| Speaker | Time | Text |
|---|---|---|
|
unidentified
|
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| A discussion now on housing affordability. | ||
| Our guest is Andrew Arendt of the National Low-Income Housing Coalition, a group founded back in 1974 to do what, Mr. Arend? | ||
|
unidentified
|
Oh, we do research policy and advocacy to ensure socially and racially equitable public policy to provide affordable housing for the lowest income renters, housing that is affordable and accessible. | |
| An organization that focuses on low-income people, how is the group funded? | ||
|
unidentified
|
The National Low-Income Housing Coalition is funded by private funding, so foundations, mostly foundations, and we're also a membership organization as well. | |
| And so we have more than 1,000 members from across the country, many of whom are other organizations working at the state and local level. | ||
| Recently, a report coming out late last month on the state of rental housing in the United States and the costs of rental housing. | ||
| What did you find in terms of how affordable it is to rent a home in the United States? | ||
|
unidentified
|
So, yeah, so unfortunately for many renters, it's not affordable. | |
| Out of Reach is a report that we publish every year. | ||
| And the primary question we try to answer is how much does a full-time worker have to earn in order to afford just a modest rental home in their community. | ||
| And we found this year that nationally across the country, on average, someone would have to earn more than $28 an hour to afford just even a modest one-bedroom apartment and more than $33 an hour for a two-bedroom apartment. | ||
| And we know that there's a lot of low-wage occupations that don't pay wages that are adequate for people to afford their housing. | ||
| Explain how you come up with those numbers and when you do it, when you say afford a modest home, what does that mean? | ||
| How much of their income are they spending under your metrics on housing? | ||
|
unidentified
|
Yeah, the federal standard that's used in many of our housing programs across the country is that renters should not be paying more than 30% of their income towards housing. | |
| And so we look at what's called the fair market rent for every county in the country, which is, it's a HUD estimate. | ||
| HUD produces, the Department of Housing and Urban Development produces, does these rent estimates and it's what a family moving today could expect to pay for just a modest apartment sort of in the bottom part of the rental market. | ||
| So this is typically modest older housing. | ||
| And then we calculate how much someone has to earn so they don't have to spend more than 30% of their income on that housing. | ||
| And you can find a map of what the coalition found in running those numbers on their website. | ||
| It's nlihc.org. | ||
| We'll show it for you to our viewers, but what did you find geographically? | ||
| What were some of the trends that you found as people take a look at the map? | ||
|
unidentified
|
Yeah, so I think, you know, if you look along the West Coast, you know, and people probably aren't going to be surprised by this, you'll see that, you know, rental costs are much higher in California. | |
| California and Hawaii have the largest affordability problem, or that's the most expensive rental housing, followed by Massachusetts and District of Columbia as well. | ||
| And in those states, on average, someone has to earn around $50 an hour to afford a two-bedroom apartment. | ||
| And you'll notice, of course, that there's a lot states that are less expensive than that. | ||
| And so, you know, at the most affordable states, you have Arkansas, North Dakota, that's more like $19 an hour. | ||
| But one thing we try to sort of emphasize is that regardless of that housing wage, when you compare states, there's an affordability problem that's national because even the states that look more affordable, the jobs there typically pay lower wages. | ||
| So the lowest wage workers in Arkansas face the same challenges as the lowest wage workers in California in some aspects. | ||
| Is there a red state-blue state divide when it comes to this map? | ||
| It does seem kind of familiar to recent electoral maps. | ||
| Are there state law reasons why it's more affordable in some states than others? | ||
|
unidentified
|
Well, in some of the states, like on the West Coast and on the East Coast, there's a greater demand for rental housing. | |
| And over, it started to, it's gotten better over the last couple of years, but for quite a while, just the supply of rental housing was not keeping up to demand. | ||
| And that was because of both growing demand as well as land use, local land use and zoning restrictions that make it difficult to develop rental housing. | ||
| And so, you know, those factors have combined to create high housing costs. | ||
| I would say, though, that there's similar issues even in the red states where on the map they look more affordable. | ||
| But again, when you look at what people's wages are in those states, there still is an affordability problem. | ||
| We're focusing on housing affordability. | ||
| And our guest this morning is Andrew Arrend of the National Low Income Housing Coalition. | ||
