Panelists at the recent ULI Housing Opportunity 2019 conference said that while the data paint a bleak picture of America’s housing affordability, the spending priorities of California’s new governor may be a sign of positive policy changes at a more local level.
Retired Trammell Crow chief executive Ron Terwilliger set the tone for the conference during his opening remarks, quickly turning the focus to the escalating housing crisis.
“We’re going backwards in terms of affordable housing,” said Terwilliger, founder and chairman of the ULI Terwilliger Center for Housing and a former chairman of ULI.
Panelists argued that the shortage of affordable housing—and efforts to remove obstacles to build more of it—represent the biggest opportunity for the industry in the coming years.
“I think this is a significant moment,” said Ben Metcalf, director of the California Department of Housing and Community Development. “We have an opportunity to question the assumptions of how we work.”
By all measures, supply is not keeping up with demand, said Ryan Davis, director of research for Witten Advisors. Housing starts still have not returned to modern average levels, he said. And the metrics of creating affordable housing are growing more challenging, with construction, land, and labor costs all rising in recent years, he said.
But speaker after speaker emphasized that the housing imbalance and the increasingly dire need for affordable homes in many areas will result in new business models in the years ahead. With the federal government in a state of perpetual political standoff, the real action “has moved to the state and local level,” Terwilliger said.
In California, there is a new governor and new priorities, Metcalf said. In November, in addition to electing Gavin Newsom, California voters passed two measures allocating a total of $6 billion to low-cost housing. “That will really be a good shot in the arm,” he said.
Newly elected Governor Newsom has also announced plans to make housing a top priority, providing hope that the state can find new ways to encourage construction.
“We’re looking for ways to bring nontraditional players into the game,” Metcalf said. “We’re not just telling locals what to do—we can help them get there.”
The private sector is often missing from solutions, said former U.S. Congressman Rick Lazio, during a free-flowing luncheon discussion. “We don’t engage business as much as we should,” he said.
Many interesting tools are merging that can help spark more housing, including land banks, land trusts, and development around transit corridors in Denver and other cities. But ultimately the federal government will have to get involved to make sweeping changes, he said.
“The federal level is the one way to really scale solutions, and that’s one of the big political challenges,” Lazio said.
It is also shortsighted to focus only on housing construction, he said. “We cannot ignore the demand side,” Lazio said. “You cannot really address affordable housing only on supply.”
Too often, reforms on the state and local levels are too narrowly focused, Metcalf said. “We spend a lot of energy on small slices,” he said. “We need to get beyond that. It’s not getting better.”
Much of the discussions focused on new ideas and approaches to breaking the logjam. “It’s not that we don’t know what to do, it’s getting over the hurdles,” said Lisa Sturtevant, senior visiting fellow with the Terwilliger Center, during a panel titled, “Myth Busting: Reframing Housing Affordability.”
Part of her work is focused on finding new ways to engage with the public regarding the importance of affordable housing. “Often there is a lack understanding of the impact,” she said.
In Hilton Head, South Carolina, ads were created to personalize the discussion. The print ads focus on an individual waiter or health care provider and ask, “What happens when they can’t afford to live here?”
“We don’t want to present data, we want to present stories,” Sturtevant said.
Several speakers emphasized the need to change the dialogue about affordable housing. Often, housing is viewed as a distinct issue, recognizing its impact on business and the community.
“You can’t talk traffic without talking about housing,” said Ma’Ayn Johnson, housing program manager at the Southern California Association of Governments.
One of the primary goals of “Up for Growth,” the coalition of housing associations, is to help explain the nuances of the housing crisis, said Mike Kingsella, executive director of the group. Up for Growth has developed a variety of research and tools to help explain the many variables affecting housing prices, including regulations.
The group is trying to “put it in terms the public will understand,” Kingsella said. “What is the trade-off? What ultimately impacts what rental units will be priced at?”
Advocates can find better ways to deliver the messages, panelists said. One way would be to look for new spokespeople, preferably “somebody who doesn’t make money from building housing,” said Calandra Clark, codirector of the Center for Housing Data at the Massachusetts Housing Partnership.
She also emphasized the importance of focusing on the issues that are important to the community beyond housing, including health and the care and safety of children.
“If you’re trying to get at what people care about, children is number one,” Clark said.