The changing demography of multifamily rental housing

Abstract

The residents of multifamily rental housing are different from both homeowners and single‐family home renters, and these differences have implications for the housing market and for public policy. This article describes apartment residents today, discusses recent changes in their number and characteristics, projects their future growth and composition, and highlights business and policy implications of future changes.

For purposes of business and public policy, a segmentation of apartment residents into three submarkets is useful: the “affordable” market serving low‐ and moderate‐income households, some of which receive government housing assistance; the “lifestyle apartment market” serving higher‐income adult households; and the substantial “middle market.” The number of apartment renters is likely to grow moderately over time. The combination of multifamily structure type and rental tenure form offers unique opportunities not only for provision of affordable housing but also for revitalization of downtown areas and balanced “smart” growth in suburban areas.     

The new demographics of housing

Abstract

During the 1990s, minorities played an increasing role in population growth throughout the United States. Fueled by international migration and by high natural increase, Asians and Hispanics have joined with blacks to greatly elevate minority contributions to population and household growth at almost every geographic level. In addition to racial and ethnic turnover, households have been changing compositionally because of the aging of the population and because of the increase in the number of unmarried adults.

This article surveys these and other demographic changes and examines their implications for household growth and housing consumption. A clearer understanding of both white and minority roles in owner and renter housing trends is developed through tracking changing consumption patterns. Distinct patterns of cohort turnover have taken place in different vintage housing stock. These trends, which have led to large net gains for minorities, are expected to continue over the next decade and beyond.     

Retracting suburbia: Smart growth and the future of housing

Abstract

Metropolitan areas throughout the United States increasingly experience sprawl development. States such as Oregon and Maryland have enacted land use legislation that curbs sprawl by promoting denser urban growth. Smart growth, a new method of metropolitan development leading to more compact regions, offers an alternative to sprawl. Given that housing comprises a major share of the built environment, policies that promote denser residential development form a key component of smart growth.

This article provides an analytic review of the ways housing can be used to support successful smart growth policies. It focuses on three areas: the market for higher density housing, land use issues associated with denser housing development, and methods for financing higher density and mixed‐use housing. The literature on the link between smart growth and housing remains underdeveloped. We offer this synthesis as a way to advance the state of knowledge on smart growth's housing dimension.     

Evictions: The hidden housing problem

Abstract

Although evictions are a major housing problem that disproportionately affects lower‐income and minority tenants, no systematic data about evictions are collected on a local or national level. This article presents the scattered available data on the magnitude and impact of the problem, along with existing model efforts to reduce its incidence and impact.

Creating a national database on evictions—how many, where, who, why, and what happens to evictees—would be an important first step in focusing attention on this neglected issue. Definitional questions must be resolved as an initial step. In an effort to launch such a project, suggestions are offered on how to begin creating such a database.     

Mitigating apprehension about section 8 vouchers: The positive role of housing specialists in search and placement

Abstract

The U.S. Department of Housing and Urban Development has found that Section 8 voucher recipients are often unable to secure apartments outside of high‐poverty areas in tight urban rental markets. However, intensive housing placement services greatly improve the success and mobility of voucher holders. Drawing on ethnographic research in the housing placement department of a private, nonprofit community‐based organization, I first describe how fundamental problems in implementing the public subsidy program in a tight private rental market generate apprehension among landlords and voucher recipients that can prevent the successful use of vouchers. Second, I demonstrate how housing placement specialists can dispel and overcome this apprehension through a variety of tactics that require extensive soft skills and a deep commitment to the mission of housing poor families.

These findings provide support for the increased use of housing placement services to improve success and mobility rates for Section 8 vouchers.     

Current practices for procuring affordable housing: The Canadian context

Abstract

This article describes the current housing system in Canada, focusing particularly on the various mechanisms still available for providing affordable housing. Beginning with an overview of the Canadian housing system, it provides a brief history of Canadian housing policy and program initiatives instrumental in developing the inventory of affordable housing available today.

Current practices and procedures in private lending for affordable housing are highlighted. A discussion of current initiatives available to provide affordable housing follows, with a focus on the role of government, the third sector, and new partnership arrangements implemented to encourage more affordable housing. The conclusion highlights recent changes, the current state of the affordable housing sector, and the impact these changes may have on low‐ and moderate‐income households in Canada.     

Subsidized housing and neighborhood racial transition: An empirical investigation

Abstract

Popular wisdom has it that the development of project‐based assisted housing will cause whites to flee or avoid the surrounding neighborhood, leading to rapid racial transition. This article examines the question of whether the development of several types of project‐based, federally assisted housing had an impact on neighborhood racial transition during the 1980s. In general, the development of assisted housing in a neighborhood did not lead to racial transition, nor did it approach levels suggesting “white flight” in the few instances where racial transition did occur.

The results of our analysis suggest that one of the major criticisms of project‐based assisted housing—that it contributes to racial segregation by causing white flight—is not supported by empirical evidence.     