| If you want to call on phone lines, split a bit differently. | ||
| If you are a homeowner, 202748-8000. | ||
| If you're a renter, 202-748-8001. | ||
| All others, 202-748-8002. | ||
| We'll also look for your texts, 202-748-8003. | ||
| It's a report on the costs, the affordability of a modest rental apartment, but it's also a report that each year gives recommendations. | ||
| What are you recommending this year in terms of alleviating this housing affordability crisis? | ||
|
unidentified
|
Yeah, so it's a very complex problem. | |
| I mean, when there's a significant shortage of affordable rental housing, particularly for low-wage workers and extremely low-income families. | ||
| And it's a complex problem because there's so many housing markets and different housing markets differ from one another. | ||
| But, you know, generally speaking, we need more federal investment in our affordable housing programs. | ||
| And so that includes housing choice vouchers, which is a large program that provides eligible low-income renters with a voucher to try to afford housing in the private market. | ||
| But we also need capital investments in what we call project-based rental assistance, which goes to specific properties to keep them affordable for low-income renters. | ||
| We have a capital backlog in public housing, which is a very important source of affordable housing for the lowest income renters. | ||
| But there's been years of disinvestment and we need to reinvest in that housing as well. | ||
| So that's all, those are federal resources we need. | ||
| And then at the state and local level, there's a rule for local governments and state governments in that at the local level, there's a lot of land use and zoning laws and other restrictions that make it hard for developers to produce affordable rental housing. | ||
| Well, any rental housing would be. | ||
| What's an example of that? | ||
|
unidentified
|
There's a lot of single-family zoning that just that just prohibits multi-family, so apartment developments or even small apartment buildings, which a lot of the affordable housing stock for the lowest income renters is in those types of properties. | |
| And they're very difficult to produce these days. | ||
| If I'm a home builder and there's no specific zoning law that says what I have to do, why would I build a low-income project versus a million-dollar single-family home project? | ||
| What would be the financial reason for me to do that? | ||
|
unidentified
|
Well, and that's the issue. | |
| There is no reason unless there are other incentives and subsidies involved. | ||
| And so you cannot, if you're a developer, you cannot go out and produce rental housing or even maintain existing rental housing in some cases and charge a rent that's affordable to very low-income and extremely low-income renters because you also have bills to pay, right? | ||
| You have financing costs, you have maintenance costs. | ||
| If it's new housing, you have construction costs, of course. | ||
| And what extremely low-income renters can afford to pay in rent is not, it's just not enough. | ||
| And so as a private developer, you would not develop that housing unless you have some type of public subsidies involved. | ||
| You talk about vouchers for eligible renters. | ||
| Generally, what are the eligibility levels for someone to be able to access this federal program that you're talking about? | ||
|
unidentified
|
Yeah, so the Housing Choice Voucher Program is the largest subsidized housing program that HUD manages and operates. | |
| And to be eligible, your income has to be below 80% of your area's median income. | ||
| It gives priority, though, to extremely low-income renters. | ||
| And HUD has a definition of extremely low-income, which are renters whose household income is below either the poverty line or 30% of the area's median income. | ||
| And so, generally speaking, those are renters whose income is below the poverty line. | ||
| And, you know, there's no housing market that adequately serves them. | ||
| What do we know about waste, fraud, and abuse in these kinds of programs? | ||
|
unidentified
|
Yeah, so there has not been a lot of evidence of fraud or abuse. | |
| You know, we have, you know, programs have been very concerned about that. | ||
| And it does, I mean, it does happen, but it seems as though it happens on a very small scale relative to the number of vouchers that are out there. | ||
| And you see it less with the voucher program, I would say, because there's a lot of documentation requirements. | ||
| And in order to apply and be eligible, you have to produce a lot of documentation. | ||
| And I think they do a good job at weeding out fraud. | ||
| And it has not really risen to a level that is a concern. | ||
| And it probably is very, very minimal, if at all. | ||
| For the program like the voucher program, how much do we spend on that a year in terms of tax dollars? | ||
| And is that something that, as the Trump administration has looked around the federal government to trim costs spending? | ||
| Is that a program that has gained attention? | ||
|
unidentified
|
It has. | |
| So the voucher program itself is about $35 to $36 billion a year, is usually what's appropriated. | ||
