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August 2015

New foundation believes political leaders can do more to address nation's housing needs

Book: The Silent Housing CrisisFashioning a new federal housing policy to address new market realities is "an urgent national imperative," according to the authors of The Silent Housing Crisis: A Snapshot of Current and Future Conditions.

Housing in the U.S. is in a dire state, the report states. It is "often overlooked by policymakers, ignored by the media and underestimated by the general public, despite deeply impacting millions of families and clouding our nation's future," it continued.

Moderate- and lower-income families face numerous powerful headwinds in today's market. Acknowledging various factors are contributing to the crisis, the authors urged action by the nation's political leaders, emphasizing, "We can no longer afford to stand by as housing becomes a cause of distress for more and more of our fellow citizens rather than the source of stability it should be."

The newly-launched J. Ronald Terwilliger Foundation for Housing America's Families published the 31-page white paper. The Foundation intends to be catalyst in pushing housing to the top of the nation's domestic policy agenda. As a first step, it will seek to inject housing as a central issue in the upcoming Presidential primaries.

To make the case for the existence of a housing crisis, the white paper outlines several facts that underscore the growing challenge of housing affordability, including:

  • Housing affordability has become a significant and growing challenge for millions of families. An estimated 20 million families are spending more than half their income on housing, according to data cited in the report.
  • Renter households face "particularly alarming" cost burdens, with an estimated 27 percent of renters (11 million households) now paying more than half their incomes for housing.
  • There is an acute shortage of rental homes affordable to families with the lowest incomes. The situation is aggravated by a "woefully insufficient" production of new rental homes that are affordable to those at the lowest end of the income spectrum.
  • Inadequate federal rental assistance. The report notes only about one in five households that are eligible for assistance actually receives it.
  • A shrinking national homeownership rate - the lowest level in 20 years, and more than five percentage points below the peak in 2004.
  • A 27-year low in the share of home purchases for first-time homebuyers.
  • Stagnating household incomes.

Changing demographics are also expected to exacerbate the "troubled conditions that define housing today."  Four demographic factors will converge to substantially increase the already strong demand for rental housing:

  1. New household formation by young adults
  2. The increasing diversity of the U.S. population
  3. Higher expected annual immigration levels; and
  4. The aging of the 78 million Baby Boomers (those born between 1946 and 1964)

Minorities will be the driving force behind new household formation for the foreseeable future. This cohort will account for 77 percent of total household growth from 2010 to 2020, and an even larger ratio (88 percent) in the ensuing decade.

Reminding readers of the landmark Housing Act of 1949 and its intent to provide access to safe and affordable housing, the authors said achievement of this worthy goal remains elusive. New, more effective approaches are needed, they contend.

Not only is the nation "unprepared for a rapidly expanding renter population," there are also "powerful headwinds" facing moderate- and lower-income families. These threats include:

  • More conservative underwriting standards that will make achieving homeownership more difficult, event for creditworthy households.
  • A staggering amount of student loan debt, which undermines homeownership opportunities for many young adults. In 2013, an estimated 70 percent of graduating college seniors carried student loans, owing, on average, more than $28,000.
  • The accumulated impact of more than a decade of household income stagnation and decline. This has a profound impact on those between the ages of 25 and 44 - the group most likely to be first-time home buyers.
  • Income disparities. Research indicates the annual incomes of renter households are less than half that of typical homeowner households.
  • The challenges of supplying multifamily housing for the lowest income families considering the substantial gap between development costs and what these families can afford to pay in rent and inadequate subsidies.


"If the housing affordability crisis is silent, it's not for lack of research that documents the extent of the issue," commented Chris Herbert, managing director of the Joint Center for Housing Studies of Harvard University.

Citing one report, he said for every 100 extremely low-income renters there are only 28 units that are affordable, in adequate condition, and not occupied by higher income households. Another report Herbert referenced indicates there "is not a single state in the country where someone working year-round at the federal minimum wage can afford a moderately priced two-bedroom rental."

Unless there is a comprehensive and sustained policy response, the authors predict rental cost burdens will grow in intensity and scope. Such conditions will "exacerbate income inequality, diminish the prospects of social mobility for countless individuals, make us less competitive in the global marketplace, and ultimately hinder America's economic growth.

"Given the magnitude and extent of the housing affordability crisis and the growing awareness of these issues, what seems to be missing is the political leadership needed to identify the lack of affordable housing as a national challenge and to make a case for action by the public sector," commented Herbert.

Established in 2014, the J. Ronald Terwilliger Foundation for Housing America's Families seeks to recalibrate federal housing policy so it more effectively addresses the country's critical affordable housing challenges and meet the housing needs of future generations. Its mission is to foster engagement with this issue among political leaders from both sides of the aisles and "to jump start the policy debate by identifying practical suggestions for how reform of federal efforts can better address the country's housing needs."