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Affordable Housing Solutions: A Comprehensive Guide for Aspiring Homeowners

Homebuyer Education
Affordable Housing Solutions: A Comprehensive Guide for Aspiring Homeowners

The Rent is Too Damn High

Years ago, I was a renter. It was fine – every year, my rent went up, but I also wasn’t responsible for major plumbing or any complicated shit like that. Then, my husband Bear suggested we really needed to stop renting and buy a place. Which sounded super responsible and adult, and I wanted no part of it. We argued. It was very romantic.

Around the same time, there was this politician who ran for mayor of New York City. His name was Jimmy McMillan, and he started a brand new political party – The Rent Is Too Damn High Party. His slogan? “The rent is too damn high.” You gotta admire the straightforward simplicity. And as our rent was raised yet again, I thought, “he’s right. The rent is too damn high.” And it’s only getting higher.

So Bear and I bought a house in the fall of 2014 for $290k – a classic 1920s bungalow, two bedrooms, one bathroom, a yard, detached garage, unfinished basement, in a major American city. Eight years later, that house is now worth $740k. Did we build an addition? Gut it and renovate? Install all new appliances and cabinetry? Hardwood floors? A perfect lawn of green sod? Nope. Aside from minor DIY renovations, hailstorm repairs, and necessary maintenance, the house is largely as it was when we moved in. All we had to do to gain almost half a million dollars in equity was to just fucking sit on it.

The Affordable Housing Crisis

In recent years, the cost of buying a home in our city has exploded. So it’s a good thing the rent has stayed reasonably affordable, right? Right? Wrong.

When Kitty and I first started Bitches Get Riches, we planned to write a comprehensive guide for buying your first home. It’s a dauntingly big task, so we put it off because we are nothing if not lazy, procrastinatory neer-do-wells. But now, we’ve scrapped the idea altogether, despite multiple requests. The housing market has changed so much since Kitty and I bought our homes that any wisdom we have to impart would be frighteningly out of date and out of touch – two things these elder millennials have vowed never to be.

“Save up a 20% down payment,” said we, when that was somewhere south of $50,000. “Budget to spend less than a third of your income on your mortgage every year,” said we, when that was less than $20,000. These numbers are now as laughable as a Baby Boomer telling Gen Z they can easily pay for college if they just get a summer job. Yeah, we’re going to need to recalibrate our home-buying advice for far more complicated times.

The Human Cost of the Affordable Housing Crisis

Set aside my anecdotal evidence about the affordability of rent and mortgages. The United States is currently in an affordable housing crisis. Enjoy these depressing stats courtesy of the Pew Research Center:

Indicator Then (10 years ago) Now
Percentage of 25-year-olds who can’t afford rent 28% 37%
Percentage of income spent on rent by low-income households 40% 50%
Median home value $173,000 $325,000
Median household income $51,100 $67,500

In other words, it is now significantly harder for a 25-year-old American to make rent than it was for me ten years ago when I was that age. And if they’re struggling to make rent, it’s exponentially harder for them to save up a down payment to buy a home.

Basic white dude voice: “In Maslow’s hierarchy of needs, physiological needs like shelter form the base of the pyramid. Stable housing, secure shelter – it’s critical to have these on lock before we can progress to other more advanced pursuits. In other words, if you’re constantly worried about getting evicted, you can’t really worry about anything else.”

According to the National Low Income Housing Coalition, housing is the key to reversing a lot of terrible systemic problems. But let’s say you don’t give a damn about the quality of life of The Poors. Much like an increased minimum wage, greater access to affordable housing would be fantastic for the country’s precious economy too.

If you want to bum yourself out about the human cost of the affordable housing crisis, read Matthew Desmond’s Evicted: Poverty and Profit in the American City. This sociologist embedded himself among the chronically evicted in Milwaukee and put a human face on housing instability. And if you want to bum yourself out about the numerical losses of the affordable housing crisis, read the work of economist Raj Chetty, who showed that a child’s literal zip code could determine their future socioeconomic mobility. That’s right, stable housing in a higher-income neighborhood affects a kid’s likelihood of attending college and attaining a high-income job. And for those keeping score, yes, Raj Chetty is another data point in my noted attraction to progressive economists. Talk applied microeconomics to me, zaddy.