| That's what was appropriated last year, $35 billion. | ||
| The Trump administration this year in their budget proposed eliminating that program and eliminating four other major HUD-assisted housing programs, so project-based rental assistance, public housing, and a couple of other smaller programs, and lumped them all together to be a block grant to the states for the states to decide how to spend that money. | ||
| Is that a good idea? | ||
| No, for two reasons. | ||
| One is not only did they propose merging those five programs and just giving all the money to the states, but they cut the amount of money significantly. | ||
| And so last year the voucher program was about, I said, $35 billion was appropriated. | ||
| This year in Trump's proposal, he proposed $35 billion in block grant money to replace all five programs. | ||
| So less money or about equal money that just the voucher program takes, letting out public housing, project-based rental assistance, and the other programs that are very important. | ||
| In terms of getting this to the states, I imagine, though, regardless of the arguments over how much and what it should be, is that states are closer to the people who would be living in these houses, that they may be better able to target this money than a federal bureaucracy here in D.C. trying to manage this in communities around the country. | ||
| What do you say to that? | ||
|
unidentified
|
So I would say, you know, it depends on the program. | |
| In terms of the Housing Choice Voucher Program, it targets the lowest income, extremely low-income renters. | ||
| And, you know, we need to ensure that that money is actually targeted to extremely low-income renters. | ||
| And one way to do that is to have it be a federal program. | ||
| And it's expensive, admittedly, to provide these subsidies for extremely low-income renters, but it's a lot cheaper to do that than to have these renters to have them not be able to afford their housing, lose their housing, and there's a lot of costs associated with that. | ||
| So, you know, there are other programs that are more like block grant programs to the states that provide more flexibility. | ||
| And some states decide, you know, they split it between rental housing and home ownership housing, and they serve different income groups. | ||
| But, you know, there's lots of times there's pushback on serving extremely low-income renters. | ||
| And so, you know, I think it's important that we keep that program intact and operate at a federal level because every community, like I said, and what we point out in our reports is there's no community that has an adequate supply for renters with those lowest incomes. | ||
| Andrew Arendt is our guest of the National Low Income Housing Coalition, a senior vice president there for research, taking your phone calls. | ||
| And as we said, we split the lines by homeowners, renters, and all others. | ||
| We'll start on the line for renters. | ||
| This is Randall, Chevy Chase, Maryland. | ||
| Good morning. | ||
|
unidentified
|
Hi, good morning. | |
| Thank you for doing this show. | ||
| I live in Chevy Chase, Maryland, which most listeners of the MV at least would know is a very expensive area to live in. | ||
| I have a Section 8 housing voucher, which is the only way I could afford to live in this area or possibly anywhere in the country. | ||
| I just wanted to make a couple of quick points. | ||
| One is that the federal government is tightening up rules for the Section 8 program. | ||
| For example, there's a new asset test, which did not, there wasn't before. | ||
| I'm not sure if it's taken effect yet. | ||
| I think it hasn't, but it's coming soon. | ||
| And another point I'd like to make is that there's a lot of talk, at least in this local area, about creating more housing. | ||
| But unfortunately, and this is mostly on the state level and the local county level, the housing market is controlled by developers, and the housing that's being built is mostly, from what I can see, luxury housing, luxury condos that are, for example, in Chevy Chase that are going for $1 to $2 million each. | ||
| Housing along a new transportation route, the Purple Line, there would be stops there along the metro line, luxury high-end rental housing. | ||
| So I don't really see much emphasis on low-income housing. | ||
| They usually have to set aside, I think it's 15% of these new housing complexes for what they call moderately priced housing, which is something that people like myself who are living on a fixed income could not possibly afford. | ||
| And one last point I'd like to make is that if you look at the inflation rate, we always talk about the CPI. | ||
| I think it's pretty obvious to most people that the measures of inflation are grossly inaccurate or wildly underestimate the actual cost of living. | ||
| And one of the ways that happens is the cost of housing is not properly factored into housing. | ||
| I mean, the overall inflation rate is like, I think it's 2.7%, but there's no way that housing or most expenses people actually have only has gone up 2.7%. | ||
| You bring up a lot of topics. | ||
| Let me give Andrew Arend a chance to respond. | ||
|
unidentified
|
Yeah. | |