Beneficiaries of federal housing programs: A data reconnaissance

Abstract

This article reports on a reconnaissance of information systems containing data on the beneficiaries of direct and indirect federal housing expenditures. It covers data in the U.S. Departments of Agriculture, Housing and Urban Development, Veterans Affairs, and the Treasury; the Resolution Trust Corporation; financial regulatory agencies; and secondary mortgage market actors.

Data varied widely across agencies in availability, accessibility, and quality. Data are more systematically collected for low‐income beneficiaries of housing programs than for the more affluent beneficiaries of indirect housing expenditures. The systems need improvements in data quality and coverage and database format, though they have improved recently. Many research topics can be explored with new and underused data systems: the characteristics of beneficiaries of rural housing programs, urban rental housing programs, low‐income homeownership programs, and mortgage guarantee and insurance programs. But the lack of information on the systems themselves makes data difficult to locate and access.     

Inclusionary housing in California and New Jersey: A comparative analysis

Abstract

Many people have argued that inclusionary housing (IH) is a desirable land use strategy to address lower‐income housing needs and to further the geographic dispersal of the lower‐income population. In an attempt to evaluate the effectiveness of IH, this article examines the experiences of New Jersey and California, two states where IH has been applied frequently over an extended period.

While the concept of regional “fair share” is central to both states’ experiences, the origins of the programs, their applications, and their evolutions are quite dissimilar. IH originated in New Jersey from the famous Mount Laurel cases and in California from housing affordability crises and a legislatively mandated housing element. The experiences of both states indicate that IH can and should be part of an overall affordable housing strategy but that it is unlikely to become the core of such a strategy.     

Brownfield redevelopment and affordable housing: A case study of New Jersey

Abstract

A total of 779 New Jersey residents were surveyed to determine the number of people who during the next five years would be willing to move to housing built on brownfield sites that have been remediated to the extent that they pose no plausible brownfield‐related health risk to residents.

Fourteen percent of the respondents said they would be willing to move to and live in housing built on cleaned‐up brownfields. These respondents were disproportionately relatively poor and young and resided in apartments and cities, especially cities where the city government was actively promoting brownfields. These respondents also did not like their current neighborhoods, did not feel threatened by the idea of living on a cleaned‐up brownfield site, and trusted experts to advise them on the health risks involved.     

The impacts of welfare reform on recipients of housing assistance

Abstract

This article uses data from randomized evaluations in Indiana and Delaware to address three questions: (1) Are welfare recipients who receive federal housing assistance less employable than recipients who do not? (2) How does the impact of welfare reform compare for families with and without housing assistance? (3) Does welfare reform increase or decrease the use of such assistance?

Although public housing residents may be more disadvantaged than welfare recipients who do not get housing assistance, voucher users and Section 8 project‐based recipients were not. Welfare reform had similar impacts on the earnings and welfare benefits of families that received housing assistance and those that did not. Where impacts did differ, they were larger for families receiving assistance. Welfare reform also reduced the receipt of housing assistance. Families that receive assistance appear to have less financial strain than families that do not, suggesting that assistance may increase overall financial stability.     

The impact of real Estate Market knowledge on tenure choice: A comparison of black and white households

Abstract

Homeownership is an important social and financial achievement for most U.S. households. Various explanations have been offered for the large and persistent gap in the ownership rates of black and white households, but studies have consistently fallen short of identifying all of the causes.

The data we used were derived from a survey of the residents of the Columbus, OH, area. We argue that differences in real estate market knowledge and information affect the tenure choice decisions of black and white households. We estimate a model that is augmented to include a measure of real estate knowledge and find that additional knowledge increases the likelihood of homeownership. This holds even when we account for the endogeneity of such knowledge. We conclude that differences in real estate knowledge contribute to explaining the racial gap in homeownership rates, a finding that can be addressed through public policy interventions such as counseling programs.     

Local response to federal changes in the housing voucher program: A case study of intraregional cooperation

Abstract

The desire to increase residential choice for Section 8 voucher clients resulted in the adoption of portability by the U.S. Department of Housing and Urban Development. Portability allows voucher holders to move between the jurisdictions of local housing authorities (HAs). InterHA cooperation could ease the administrative and financial burdens imposed by portability and improve service to voucher recipients. However, voluntary regional cooperation is rare.

This article presents a case study of a successful, voluntary, intraregional cooperative agreement among HAs. Theoretical and empirical analyses suggest that a cooperative agreement is more likely to develop voluntarily if two conditions are present: rational self‐interest and shared norms and trust among the managers. Agreements can ease the burdens associated with portability, but it is important for the parties to regularly assess implementation issues to ensure the agreement's continuing effectiveness. The article concludes with policy implications based on the findings from this research.     

The emergence of stable racially and ethnically diverse urban communities: A case study of nine U.S. cities

Abstract

We examine the characteristics of 14 stable racially and ethnically diverse urban communities in 9 U.S. cities and point to policies that could strengthen these communities and encourage the growth of more diverse neighborhoods in American cities. The cities examined are Chicago; Denver; Houston; Memphis, TN; Milwaukee; New York; Oakland, CA; Philadelphia; and Seattle. University researchers and community leaders in each city collaborated on the research for this project.

