According to the 30th anniversary of the State of the Nation’s Housing by the Joint Center for Housing Studies at Harvard University, even though more than 40 million units have been built over the past three decades, high mortgage rates — which are predicted to climb to more than 5 percent by year’s end — are still causing severe housing woes.

The more things change in the housing sector, the more they seem to stay the same — or worsen.

According to the 30th anniversary of the State of the Nation’s Housing by the Joint Center for Housing Studies at Harvard University, even though more than 40 million units have been built over the past three decades, several challenges highlighted in the initial 1988 report remain.

Among the problems: mortgage rates, which put housing out of reach for many in the late ‘80s and early ‘90s, are on the rise, predicted by some to climb to more than 5 percent by year’s end.

Skyrocketing demand for rentals

Despite a relative boom in multi-family construction, demand for rentals is outstripping supply. And with the “rapid” loss of low-cost rentals, millions of households are spending an “outsized share” of their incomes on housing.

The latest report notes that the ownership rate among young adults in their prime homebuying ages are “even lower” than 30 years ago, and soaring costs are the main culprit. (Median rents are rising 20 percent faster than inflation and median home prices are more than doubling that pace.)

Not only are they not buying, but the report also showed that people aren’t moving as much. Only 11 percent of Americans moved to a new residence last year. That’s down from 2013’s 12 percent and 2006’s 13 percent. Among 20- to 24-year-olds, the population segment most likely to move, only 24 percent did, down from 34 percent in 1996.

According to Slate, some influencing factors are mobility among the aging population, investors buying up a huge chunk of the market and affordability — all contributing factors to low housing inventory.

As has been well-documented elsewhere, the Joint Center says “sharply higher” costs for building materials, labor and land, together with limited productivity gains and new regulatory barriers, have made housing “considerably more expensive.”

The report says that if the country is to make any progress in addressing these and other issues, there is a “clear need” to expand assistance for those beyond the market’s reach.

Chris Herbert, the Joint Center’s managing director, said, “We need strategies to help the private sector produce more moderately-priced housing. Doing so will require new approaches for making effective use of public funding, reducing construction costs and easing regulatory barriers.”

As it is now, the report says, help from Uncle Sam reaches “only a fraction” of the 38 million households with housing cost burdens.

Certain housing issues remain

The current report “does double duty,” said Herbert during a presentation at the National Press Club. “It looks back over the 30 years and also tells the story of the current state of the country’s housing.”

As Herbert, who worked on the original report as a grad student in 1988, sees it, “the long view” for housing “is sobering. A number of issues are still present. If anything, we’ve fallen behind. And if nothing changes over the next 30 years, I don’t think the fabric of our country will hold.”

Daniel McCue, lead author and senior research associate at the Joint Center, told reporters that the challenges facing housing are as familiar as they are persistent:

  • In 1988, homeownership rates were in decline, as they have been for the last 12 years. Ownership rates are 6 percentage points to 8 percentage points below the ‘88 level for young households ages 25-44. And there’s a 29-point difference between ownership rates of blacks verus whites.
  • Thirty years ago, low-cost rentals were in inadequate supply. Today, there are 2.5 million fewer units that rent for $800 or less.
  • Assistance programs were only able to help “a fraction” of those qualified back then. Now, the number of assisted households has grown, but the growth in the number which need help is up even more.

McCue said one of the reasons for the record-low inventory of houses for sale — which is about a four-month’s supply nationwide but under three month’s in many places, “and falling” — is that over the last decade, there have been fewer houses built than during any other 10-year period in American history.

Where does the government come in?

The report details each of the major problems facing housing and households, most of which have been hashed and rehashed in other academic papers, including previous Joint Center studies. But the current study blames the federal government for not doing enough to help alleviate the crisis.

Former Housing and Urban Development Secretary Shaun Donovan, himself an intern on the fifth Joint Center report, said, “One of the most fundamental rules of government is to help people get housing.”

Donovan, who also ran the Office of Management and Budget during the Clinton administration, told the briefing that “land use is king. If we don’t get to zoning and other land use issues, we’re never going to solve the problem. That was true 30 years ago and it’s more so today.”

Herbert said while some state governments are starting to override restrictive local codes and land use policies, “it’s not happening on a scale that it needs to happen. States need to take the lead role in forcing municipalities to deal with their housing issues.”

According to the study, Uncle Sam’s “failure to respond adequately to this large and growing challenge puts millions of households at risk of housing instability and the threats it poses to basic health and safety. Many state and local governments are doing their part to expend assistance, but a more robust federal response is essential to any meaningful progress in combating the nation’s housing affordability crisis.”

According to the report, the problem is this: In the 30 years since the initial State of the Nation’s Housing report, the number of very low-income families has soared by 6 million, to more than 19 million. At the same time, federally subsidized housing has increased by just 900,000 units, all while the stock of rentals costing $800 or less a month has shrunk by some 2.5 million units.

How to halt undesirable housing trends

Meanwhile, the severe housing boom-and-bust cycles of recent years has caused the number of young adult homeowners to fall to below what it was in 1988, while black Americans have made essentially no progress in improving their ownership rate.

“Without greater federal leadership, reversing or even halting these trends is unlikely,” the Harvard report concludes.

At the national level, it calls for expanding the housing choice and low-income housing tax credits, which it calls “the essential pillars of the federal subsidy system.” And at the state and local level, it says regulatory reform — such as greater densities and streamlining the approval process — would go a long way toward reducing housing costs.

The latter would “enable and incentivize builders” to erect affordable houses “to a broader range of incomes,” the report argues. “Striking a balance” between protecting the public interest and the need to reduce the cost of producing housing “is essential if the nation is to meet its stated goal of a decent home and suitable living environment for all.”

Lew Sichelman’s weekly column, “The Housing Scene,” is syndicated to newspapers throughout the country.

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