| So, Randall, that's a lot of important issues that he points out and a lot of important topics. | ||
| And I'm going to address some of them. | ||
| And, you know, I will say, so the Section 8 voucher program is now called the Housing Choice Voucher Program. | ||
| So that's the program we were just talking about. | ||
| And, you know, for renters who receive that voucher, if they were to lose that voucher, there really are no housing options. | ||
| You know, in a place like, definitely in a place like Chevy Chase, Maryland, and in most other communities across the country, without that voucher, it's very hard to find rental housing. | ||
| And just explain how that works. | ||
| Is the money given directly to the renter and then they pay the landlord or does the federal government pay the landlord? | ||
| How does it work? | ||
|
unidentified
|
So the way the voucher program work is the tenant will typically pay about 30% of their income towards rent. | |
| So that's their contribution to the rent, to the landlord. | ||
| And then the voucher will cover the rest of the rent up to a certain standard, which is called a fair market rent. | ||
| So it's a fairly modest rent that's allowed. | ||
| And that's how that works. | ||
| And so it's a mix between what the tenant can afford and then the subsidy pays the rest. | ||
| And, you know, the thing about the voucher program is, you know, Randall is one of the, unfortunately, well, fortunately for him, he's one of the lucky few. | ||
| I mean, the voucher program kind of works like a lottery. | ||
| We don't invest in these programs enough. | ||
| And so only about 25% of people who qualify for assistance actually receive it. | ||
| And so in most places, there's a waiting list. | ||
| You can apply, but you're put on a waiting list. | ||
| And in some places, you can't even apply. | ||
| So it's great that he has one. | ||
| You know, and every year, you know, many years, there's threats to that program and funding cuts. | ||
| But it's such an important program. | ||
| Randall's in Chevy Chase. | ||
| I'm coming to your map. | ||
| And you can zoom into Maryland and specifically Chevy Chase. | ||
| You have this broken down by zip code. | ||
| Explain what $52.50 means on your map, the area where Randall lives. | ||
|
unidentified
|
Yeah, so what that means is that for a two-bedroom apartment, a full-time worker needs to earn about $52 an hour an hour so they don't spend more than 30% of their income on their rent. | |
| And that is definitely high. | ||
| I mean, that is definitely on the higher end of the housing wages or on the rental costs that we see. | ||
| And then the other thing that Randall points out that you and I were talking about, and he's making the important point too, which is, you know, developers are producing the higher cost, more luxury housing because it's expensive to develop housing, and that's where they can recoup their investment. | ||
| You know, you don't recoup it by developing housing and having it be low rent for $900 or $1,000 a month. | ||
| And so, without some form of public subsidy, developers are not going to produce it. | ||
| George is a renter in Douglas, Georgia. | ||
| Good morning. | ||
|
unidentified
|
Good morning. | |
| I have a question of if you're in low-income housing and it's based on the amount of your income, then could you talk something about that? | ||
| Yeah, so the way these programs work, I mean, we have a variety of programs. | ||
| One's the voucher program, public housing, project-based rental assistance. | ||
| We also have through Treasury the low-income housing tax credit program, and that is a subsidy to developers. | ||
| So, they will develop housing, rental housing that's more affordable. | ||
| And the way these programs work is you have to be income qualified. | ||
| And for some of the programs, the income qualification is 80% of your area's median income. | ||
| For the tax credit program, not always, but in many cases, it's either 50% of your area median income or 60% of your area median income. | ||
| And so, you have to be income eligible to be considered for those, for that housing. | ||
| And then, the way the voucher program work, public housing and project-based rental assistance work is that if you do receive the assistance, you typically contribute 30% of your income towards the rent, and then the subsidy covers the rest. | ||
| The tax credit program works a little bit differently, and that rents are not tied to your income. | ||
| They're tied to the area's income. | ||
| And so, there's a maximum rent that developers can charge. | ||
| Are there incentives to try to move people up and off these programs? | ||
|
unidentified
|
So, I think incentives from the programs themselves or insurance. | |
| I mean, so in public housing and vouchers, there are some family sufficiency programs where money can go into part of their payment can go into an escrow account so they can, over time, build up some resources to become financially sufficient, self-sufficient. | ||
| And so, there are incentives in that way. | ||
| Richard is a homeowner in Augusta, Georgia. | ||
| Good morning. | ||
| You are next. | ||
|
unidentified
|
Good morning. | |