We identify two types of stable diverse communities, “self‐conscious” and “laissez‐faire,” which have evolved for different reasons and with different characteristics. Stable diverse communities will not just happen, but they can be influenced by a number of policy recommendations stemming from our research. These include helping individuals and organizations take leadership roles in their communities, strengthening and enforcing fair housing and antidiscrimination laws, earmarking economic resources to encourage neighborhood diversity, and creating community safety and jobs programs.     

The role of subsidized housing in reducing homelessness: An empirical investigation using micro-data

Additional funding for subsidized housing is one of the most commonly proposed solutions to the problem of homelessness. For example, the Interagency Council on the Homeless has called for a $2 billion increase in the budget of the Department of Housing and Urban Development (HUD) to address the shortage of subsidized housing. However, research on the effect of subsidized housing in reducing homelessness is far from conclusive. This study combines data from the American Housing Survey (AHS) with a survey of the homeless to estimate the effectiveness of subsidized housing in reducing homelessness. The results indicate that subsidized housing has not targeted those most at risk of being homeless, and therefore a simple expansion of existing housing programs will have little effect on the number of homeless.     

Citizen satisfaction under changing political leadership: The role of partisan motivated reasoning

There exists a gap in our understanding of what citizen satisfaction evaluations actually represent. While recent years have witnessed a move away from performance‐based models to cognitive‐implicit models of citizen satisfaction, the inherent political nature of government, its institutions, and services has been largely ignored. Drawing on the functional responsibility chain between political principals and governmental, public‐service‐delivering institutions, we outline a theory of citizen satisfaction that accounts for the political nature of these institutions. In the context of two consecutive general elections, we find a partisan bias in citizen satisfaction with government and the legislative branch, but not for institutions that are more clearly separated from national government. These mixed findings are suggestive of a dispersion effect of the partisan bias in citizen satisfaction, namely, that citizens are less likely to use their partisan lenses in cases where the responsibility of political principals is dispersed across multiple actors.     

Introduction to session 2: Magnitude of the crisis: The fiscal and human costs

Abstract

Many are looking to California and its state housing law for advice on how to deal with the affordability challenges affecting many metropolitan areas throughout the nation. It is thus critically important to go beyond the laws themselves and examine how state and municipal governance structure affects affordability, supply, and production. Some states give broad freedom to localities to develop policies that can potentially meet a range of goals and objectives. Others directly undermine those efforts by limiting local ability to pursue policy reforms while simultaneously failing to engage on the state level.

The redefinition of federalism on the national level, coupled with continued resistance to growth from some localities, establishes the state as at least an equal partner in dealing with housing supply and affordability issues. Understanding these distinctions is important, and the housing community needs to take them into account as it moves on the state front.     

In through the back door: Social equity and regional governance

Abstract

A leading impulse for new regionalism in the 1990s was the sense that suburban and central cities are economically interdependent and should work cooperatively toward common regional welfare in the face of globalized competition. If this is so, we should witness an emergence of regional policies that combat concentrated poverty, segregation, and place‐based inequalities that impose significant economic costs. This article assesses the extent and types of metropolitan equity efforts under new regionalism, the pathways through which they arise, and their prospects.

Research finds that equity‐based regional policies are increasing; they take diverse forms and are commonly shaped by state or federal programs, but they are not explicit and primary parts of regional agendas. While regional entities have not advanced explicit discussions about equity, a confluence of intergovernmental programs and quality of life issues has added regional equity to the portfolio of metropolitan goals.     

The convergence of nonequity housing models in Canada: Changes to housing policy since 1990

Abstract

This study examines the impact of housing policy convergence on the nonequity housing system in Ontario, Canada. Ontario has four distinct nonequity housing models— public, nonprofit cooperative, municipal nonprofit, and private nonprofit. This article argues that since 1990, housing policy in Canada, and particularly in Ontario, has become increasingly influenced by the neoconservative agenda of downsizing and decentralization of government functions found in the United States.

The findings reveal that changes to housing policy have caused the convergence of nonequity housing models in the areas of management and administration. Drawing on the present findings and on an experimental project in tenant management, this article argues that the trend toward convergence will continue and will likely result in one nonequity housing model in Canada. This pattern is interpreted in light of the neoconservative agenda of both countries that emphasizes private sector solutions to housing low‐income families.     

Islands of decay in seas of renewal: Housing policy and the resurgence of gentrification

Abstract

For many observers, the recession of the early 1990s signaled the end of what Berry called islands of renewal in seas of decay. In the past decade, however, shifts in mortgage finance have intersected with developments in assisted housing to alter the links between gentrification and housing policy. In this article, we use field observation, Home Mortgage Disclosure Act data, and HOPE VI plans to analyze the resurgence of gentrification in eight U.S. cities.

Between 1992 and 1997, gentrified neighborhoods attracted conventional homepurchase mortgage capital at a rate that grew at more than 2.3 times the suburban rate. Logit models confirm that mortgage capital favors gentrified neighborhoods even after controlling for applicant and loan characteristics, suggesting a new relationship between mortgage lending and neighborhood change. In some cities, gentrification has surrounded islands of decay and poverty with landscapes of renewal