In June 2018, Congress’ New Democrat Coalition Housing Task Force released its first whitepaper. The task force, co-chaired by Washington Congressman Denny Heck, convened in 2017 to “look at the entire housing ecosystem and identify solutions to rising housing costs” — a pressing issue, Rep. Heck notes, in the Puget Sound region and across the country.
Through its meetings with stakeholders, economists, academic experts, and policymakers, the task force observed that a shortage of housing units is at the root of the nation’s housing crisis.
“We set out to understand why housing costs were rising, but the answer was quickly clear. We have far too few homes,” Congressman Heck said in a press release. “As a result, prices are being bid up, housing consumes an ever-increasing part of family budgets, and those without means are being forced into homelessness. We must recognize this as a crisis and find a way to change public policy to dramatically increase construction and build millions more homes.”
Among the report’s observations are that rates of home ownership have fallen drastically in recent years, while “rents are rising faster than incomes in almost every large market in the country,” forcing families to pay more of their incomes in rent each month.
Seattle showed up in two specific observations: the increase of people experiencing homelessness, specifically in “thriving West-Coast cities,” and the absence of a “boomtown” phenomenon in cities where industry has taken off.
“In the cities with the fastest growing economies, competition over scarce housing is the fiercest, and the poorest families eventually find that no housing is affordable,” according to the report.
People used to flock to cities that “exploited new technology” (see Chicago, Detroit, and Los Angeles in the above graph) for their high wages, according to the report. But in today’s high-wage cities, “populations no longer soar because they do not build enough new housing to offer to all the people who would come.”
The report details what the task force believes is behind the trends, which essentially distills to there being more bidders than homes to bid on.
“The industry is building 30 percent fewer homes than a decade ago and roughly the same number as were built during the mid-1990s, when the population was 20 percent smaller.”
And the scene is especially bleak, according to the report, for people in the lowest income brackets.
“The number of units available to households with very-low or extremely-low income is in outright decline,” the report reads, “Construction of these affordable units is not even keeping up with the rate at which they are torn down, much less kept pace with the growth of populations they serve.”
The task force, according to Heck’s website, planned to release a report with policy recommendations in late 2018. It has not released that report at this point (January 11, 2019), and Rep. Heck’s office said the final report is “still in the works.”
It’s possible those recommendations will address the significant contributors to the issue noted in the preliminary report: zoning and land-use regulations that restrict housing construction (e.g. height limits, minimum lot sizes, parking requirements, and historic preservation), increased demand for housing in rare urban areas that are “walkable” and “transit-served” (though the report says this “demand-shift theory” is often overstated), a shortage of construction funding after the financial crisis, and a stagnant construction labor pool.
Regardless, the report’s final sentence admits that the task force is sure to face challenges as it develops the recommendations.
“Power is fragmented across federal, state, and local governments, and housing programs are very siloed,” the report concludes. “Nobody is looking at the ecosystem as a whole. But the work is critically important to America’s economy and America’s families.”