| My concern is whether or not investment groups and also developers are going to drive people out of being able to rent apartment complexes because I've seen the prices here in Augusta, Georgia go up high to where people's income can't afford to rent the apartment complexes. | ||
| And also, when I got to buy my house in 1999, I got it at a low interest rate. | ||
| Do you think if the feds would specify low interest rate for home buying would help? | ||
| And then the labor that the developers depend on are mostly Latino workers, which if the government keeps going after them, that's going to drive the price of the building up even more so. | ||
| Housing in this country is very tight. | ||
| And like the gentleman from Virginia, you talk about the wages earning. | ||
| Back then, I was making $25 an hour, $19.99. | ||
| And he's talking about up there in the Northeast Virginia, $57 an hour. | ||
| Companies don't want to pay that because they want to, investment groups, they want to make sure they keep their profits higher along with the developers. | ||
| They're building complexes here in Augusta now. | ||
| Houses are going to be $250,000, $300,000. | ||
| Who can afford that? | ||
| That's Richard in Augusta, where you'd have to make $22.69 an hour to be able to afford a moderate two-bedroom rental and not pay more than 30% of your salary for that rental. | ||
| Go ahead. | ||
|
unidentified
|
Yeah, so Richard makes some good points that I just want to highlight a bit. | |
| And one is that, you know, there have been labor shortages in the construction industry for quite some time in some areas of the country, and that has impacted the cost of the development of rental housing. | ||
| And so that labor shortage has definitely been an issue and could grow. | ||
| The other thing is, he mentioned about low interest rates for home buyers. | ||
| You know, there has been also over time it has become harder for moderate income renters to become homeowners because of the cost of homes in general has gone up significantly relative to incomes. | ||
| And especially recently, we've seen the increase in interest rates, and so it's become harder to buy homes. | ||
| And so that has kept the demand for rental housing higher. | ||
| And there's more competition than for rental housing. | ||
| And so, of course, that increases rental housing prices, squeezing out even further the lowest income renters. | ||
| And so that has also been a problem that has existed for quite a while. | ||
| And then the other thing I'll mention is about investors, there has been concern about institutions investing in multifamily housing, which is not necessarily itself a bad thing. | ||
| But a lot of the housing that extremely low-income renters rely on is older housing. | ||
| It's very old housing. | ||
| And we see it flipped out of the affordable housing stock. | ||
| It's purchased, it's rehabbed, it's developed into more expensive housing, and it is no longer affordable. | ||
| And so we have, you know, it's been well documented that over the last few decades, we have consistently lost just low-cost rental housing in the private market. | ||
| You know, so subsidies haven't kept up with the need, but even the private market, we've seen a loss of low-cost units over time. | ||
| It's head to Durham, North Carolina, where you'd have to make $31.54 an hour to afford a modest two-bedroom rental. | ||
| Brian's in Durham. | ||
| Good morning. | ||
|
unidentified
|
Thank you so much for taking my call. | |
| I am a mortgage loan officer with a bank here in North Carolina. | ||
| I deal with CRA, which is Community Redevelopment Act. | ||
| The biggest challenge that we have, because we do work with a ton of Section 8 borrowers, is the down payment. | ||
| Fortunately, we have several partners, municipalities, that do have down payment assistance monies. | ||
| So we can work with a first-time homebuyer, first-time homebuyer, which has been amazing because a lot of these homebuyers have never thought that they could purchase a home. | ||
| And by utilizing down payment assistance funds, and also you mentioned vouchers, we also use vouchers to help with that income source. | ||
| This allows them to get into a home. | ||
| We have programs here that can work with individuals up to $145,000 of down payment assistance. | ||
| $145,000. | ||
| So that does help an individual that has never purchased a home get to the point where they can own their own home and afford the monthly payment because of the down payment assistance. | ||
| I do know that currently one of the things I was hoping to see was the bill, the American Grain, that Kamala spoke about in her bid for presidency. | ||
| And that was the low-income housing tax credit. | ||
| Over $40 billion was thought to be funneled into a fund to help homebuyers that never purchased before. | ||
| Her goal was to get 3 million new homeowners into homes within her presidency. | ||
| My question is, have you heard anything that the new administration is doing for affordable housing? | ||
| And have they talked about implementing funds or funds available for down payment assistance to help these affordable home buyers? | ||
| Brian, thanks for the questions. | ||
|
unidentified
|
Yeah, thanks. | |
| So I'll say, you know, down payment assistance is really important. | ||
