Affordable housing: Pipeline to success, or pipe-dream? - by Daniel Calano

November 10, 2023 - Appraisal & Consulting
Daniel Calano


Let’s assume that everybody in America, despite their politics, are for affordable housing. That’s because everybody agrees that housing costs a lot. But, like everything else, it depends on your financial ability, where you want to live, how and whether you can “afford” it. It’s at all levels. Clearly the homeless population is most impacted. Then the pain moves up the ladder to college and millennial renters, first homebuyers, with the final rung of the ladder being a growing middle class family who cannot afford the larger house down the street. In other words, it is all relative, but nonetheless a ubiquitous problem.

It’s not that this hasn’t been a problem looking for a solution for a long time. Various governmental programs over the decades have tried, with some successes. Government housing subsidies go back to World War II, providing veteran housing for returning soldiers. Urban renewal had its impact in the 1960s, creating whole new neighborhoods of housing. Subsequently, the Department of Housing and Urban Development (HUD) initiated rental subsidies (Section 8) for those who qualified, which stimulated construction of significant amounts of apartments. Most recently, in 2010 The New Rental Assistant Demonstration Project was begun. 

Suffice it to say, the federal government, combined with state and local governments have worked on this problem in earnest for a long period. Despite these efforts, a recent housing study has determined that “homes are unaffordable for 99% of the American population.” The quantitative analysis reaching this conclusion was not verified in the study, but let’s assume that it is at least categorically accurate. 

Clearly, the most reliable solution would be to provide more funds to build more housing or incentivize others to do so. However, at this point in time, the United States has around $28 trillion of debt to reduce, with $6 to $8 million annual budgets added in that are almost routinely underestimated. In short, money is hard to come by. On top of that, US funding for other priority projects such as infrastructure replacement has been in the queue for quite a while. Add to this our current funding in wars and humanitarian relief in areas like Ukraine and now potentially Middle East has been an unforeseen cost.

Solutions are complex and need to be creative. One for example, started by locally and backed by the Biden government is to convert certain urban office buildings to housing. This has been met with some success, but retrofitting costs have been high, or prohibitive. In a similar vein, municipalities have been modifying low density zoning into moderate density, allowing such things as in-law apartments, small unit subdivisions, mini-houses, etc. These efforts have met with some success, although of course they are often opposed by “not in my backyard”neighborhoods.

Fortunately, since it is almost everybody’s concern, whether directly or indirectly impacted, there will be more creative efforts and hopefully potential solutions to this problem. We all have skin in this game. New solutions are clearly difficult to test and implement, but without them our housing problems will surely deteriorate. We as urban planners, designers, developers, brokers, governments, share the same reasons to foster affordable housing. Whether we are directly impacted or not, we need to find solutions. 

Daniel Calano, CRE, is managing partner and principal of Prospectus, LLC, Cambridge, Mass.



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