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April 2018 Monthly Home Update

Dan Gregory March 20, 2018

This is the April 2018 Monthly Home Update where we share what’s going on in the world of homelessness and affordable homes.

 

  1. The core Twin Cities have pledged to do tackle affordable housing.  Former Minneapolis City Council person Steve Minn offers his own ideas as to how Minneapolis and St. Paul can address the problem. Related to this, the St. Paul City Council is getting ready to take on the issue of homelessness.  The goal is to have a plan in place by May 2018.  Not a moment too soon, according to a report from the Minnesota Housing Partnership which shows a decreasing number of affordable properties and more families who are cost-burdened in paying a larger share of their income toward home. Also, a number of mayors across the United States are coming together to tackle the affordable housing crisis in the cities.

 

  1. Minnesota would like to end homelessness by 2020, which is less than two years away. Read on to learn how the state plans to make this a reality.

 

  1. The new tariffs on steel and aluminum imposed by the Trump administration, will have a negative effect on affordable homes.  Taller buildings use steel and the tariffs could mean less housing, making a shortage of homes even worse:

 

Nearly half of all U.S. steel imports go into construction, with a large share of that steel going into multifamily housing. While wood frame construction is increasingly common for apartment buildings up to five stories, the taller structures that are needed in white-hot housing markets such as San Francisco, New York, and Austin depend entirely on access to steel. According to a study released by the Trade Partnership earlier this month, the proposed steel tariffs could lead to 28,000 lost jobs in the construction industry. That’s a lot of housing that won’t be built, and affordable projects that already operate on tight margins will be the first to be cut. While exemptions from the tariffs might offer hope, the price volatility in the near term could still scuttle many large projects, where price certainty is crucial for investors.

 

  1. While there are differences in size, every state in the Union has a gap between affordable homes and people looking for them:

Finding affordable housing isn’t getting any easier for the more than a quarter of U.S. renters that are extremely low-income. For six years, the National Low Income Housing Coalition has released an annual report calculating the discrepancy between available affordable housing units and renters who earn below the poverty line or 30 percent of the area median. Last year, they found that for every 100 households categorized as extremely low income (ELI), only 35 affordable rental homes are available—a shortage of over 7 million affordable and available homes. That same figure stands today.

  1. Imagine having a nice job, but the community where you work is so expensive you can’t afford to live there.  The solution is to live in your car.  The housing crisis in California is so severe that people who, at least on paper, are doing well, have to live in cars:

Housing costs, and homelessness, remain serious concerns across much of the United States, with no easy solutions in sight. According to research from the advocacy group Home1, 11 million Americans spend more than half their paycheck on rent, and the National Low Income Housing Coalition found that a renter making minimum wage working 40 hours a week can reasonably afford a one-bedroom apartment in just 12 counties nationwide. Harvard’s Joint Center for Housing Studies found that rent keeps taking a disproportionate chunk of renter income. In 2016, the median renter in the bottom income quartile had just $488 left each month after housing costs, a full 18 percent less, adjusted for inflation, than they did in 2001. Between 2001 and 2011, the JCHS also found that median rental housing costs rose 5 percent, while median renter income dropped 15 percent.

                                                           

  1. The previous story had information on an advocacy group called Home 1. Citing that housing never came up as an issue in the 2016 presidential campaign, they intend to make it an issue in 2018 midterm races.  Read on to learn more.

 

  1. We used to make fun of manufactured housing, what we used to call mobile homes.  But manufactured housing provided affordable housing for people on the lower end of the economic scale.   Mobile homes are not as prevalent as they used to be 30-40 years ago. Several federal agencies, including Fannie Mae and Freddie Mac, are working to make it easier to purchase manufactured homes and hopefully put a dent in the nationwide affordable housing crisis:

 Previously referred to as mobile homes, manufactured houses are built in a factory, transported to a site on a flatbed truck, and installed on-site. Not to be confused with prefab homes, which have parts made in a factory but are mostly constructed on-site, manufactured homes cost as little as $45,000, a mere fraction of the median price for a new single-family site-built home of $323,000.

Fannie Mae and Freddie Mac, the government-sponsored mortgage facilitators, announced plans in January to make the manufactured housing market more active by purchasing more manufactured housing loans over the next three years.

A few weeks later, the Department of Housing and Urban Development (HUD) announced it was reviewing regulations around manufactured housing in response to President Trump’s executive orders to reduce regulations.

 

In the mid-1990s, manufactured housing production boomed as a result of the type of easy credit that would spread through the entire housing market a few years later. But since then, production has plummeted, leaving affordable housing advocates wondering why—and if a revival of the market could help fill the desperate housing need for low-income families.     

                                                                                                                       

 

                                                                                                                                                                                                                                               

That’s it for the housing update for April. We will see same time next month.