| So, you know, if you're a low to moderate income household, I mean, he's absolutely right. | ||
| One of the most difficult things is accumulating resources so you have a down payment. | ||
| And so down payment assistance is absolutely necessary. | ||
| In some cases, housing counseling. | ||
| So how do you develop, you know, how do you save your resources to make a down payment? | ||
| And then how do you get a mortgage and go through that process is important. | ||
| And then even once you're a owner, Brian's right in that, in that for some households, this really works and it's very helpful in terms of building wealth. | ||
| But there's also households who then have an unexpected maintenance issue of their home and they don't have the resources to fix it. | ||
| Right. | ||
| And so I would argue there also needs to be repair dollars for those households that just don't have the resources. | ||
| If something does go wrong, they don't have the resources to fix it. | ||
| And there are studies that show that for extremely low income renters, even if they go through housing counseling and then purchase a home, oftentimes in the long run, they become renters again because they couldn't afford the maintenance of the home. | ||
| But again, that's just for the lowest income renters. | ||
| For low to moderate income renters, homeownership programs are very important and they should receive more funding. | ||
| I'm not aware of what the proposals from the current administration have been. | ||
| I do know that there's a bipartisan bill called the Road Act, the Renewing Opportunity American Dream Act that's bipartisan. | ||
| It was just introduced last week by Republican Senator Tim Scott and Democrat Elizabeth Warren. | ||
| It's a big, there's a lot of things in that bill to reform some of our programs, but doesn't provide more money for the rental programs, but there are reforms in it. | ||
| I think one of the things it talks about in that bill is how to make it easier for people to get mortgages for moderately priced homes. | ||
| Sometimes people just need a smaller mortgage to afford a smaller home and it's difficult to get a smaller mortgage. | ||
| And so I think there is a lot of discussion about how to make it easier for low to moderate income households to get a mortgage. | ||
| But I don't know, what I'm not aware of is how much money has been proposed, any new money to do it. | ||
| And as viewers tune into these discussions, so the caller used Section 8 program, once again, that's the same thing as this rental voucher program that we've been talking about. | ||
|
unidentified
|
Sounds like it to me, I would assume. | |
| I mean, because terminology has changed a bit over time. | ||
| This is kind of like vouchers. | ||
| Yeah, yes. | ||
| Gotcha. | ||
|
unidentified
|
And that's often still referred to as Section 8 because a long time it officially was called Section 8, but then for the voucher program, the name changed a while ago. | |
| Section 8, we still say Section 8. | ||
| Section 8 of what? | ||
| Why was it called? | ||
|
unidentified
|
Of the Housing Act. | |
| I forget the year, but the 19, I'm guessing 68. | ||
| But it was a housing act and section 8 of the housing act created the program. | ||
| To Amarillo, Texas, where it would cost $19.42 an hour in hourly wages to afford a modest two-bedroom rental. | ||
| Robert is a renter. | ||
| Go ahead. | ||
|
unidentified
|
Hello, sir. | |
| The first thing I'd like to say is you are performing a much-needed task that is easily solvable. | ||
| And I will tell you how in a moment. | ||
| First, I would like to refer you to the available articles by Paula Pershas in the New York Times or Rachel Wolf in the Wall Street Journal on the forever renter, which I am. | ||
| Unfortunately, the amount of intellectual dishonesty in the media and on C-SPAN presents the problem in an inaccurate way. | ||
| So let me refer you back to the most successful, I won't say successful, I should say accurate, accurate political program in history, which was the 2010 Jimmy McMillan founder of the Rent is Too Damn High in New York City. | ||
| At that time, the rent was $602, and 2 million people have rent control in New York City. | ||
|
unidentified
|
And of course, you know, it's $3,600 now. | |
| And although he was the most accurate political platform in history, he had the wrong approach. | ||
| And the approach is to tax massive amounts of luxury housing in the United States. | ||
| And if you read the Friday section of the Wall Street Journal, you'll see why. | ||
| We have to put the luxury real estate market out of business. | ||
| Thank you. | ||
| That's Robert and Amarillo. | ||
|
unidentified
|
So I think that, you know, when we talk about luxury rental housing, you know, many times, you know, people are equating that with new development. | |
| And I will say that adding to the supply of the rental housing stock is important. | ||
| You know, in many markets across the country, there's just not enough housing, right? | ||
| And, you know, one way you can start, obviously, start to get at that is to develop more housing, obviously. | ||
| So, you know, I don't think that, you know, it's necessarily a bad thing. | ||
