs to also be about what kind of housing we build.

BIGELOW: Absolutely. So I think it's really important to talk about this concept that has been treated as gospel in the housing community, which is that if you build more housing, then a more affordable housing will filter down to lower income folks. And that isn't always true. I will say it's not untrue. It can happen and it has happened.

But really what the research shows us is that that concept is uneven and it's limited. And as an organization that studies policy issues around people experiencing poverty, we know that unless you design housing policies, job policies, whatever it may be, around people who are lower income, that intention won't just come on its own.

So when lawmakers on the local level, state level or federal level are looking at designing affordable housing policies, they need to figure out how can we actually reach low income people?

GILGER: And that has to be, it sounds like, policy decisions. It has to be local governments coming in and saying, you can build this, but you have to include this many affordable housing units or incentivizing developers to come in and build affordable housing.

What kinds of policy options are on the table?

BIGELOW: Yes, there's tons of policy options on the table, and it is more than just supply. And there are already methods to help sort of ease the burden of what's going on right now while supply can be built. So there are housing choice vouchers that makes housing affordable for people with extremely low and very low incomes.

There's other rental assistance programs across the country. There's more appropriations for these federal housing programs that I just talked about. There's creating social housing. There's incentivizing more diverse housing types from cities.

So when all of this construction goes up, you know, the question that cities need to be asking developers is, is there family housing? How many bedrooms are there? And what incomes are able to afford the housing at the rate that you're going to offer, you know, these rental units?

So those are really key questions. And again, a lot of menu of options for lots of lawmakers and officials to address the housing problem.

GILGER: So one of the things that comes to mind there when you're listing, you know, all of these options for policymakers is obviously like political wins and how difficult it can be to get those kind of policies put into place. But also, I mean, what you'll see often with affordable housing and attempts to build affordable housing is that the people who live near it don't want it. This "not in my backyard" idea. How do you get around that?

BIGELOW: You know, I, that's a great question. But I will say what I've known from working at, on the federal level at HUD is that mixed income, mixed use development is a really great way to show people that communities thrive on lots of different people and building like truly a diverse community. And that helps everyone, not just people at the low income scale.

And it helps actually build that ladder, that American dream that we have all talked about. And right now that ladder, ladder, you know, there's no rungs at the bottom so no one can actually climb up that ladder.

So I think if we're talking about having people have access to affordability and housing, we have to think about those issues as a whole because these are the, you know, these are probably your neighbors. These are, this is the coach for your kids soccer team. It's the teacher, it's the firefighter. So when we talk about building communities, I really encourage people to think about, it's not just about you, it's about all of us.