What to Do About Housing Affordability

With affordable housing in steady decline, NAR and REALTOR® associations are planting the seeds to extend homeownership to all.

Affordable housing grows scarcer every year. Record-high home prices and record-low inventory have combined for a “double whammy” that prevents an increasing number of consumers from realizing their dream of homeownership. A new report from the National Association of REALTORS® and realtor.com®, The Double Trouble of the Housing Market, offers the stark numbers: As of December 2021, 400,000 fewer affordable homes were available nationwide for sale to moderate-income households when compared to December 2019. This means that for households earning $75,000 to $100,000 a year, one affordable listing is available for every 65 households, a steep drop from 2019, when one affordable listing was available for every 24 households.

The numbers are equally sobering on the local level. NAR’s latest Housing Affordability Index shows that two-thirds of U.S. metro areas had double-digit, year-over-year increases in the median price of an existing single-family home during the fourth quarter of 2021. And it wasn’t just in traditionally high-priced areas such as San Francisco and Honolulu. Smaller metro areas including Ocala, Fla.; Ogden, Utah; and Boise City, Idaho, all had increases of more than 20%. Nationwide, the median price of an existing single-family home rose 14.6% to $361,700 in the same time frame.

Rising mortgage rates and the burden of student loan debt—which has an outsize effect on millennials and people of color—creates further hurdles. So, despite the hot housing market—and the fact that total home valuation nationwide rose to a record $8.1 trillion by end of 2021—the rate of homeownership has remained relatively static at 65%. “Homeownership attainment will become especially challenging unless drastically more housing supply is available,” NAR Chief Economist Lawrence Yun said in a recent NAR news release. 

What can be done? Quite a lot.

Money plant with coins superimposed over a row of neighborhood houses

© Krisana Antharith / Eye Em / Getty Images Georgepeters / E+ / Getty Images

NAR is championing housing affordability with a comprehensive advocacy platform, which includes reducing burdensome regulatory processes; revitalizing vacant spaces; and expanding the financial resources available to prospective buyers. And REALTOR® associations are on the front lines in their jurisdictions, drawing on NAR resources to develop innovative programs that help consumers into homeownership, providing them with the opportunity to build generational wealth and equity in their homes.

State and local associations focused on advancing affordable housing policy can turn to the Issues Mobilization Grant. Awards range from less than $25,000 to more than $2 million. NAR provides this resource to assist in researching community needs, developing the actual policy, and launching campaigns to push vital information out to consumers. Grants can be used for specific activities such as polling, direct mail, phone calls, advertising, and social media services provided by approved NAR consultants.

The key to effecting positive change, for many associations, lies in partnerships with NAR and the community. In fact, four major opportunities are available for associations to help achieve affordable housing goals: Issues Mobilization grants, the Advocacy Everywhere program, and Housing Opportunity grants—all provided through NAR—along with the power of partnerships with nonprofits and local government to enhance affordable housing efforts.

Issues Mobilization Grants

In 2020, with its centenary just around the corner—and issues of racial justice in the forefront of national discussion—the Colorado Association of REALTORS® decided to build on its legacy of advocating for affordable housing. Using the Issues Mobilization Grant, the association conducted research for its “A Century of Opportunity” initiative launched in 2021. In partnership with Habitat for Humanity, CAR then embarked on an ambitious slate of legislation designed to support affordable housing and tear down regulatory barriers.

The first phase of the grant, an award of $183,871 in 2020, allowed CAR to fund statewide focus groups, divided into diverse filter groups. Using insights garnered from this research, CAR distilled its focus to four distinct areas, each of which inspired draft legislation:

  • The first legislation required the state to issue an annual report explaining how affordable housing dollars are being spent.
  • The second created a financial literacy requirement for high school students that included education on student loan debt and steps to entering homeownership.
  • The third created a credit-building pilot program that allows renters to have their rent payments reported to credit bureaus.
  • The fourth was the biggest bill in the package, dubbed the “menu of options” program: It allows local governments to apply for grants from the state to promote development of affordable housing through incentives, planning and zoning, and local housing toolkits and guides. These three areas were further divided into smaller subcategories encompassing a wide variety of areas, such as accessory dwelling units, reducing red tape, and making changes to land use codes. The result was a sweeping, $48 million bill package.