| I think, though, that where some of that thinking goes a little bit astray is that just the development of more housing is not going to solve the affordable issue for very low-income and extremely low-income renters. | ||
| Because I would say, as I was saying before, like the market just cannot really serve them because what they can afford to pay in rent doesn't allow owners to pay the bills. | ||
| And so I do think there needs to be a mix of housing development. | ||
| And so, you know, develop luxury housing if there's demand for it, develop moderately priced housing. | ||
| And then also we need to develop really low-cost rental housing, affordable rental housing for the lowest income renters. | ||
| And subsidies are needed to do that. | ||
| Robert Namarillo was a Wall Street Journal reader. | ||
| He mentioned Rachel Wolfe, one of their main economics reporters. | ||
| She just published about five minutes ago a story about the jobs report that was just released at 8.30 Eastern Time by the Bureau of Labor Statistics. | ||
| U.S. hiring slowed in July with 73,000 new jobs added for the month. | ||
| When it comes to a jobs report, what do you pay attention to in your line of work? | ||
|
unidentified
|
So we often pay attention to what those jobs are paying and watching whether, you know, if we see increases in wages, are those increases keeping up in the increases that we see in rent? | |
| And so we'll often watch that. | ||
| And then of course, the general unemployment, particularly among lower wage workers and what that is looking like. | ||
| 4.2% is the unemployment rate changed little since July. | ||
| I'll look through the survey data to try to find those hourly wage numbers. | ||
| You didn't give me enough time there. | ||
| Brent, though, is waiting in Washington. | ||
| Good morning. | ||
| Thanks for calling. | ||
|
unidentified
|
Hi. | |
| Hi. | ||
| Thank you for taking my call. | ||
| I had more of a comment than a question. | ||
| As far as rent, I see it as a lot of it's just pure greed. | ||
| You know, too many houses, too many rental houses are owned by large conglomerates like investment firms or tech bros or hedge funds managers. | ||
| And all they do is buy up all these large swaths of housing, like back in the 2008 crisis, they bought up a lot of the houses around Las Vegas. | ||
| And all they do is constantly raise the rent every six months, every three months, whatever they can get away with. | ||
| They don't even see people as people anymore. | ||
| They're nothing but an algorithm. | ||
| So then that puts people out in the streets. | ||
| And then people look at the people in the street to say, oh, well, look, they must have a drug problem or they must have this or that. | ||
| It's their fault that they're in the street. | ||
| They never consider that they are in the street because they have been basically pushed into the street because they can no longer afford housing. | ||
| And that includes senior citizens. | ||
| So to me, it's not like we need more cheap rentals. | ||
| We need more cheap, affordable housing that people can buy. | ||
| And I'm not talking like 5,000 square feet houses, 1,500, 2,000 square foot houses like in the 50s and 60s. | ||
| People were able to live in the house just like that just fine. | ||
| So like I said, all I can see is the problem is pure greed. | ||
| Yeah, I would say we do need more moderately priced houses for people to enter home ownership and leave the rental market. | ||
| And that would relieve some pressures in the rental market. | ||
| You know, the caller mentioned something that's interesting that I want to highlight, which is he mentioned about algorithms and large companies. | ||
| And there has been growing concern about the use of technology and how property managers are using technology and using algorithms to set rent. | ||
| They will look at the rents of surrounding properties and they'll track this algorithm and figure out like, okay, what's the maximum they can charge? | ||
| You know, they'll even put up with some vacancies in order to charge the higher rents. | ||
| They've discovered that there's more money to be made that way. | ||
| And, you know, there has been a lawsuit against one of those companies that basically manages data for property managers. | ||
| And they produce these estimates about what property managers should charge for rent. | ||
| And in some markets, they serve so many of the large property managers that the argument is that they are rent-setting. | ||
| It's a monopoly and they are setting rents, like colluding to set rents across these management companies. | ||
| And there's a lawsuit against them about that. | ||
| So there is a concern about algorithms and how companies are using that to set rents and even screenings, screening people out. | ||
| Is it fair to screen people out based on A variety of things like background checks, credit history, criminal history, and other things. | ||
| And then people can be rejected from not being given an apartment, but then they're not necessarily told why they're being rejected, right? | ||
| And so they pay an application fee, they get rejected. | ||
| They go to another property, they pay an application fee, they get rejected. | ||
| And no one necessarily is informing them why. | ||