Homeownership as a Tool of Oppression

Listen, I didn’t want to ruin your whole day with the affordable housing crisis. It’s not like I gain some kind of grotesque satisfaction by dragging you all kicking and screaming into my personal hell of anarcho-progressivist rage. I have our extremely depressing articles on reproductive rights for that. But when it comes to the affordable housing crisis, we kind of only have ourselves to blame. And by “ourselves,” I mean homeowners – see above – and three hundred years of cultural indoctrination.

From Day 1 of our country, the Founding Fathers made sure everyone could vote. Wait, what’s that? Producer whispers in ear Actually, folks, I’ve just been informed that from Day 1, the only people who could legally vote were land-owning white men. Renters of all genders and races could suck it up and stop being so poor if they wanted to vote.

Homeownership as a marker of prestige and worthiness is a time-honored tradition in the United States. Literally discriminating against people who can’t afford a home is as American as medical bankruptcy, foreign-made assault rifles, and a quarter-pounder with cheese. The rationale has been that owning a home means you have a vested interest in the community. If you own a home, you have something to lose. You’re “bought in.” It thereby followed that homeownership became the central pillar of the American Dream. It was a marker of economic stability, community involvement, respectability, and generational wealth. Which is just one reason why historically, discrimination against minorities in the housing market has run rampant through things like redlining and contract buying.

Homeownership: a useful tool of societal control and oppression. Adam Conover of the Factually podcast did a great interview with Brookings Senior Fellow Jenny Schuetz on why housing is so expensive. Allow me to completely butcher her main point: We’ve inappropriately redefined the purpose of owning a home. We encourage homeownership not simply as a get-out-of-rent-free card or permanent Maslowian shelter, but as a financial investment.

How many times on this very blog have we talked about owning a home as a means of establishing wealth? How many times have we talked about it not just as a way to save money on rent, but as an appreciating asset and future investment? And way smarter people than us regularly encourage folks to invest in real estate through rental properties. Theoretically, none of this advice is bad or wrong. Don’t hate the player, hate the game, etc. But the concept of a home as an investment means that homeowners are deeply… um… invested in the value of their property. They need to keep housing expensive so that their investment in homeownership will eventually pay off.

And the local governments that control zoning? That approve things like the construction of affordable housing, multifamily dwellings, ADUs for extended family? They’re primarily staffed and lobbied by the very same homeowners interested in increasing their homes’ values by keeping housing expensive. Renters and aspiring homeowners don’t have nearly so powerful a voice in the decisions keeping housing unaffordable.

I’m not here to blame anyone beyond the vague concept of a system built long before we were born. After all, I own a house, and if I sold it today, it would make me very, very rich. The solution is obviously for everyone to learn to love bunk-bedding in a studio apartment well into their fifties. But if you think people deserve things like privacy, a family, secure shelter, and the chance to build intergenerational wealth through property ownership, I guess there are a few other things we can do to solve the affordable housing crisis.

Solutions to the Affordable Housing Crisis

There’s a lot we can do within local, state, and federal governments to ease the affordable housing crisis. The Fair Housing Act was a good first step in curbing discrimination in housing, but affordable housing activists are currently advocating for the following legal measures:

  • Require developers to set aside a certain percentage of units for affordable housing.
  • Restrict the use of short-term rental platforms like Airbnb to preserve the supply of long-term rental housing.
  • Provide down payment assistance and tax credits for first-time homebuyers.
  • Increase funding for public housing, rental assistance, and housing voucher programs.
  • Reform zoning and land use policies to allow for more dense, mixed-use development.

Lest you think you were off the hook by not being a lawmaker, there’s a lot individuals and communities can do as well to support the affordable housing movement:

  • Advocate for pro-housing policies at the local level.
  • Support nonprofit developers and community land trusts.
  • Rent out an ADU or spare room at a reasonable rate.
  • Volunteer with organizations that provide housing assistance.

Affordable housing isn’t just a problem – it’s our problem. You don’t get to opt out of caring just because you own a home or you can easily afford your rent. It affects our communities, our young’uns, and I believe the children are the future. So I’ll end on this quote from Matthew Desmond’s Evicted:

“Housing is absolutely essential to human flourishing. Without stable shelter, it all falls apart.”

Many thanks to the Plutus Foundation who, through their monthly Plutus Impact Series, encouraged us to examine the topic of affordable housing. Not only are they endlessly inspiring and supportive of financial literacy, but they do good work. Plus, for reasons that baffle the greatest of minds, they think we’re cool, for which you’ll have to forgive them.

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