With the country up against an accelerating crisis of affordability in housing that has evolved both in its scope and complexity through the pandemic, Harvard University this week hosted a cross-disciplinary lecture and Q&A session with Housing & Urban Development (HUD) Secretary, Marcia Fudge, that highlighted policy solutions and challenges to providing appropriate, affordable housing for all.
Recently, real estate professionals have grappled with the specific ways other issues have fed into a lack of affordability, and Fudge, in her remarks, made it clear that the country at large needed to acknowledge the complex mechanisms that create these problems in order to solve them.
“We did not arrive at this crisis by accident,” she said.
As more and more data has shown that less affordability can have far-reaching effects through real estate markets as well as the broader economy, Fudge emphasized that acknowledging this problem and finding solutions is a responsibility we all share.
“As children and grandchildren, parents and grandparents, siblings, partners, friends and neighbors, do we want to be sure seniors can age with dignity and children can live in safe and healthy environments? Are we responsible at all for the world that we leave?” she asked.
A lack of wage growth, deemphasizing housing-related investments (HUD has seen its budget and staff shrink drastically and consistently over many decades) and a history of inequity have all contributed to unaffordable housing, Fudge said. Though estimates vary as to exactly how much new entry level and low-income rental housing will be required to meet the current need, the country continues to under build and under plan for this type of housing, according to the HUD Secretary.
“We need millions of homes today to take the pressure off the market so people can afford to live in a decent home,” she said.
In her opening remarks, Fudge also emphasized the degree of racial discrimination and inequality that has pervaded the housing market, both historically and currently, pointing out the homeownership gap between Black and white households has actually increased since landmark Civil Rights victories in the like 1960s.
“We have built a nation on free slave labor, free prison labor—a direct outgrowth of slavery—and free military labor, but there has never been a discussion about equity or fundamental fairness or justice,” she said.
Detriments—past and present—to affordable housing include restrictive zoning, Fudge said, and grassroots opposition to certain types of housing construction. Sometimes referred to as “NIMBYism,” Fudge cited these attitudes as hampering affordability in certain types of neighborhoods, as regions like the West and Northeast have struggled particularly with local opposition to housing growth and densification.
Accessory dwelling units, or ADUs, have increased in popularity as an easy and straightforward way to increase housing in built-up areas, and Fudge highlighted these buildings specifically. which are sometimes known as “tiny homes” and “granny flats, “as an area of potential growth for affordable housing options.
Fudge called for more “out-of-the-box” solutions along these lines going forward, saying that traditional building practices simply weren’t working. She also referred to manufactured and factory-built homes and 3-D printed houses, saying these are avenues that are “being discussed” at HUD.
“The house you own and live in will look very different than the house that your grandparents and your parents lived in,” she said, addressing the Harvard students directly.
In conversation
About half the event was formatted as a discussion between Fudge, Harvard professor Jerold Kayden and the audience, with some questions submitted by the public as well.
Kayden’s first question was related to federal involvement with zoning, and whether national policymakers can successfully intervene to reform local zoning, which is often discriminatory, or how that could happen.
“You just have to always believe that people are going to do the right thing,” Fudge answered. She cited recent infusions of federal monies through various pandemic stimulus bills, as well as the approximately $1 trillion infrastructure bill signed by President Joe Biden in November.
“Cities are flush with money—they have the resources to make a difference,” she added. “The resources are there…we’re all in to try and make it happen. Yes, I am hopeful.”
Some local governments and leaders are still not onboard with the ideas behind zoning reform, Fudge reported, but she posited even those would start to see the light as more citizens bring concerns about the harm of current policies to them directly.
“Every single mayor is going to have to see that there is a problem,” she said. “We’re at a tipping point now.”
Other topics include HUD programs to encourage homeownership, with Fudge saying that student debt and down payments have proven the biggest barriers for lower-income families—particularly people of color—from achieving homeownership. Having credit scores include on-time rent payments in their calculation is another way to move forward.
“We want to do our part to encourage people to look at homeownership,” Fudge said.
A question from a student focused on the labor market and automation, asking whether the country should provide for people’s basic needs, including housing, rather than worry about job losses due to technology. Fudge answered she “doesn’t disagree” that tech advances should provide these things, but focused more on education and offering more opportunities in science and math for students rather than addressing the larger question.
“At some point we have to decide for ourselves that we’re going to invest in training and teaching our students to do the jobs of the future,” she said.
Another audience member asked about affordability balanced against wealth building, worrying that an increase in inventory might depress home prices.
“I don’t think we lose wealth building,” Fudge answered. “The pricing is always going to continue to go up, it just won’t go up as rapidly. And what we do is we bring people into the market who had been left out of the market. It’s not that they’re not going to make money, but we really are in a bubble right now.”
Jesse Williams is RISMedia’s associate online editor. Email him with your real estate news ideas at jwilliams@rismedia.com.