| And that's a problem as well. | ||
| On those hourly earnings, got those numbers for you from the jobs report that just came out 13 minutes ago now. | ||
| Average hourly earnings for all employees on private non-farm payrolls rose by 12 cents or 0.3% to $36.44 in July. | ||
| Over the past 12 months, average hourly earnings have increased 3.9%. | ||
| Your reaction? | ||
|
unidentified
|
Oh, what was the 3%? | |
| I'm sorry, what was the 3.9%? | ||
| Over the past 12 months, average hourly earnings have increased by 3.9%. | ||
|
unidentified
|
Yeah, my reaction to that is, so we, I mean, that's not a bad thing. | |
| Obviously, it's a good thing. | ||
| You know, we would be interested in knowing what has been the increase in rents over that time. | ||
| You know, right now, actually, affordability has not, it's not gotten worse. | ||
| In many cases, it hasn't really got in a lot better. | ||
| But, you know, a few years ago, we saw significant increases in rents with the huge rates of inflation that we saw in the housing market. | ||
| That has leveled off. | ||
| And in some markets, we've even seen now a small decline in rents. | ||
| But, you know, when we say small decline, it's not even close to the increases we saw a few years ago. | ||
| So they're still really high. | ||
| So, you know, in some cases, workers are, you know, it is becoming somewhat more affordable for the moderate income or typical worker. | ||
| But we haven't really seen the same for low-wage workers. | ||
| One last call on that line for renters. | ||
| I want to get Dylan, who's been waiting in Austin, Texas for a while. | ||
| Dylan, go ahead. | ||
|
unidentified
|
Hi, good morning. | |
| Thank you for taking my call. | ||
| Big fan of C-SPAN. | ||
| And as a young nonprofit professional, I have always been a big fan of the National Low-Income Housing Coalition. | ||
| Most of my career has been spent in homeless services with a particular focus on older adults and the growing rate of older adults experiencing homelessness. | ||
| I recently joined a nonprofit affordable housing provider. | ||
| We have nearly 500 apartments. | ||
| Some of those apartments are funded by HUD with project-based vouchers. | ||
| But predominantly our apartments are funded through the Low Income Housing Tax Credit Program. | ||
| All of these apartments are for older adults, 55 and older. | ||
| It's just been a real eye-opener to see how precarious this business is, the business of managing affordable housing, providing affordable housing, without there being additional support beyond the affordable rent rates. | ||
| The average income of our tenants, our residents, is basically a social security check. | ||
| And I'm just wondering if Andrew or any of the work at the National Low Income Housing Coalition speaks to some of the distress that nonprofit affordable housing providers face without additional support. | ||
| Thank you. | ||
| Dylan, thanks for the call. | ||
| I'll give you the final minute. | ||
|
unidentified
|
Thank you. | |
| Yeah, that's an important point. | ||
| You know, affordable housing providers, you know, it's not easy. | ||
| It's not easy because they need to keep their rents low. | ||
| At the same time, in some programs, you know, funding is often unpredictable because it's part of the appropriations process. | ||
| You know, the caller referred to LITEC and also projects-based vouchers, which are like housing choice vouchers, but they're tied to a specific property. | ||
| And it gets complicated because the tax credit program is very important. | ||
| You know, it really helps produce a lot, millions over the years of affordable rental housing units. | ||
| But it doesn't serve the lowest income renters. | ||
| It doesn't really serve people who are at immediate risk of homelessness because rents are set here. | ||
| I mean, there's a max rent. | ||
| That's what people charge. | ||
| That's oftentimes what the owners will charge. | ||
| And it's not tied to the person's income. | ||
| So if you're extremely low, if you're an extremely low-income senior, living just on Social Security, a very low Social Security amount, you probably can't afford to live in a LITAC, a tax credit property, unless you have additional support. | ||
| In this case, it sounds like that support are these project-based vouchers. | ||
| But then you're in a situation where you have to manage the vouchers as well as the tax credit requirements. | ||
| And usually there's other funding streams involved too to cover all the costs of these properties, and it gets very, very complicated. | ||
| And then on top of that, some of these programs are appropriated. | ||
| And so, you know, there's usually some type of funding threat of your funding, at least part of your funding, being threatened every year. | ||
| So. | ||
| Andrew Arend is the Vice President for Research at the National Low Income Housing Coalition. | ||
| You can find them online at nlihc.org. | ||
| And we appreciate your time this morning. | ||
|
unidentified
|
Great. | |
| Thank you. | ||
| I really enjoyed being here. | ||
| And past president. | ||
| Why are you doing this? | ||
| This is outrageous. | ||
| This is a kangaroo quarter. | ||
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