In conjunction with Habitat for Humanity, CAR was able to build a broad spectrum of supporters for the legislation, which included many local mayors and Colorado state Rep. Julie McCluskie. The second half of the Issues Mobilization Grant, in the amount of $115,000, was used to craft advocacy materials, such as mailers with informative infographics.

Advocacy Everywhere

CAR also used NAR’s Advocacy Everywhere program to send out a call for action urging members to contact their legislators about the bills. Once associations have already crafted an important piece of affordable housing legislation, the Advocacy Everywhere program can help gain key support. CFAs can be directed to REALTORS® or to consumers, and the service includes a CFA reporting dashboard that outlines progress on the campaign. Associations with an existing campaign, completed materials, and messaging can request an expedited launch. Meanwhile, those that need assistance in crafting their campaign can request services such as message development, audience targeting, graphic design, and creative development. Depending on the type of CFA, campaigns can run from two hours to several days.

In the end, all four bills were passed with bipartisan support—an effort that took many long hours and a dedication to affordable housing on the part of all involved. “This result will empower and uplift aspiring Colorado homeowners well into the future,” says CAR Vice President of Government Affairs Elizabeth Peetz. “It’s such a fitting way to honor a century of REALTOR® values, and we couldn’t have done it without the REALTOR® Party.”

Housing Opportunity Grants

Like CAR, the Richmond Association of REALTORS®, Va., has a long tradition of fighting for affordable housing. It created its own nonprofit, the Partnership for Housing Affordability, in 2004. In January 2020, RAR and PHA issued the Richmond Regional Housing Framework, which offered their blueprint of affordability initiatives for the next five years, supported in part by a $3,800 Housing Opportunity Grant from NAR. Housing Opportunity grants are available to state and local associations to support activities that address affordable housing issues in a community, such as education, forums, and legislative initiatives. Grants are awarded at three maximum levels—$1,500, $5,000, and $10,000—and can be used to support new or existing affordable housing efforts. Grants of $5,000 and above must involve working with at least one partner organization, such as a housing nonprofit or local government agency.

Among the programs RAR planned was an ambitious effort—a one-stop shop for homeownership in Virginia. Previously, housing information and services in the state were scattered across many platforms, and accessing these could be overwhelming for people seeking help.

What had initially been planned as a physical location for residents to access the state’s resources was stymied by the COVID-19 pandemic. The plan shifted to a phone service—the Housing Resource Line. A second 2020 Housing Opportunity Grant of $10,000 helped make the new service possible. In addition, RAR was able to secure funding from other community partners, including the Bob and Anna Lou Schaberg Foundation, the Community Foundation for a greater Richmond, and the Capital One Foundation.

HRL launched as a pilot program in September 2020 with one full- and one part-time staffer, and it now operates as a permanent help line with three full-time staff members and one part time. HRL will cost approximately $265,000 to operate in 2022, and funding for the line comes from public sources (37%), private and public foundations (32%), and corporate philanthropy (31%). HRL’s staff refers clients to more than 50 partners in the region and field between 400 and 800 calls a month.

Although RAR, which supports many affordable housing efforts through PHA, has had to struggle for years with “not in my backyard” mindsets, CEO Laura Lafayette contends that the association’s decades-long crusade is making great strides, thanks to the commitment and belief of its staff, members, and partners.

“We are making more progress than ever before,” says Lafayette. “We’ve elevated affordable housing to a top issue. And we’ve been able to make this nonpartisan. It’s about people, not party.”

For information on the Issues Mobilization program, contact Joe Maheady at 202-383-1006; for Advocacy Everywhere, contact Jim MacGregor at 202-383-1188; and for Housing Opportunity grants, contact Christine Windle at 202-383-1135.

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How Else Can You Support Affordability?

The National Association of REALTORS® supports the following acts and programs:

  • Housing Supply and Affordability Act, which would create a new Local Housing Policy Grant program administered by the Department of Housing and Urban Development.
  • Yes in My Backyard Act, which will tie receipt of Community Development Block Grant funds to pro-affordability policies.
  • Better Business Bureau’s Unlocking Possibilities Program, which will encourage localities to upgrade zoning codes.
  • Build More Housing Near Transit Act, which became law last year and will spur housing development near transit locations.
  • Efforts by Congress and the administration to reduce the cost of building materials.

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