ARLINGTON, Va. / Dec. 9, 2013 – Following is a statement from Doug Culkin, CAE, President and CEO of NAA, on Harvard University's Joint Center for Housing Studies Report: “America’s Rental Housing: Evolving Markets and Needs”:
For the first time, more than half of all U.S. renters spend more than 30 percent of their income on rent, according to the most recent Harvard University’s Joint Center for Housing Studies report. Housing affordability remains an issue for many residents. This is due, in part, to the numerous regulatory barriers our industry still faces when building new rental housing, including affordable housing. The apartment sector did not overbuild during the housing boom, and then was severely constrained for two years after the market crash because of a shortage of financing. The financial collapse virtually shut down new apartment construction. Construction is now increasing, but it still remains below the levels needed to meet rising demand.
Unnecessary building regulations, outdated zoning codes and general opposition to apartments raise construction costs—and thus the rents for residents—for those apartments that do get built. These obstacles to new development must be removed in order to provide a greater, more stable supply of affordable apartments.
Harvard’s Joint Center for Housing Studies report suggests that there must be greater incentives to invest in existing affordable housing, such as more generous tax breaks for maintenance and improvements or exemption for certain local building code requirements. This is one good solution for preserving affordable housing. As the Harvard study notes, cost-effective rehabilitation projects will provide residents with safe and affordable housing that may not otherwise be possible from a new construction standpoint.
Additionally, the development of more micro-apartments could increase the affordable supply in high-density, high-cost areas. Many cities and towns have specific zoning laws that include minimum square footage requirements for livable units. Reevaluating these specifications could provide urban residents with more affordable housing options.
Rising rents are a temporary situation in a highly cyclical market caused by economic factors outside the industry’s control. Moreover, when adjusted for inflation, rents are actually lower than they were 10 years ago, according to Reis and the National Multi Housing Council. A return to more normal levels of apartment construction can help relieve constrained supply and upward pressure on rents in the process. America’s affordable housing shortage is an income problem. It’s not that rental housing has gotten so expensive, but rather that the income of too many renter households is too low to afford rents that the market can reasonably offer.
NAA and its affiliates are dedicated to providing residents with safe and affordable housing, and look forward to continuing to work with policymakers at all levels of government on sensible and effective strategies to meet this need.
About NAA: The National Apartment Association (NAA) is America’s leading advocate for quality rental housing. NAA’s mission is to serve the interests of multifamily housing owners, managers, developers and suppliers and maintain a high level of professionalism in the multifamily housing industry to better serve the rental housing needs of the public.
NAA is a federation of more than 170 state and local affiliates, comprised of more than 63,000 multifamily housing companies representing more than 6.8 million apartment homes throughout the United States and Canada. Members in good standing of any affiliated association are automatically considered members of NAA and entitled to NAA benefits.