The 4 Ideas That Could Define Housing Policy in 2019

After years of inaction, states and cities are taking aggressive steps to protect renters and bring costs down.

2019 is only two months old and it is already the most ambitious year for housing policy in a decade. States and cities are taking up laws that once seemed impossible and issues that once seemed intractable.

The scale of the problem is immense. Home prices are rising twice as fast as wages. According to the National Low Income Housing Coalition, a minimum-wage worker can’t afford to rent a two-bedroom apartment anywhere in the country. Homes in many coastal cities now require six-digit down payments, driving up inequality and pushing poor and minority residents further from jobs and schools.

But help is on the way. In the last year, the housing crisis has become a defining political issue in cities across the country, showing up in ballot initiatives, gubernatorial campaigns and municipal debates. Nearly every candidate in the Democratic presidential primary has proposed a plan to address the housing crisis. States and cities, too, have laid out measures unthinkably ambitious just a few years ago.

Here are some of the policy ideas that will define the housing crisis in 2019.

California is suing the city of Huntington Beach for building just 100 units of low-income housing since 2014.
California is suing the city of Huntington Beach for building just 100 units of low-income housing since 2014.

1. Hold Cities Accountable For Lack Of Housing

California arguably has the worst housing crisis in the country, with a deficit of 3.5 million homes, skyrocketing rents and a spiraling homelessness crisis.

The new governor, Gavin Newsom, was elected promising to address the crisis and has already announced $1.7 billion in funding for low-income housing, homeless shelters and increased production of middle-class homes.

But the most unprecedented initiative so far was Newsom’s announcement that he would penalize cities that don’t build enough housing. For years, California’s cities have delayed and prevented the construction of new housing units as the state’s population has boomed. The result has been longer commutes, more pollution and stratospheric prices.

Under Newsom’s plan, cities that don’t hit the state’s housing production targets would lose out on revenues from the state’s gas tax. “If you’re not hitting your goals,” Newsom told the Los Angeles Times, “I don’t know why you get the money.”

Similar efforts are underway in other states. In January, Washington state legislators introduced a bill that would require every city over 2,500 people to allow “accessory dwelling units” — basement apartments or backyard cottages — on every single lot. Other states have passed requirements for cities to set aside a percentage of their housing production for low-income units. California is even suing one of its own cities, Huntington Beach, for building just 100 units of low-income housing since 2014.

For decades, states have handed responsibility for housing over to cities. In the future, they may ask for it back.

Police prepare to evict tenants in Atlanta.
Police prepare to evict tenants in Atlanta.

2. Prevent Evictions

Evictions make every aspect of the housing crisis worse. For renters, losing an apartment means steep legal fees, long waiting lists and lost months saving up for another deposit. For cities, residents being kicked out of their homes means more families in shelters, more strain on services and more kids pulled out of school.  

For the last few years, activists, lawyers and legislators have begun to advocate for a more humane approach. In Philadelphia, the Bar Association estimated last November that the city would save $45.2 million per year by spending $3.5 million on legal aid for renters. Without lawyers, tenants who were behind on their rent were evicted 78 percent of the time. With lawyers, 95 percent of renters stayed housed. Every dollar spent on legal aid, a report commissioned by the lawyers’ association found, would save the city $12.74 in shelter costs, legal fees and lost productivity.  

Similar efforts are being made in other cities. Minneapolis and New York are both experimenting with expanding their legal aid programs. In Seattle, the general counsels of 10 local companies (including Amazon, Starbucks, Microsoft and the Seattle Mariners) signed a letter urging the governor and legislature to update Washington’s eviction laws to give tenants longer notice periods for evictions and rent increases.    

“Moderate entities take positions on these things when they start getting impacted,” says Xochitl Maykovich, the political director for the Washington Community Action Network, the NGO leading the effort to pass eviction reform legislation. “Corporations signed this letter because they realize they can’t do business in a city where no one can afford to live.”

According to a 2017 Apartment List study, 27 percent of low-income renters were unable to pay their rent in the last three months and 11 percent had been threatened with eviction in the past year. These programs may begin to bring those numbers down.

Duplexes and townhouses are illegal to build in many of America's major cities.
Duplexes and townhouses are illegal to build in many of America's major cities.

3. Legalize Smaller Homes

One of the great ironies of the housing crisis is that many of the cities that need new dwellings have made it illegal to build them. Zoning restrictions, a legacy of redlining and segregation, mandate that some neighborhoods can build only detached, single-family homes. These neighborhoods make up the majority of urban land in most major cities, and their codes have rendered apartment buildings — and even duplexes and basement units — effectively illegal.

2019 may be the year that finally changes. In December, Minneapolis passed the country’s first comprehensive overhaul of zoning rules to allow duplexes and triplexes citywide. Last month, the speaker of the Oregon House of Representatives, Tina Kotek, said she was drafting a proposal that would legalize up to four homes on all urban land zoned for single-family homes. Seattle is already in the middle of a yearslong process to “upzone” a portion of its single-family neighborhoods.

These are the first large-scale initiatives of their kind, and their effect on housing production and prices remains to be seen. Despite the complaints of neighborhood groups organizing against them, none of these proposals would outlaw detached homes or order the demolition of any existing structures. They will simply allow developers and homeowners to split houses into two or three separate dwellings and build more densely when homes do change hands.

“This is not going to be some monumental change,” Bruce Brunner, a Minneapolis resident, told the Star-Tribune. “It’s a way for us to take what is already here and enhance it.”

In January, Microsoft announced a $500 million investment to help alleviate the housing crisis around Seattle.
In January, Microsoft announced a $500 million investment to help alleviate the housing crisis around Seattle.

4. Companies Finally Step Up

In January, Seattle-based Microsoft announced it would invest $500 million in alleviating the city’s housing crisis.

The company’s effort is unique in a few ways. First, only around 5 percent of the “donation” amount will actually be given away. The rest will take the form of loans targeted at increasing the production of low-income and middle-class housing. Second, the investment will target the suburbs east of Seattle rather than the city itself. Though more low-income Americans live in suburbs than in cities, affluent communities like Redmond, where Microsoft is based, have generally avoided public pressure to build low-income housing. Microsoft’s high-profile initiative may finally force them to play their part.

Third, Microsoft has coupled its investment with 11 political recommendations for state and local lawmakers. These include speeding up permitting processes, providing tax exemptions for low- and middle-income housing and doubling the state’s Housing Trust Fund.

Microsoft hasn’t announced the exact details of the investment or the timeline on which it will be distributed. Villette Nolon, the executive director of Imagine Housing, a local nonprofit developer, said it could result in anywhere from 3,000 to 10,000 extra units of low-income housing. That’s far short of the region’s estimated shortfall of around 340,000 units, but it speaks to the sheer scale of the problem: Even the country’s largest-ever private investment in low-income housing will only begin to turn things around.

Which is why the ultimate importance of the initiative may turn out to be Microsoft’s political efforts. This is the first time a technology company has put its full weight behind policies that could begin to address the housing crisis, said Ethan Phelps-Goodman, the executive director of Tech 4 Housing, a local advocacy group.

“That matters,” Phelps-Goodman added, “because what’s been missing is not an understanding of solutions to the housing crisis, but the political will to get them done.”

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