Housing Affordability

As affordability challenges emerge across the nation, regions and cities must adopt comprehensive approaches to address housing affordability. Our housing plans provide long-term approaches that are grounded in a thorough understanding of market conditions. We conduct an analysis of underlying economic and demographic trends (demand) and development pacing and pipeline (supply) to determine the factors driving local housing challenges. Based on the local drivers of a community’s housing challenges, we recommend a comprehensive set of housing tools including land use, public subsidy, tenants’ rights and infrastructure development. In places such as Atlanta, Detroit, and Wake County, HR&A’s engagements have led to the adoption and implementation of effective housing plans.

To prepare for the future, cities need to know the scale and nature of the gap between available housing and the housing needs of residents. HR&A provides this diagnosis by drawing from an understanding of current and historical conditions, and by projecting future housing conditions based on demographic and economic trends. HR&A has a unique approach that uses Census microdata to allow for nuanced assessments of housing needs by custom neighborhood and demographic group—such as by individual school district, for the City of Atlanta.

Diligent consensus-building is necessary for any plan or strategy to be effectively implemented. HR&A’s engagement process serves to educate on issues and to build consensus around solutions, for two types of critical stakeholder groups:

Local leaders: HR&A facilitates steering committees and advisory boards, typically composed of policymakers, nonprofit leaders, and advocates, who are tasked with providing guidance and oversight on the implementation of housing programs. For example, in Wake County, we engaged a 35-member steering committee through a year-long process of creating an actionable roadmap to guide their affordable housing efforts over the next 20 years.

Community members: At a community level, HR&A engages residents through interactive and collaborative workshops that move away from the ineffective traditional townhall method. For example, we developed a workshop format in Atlanta that immersed each community member through the process and implications of introducing new housing policies.

As nonprofits grow and evolve, they often require an outside assessment of how they can be more effective in achieving their mission. Drawing from far-reaching experience in working both with nonprofit organizations, HR&A evaluates a community’s opportunities and needs, and helps nonprofits plan to build the business capacity required to access new opportunities and meet new needs. For example, HR&A worked with Atlanta Habitat for Humanity to create a new five-year strategic plan to guide the organization’s growth.

While many cities have thrived in recent decades and have experienced commensurate growing pains, the narrative is much different in other places. For cities such as Battle Creek, the great housing challenge is not that there is too much demand or not enough supply, but that there is not much of a market at all. HR&A advises on strategies to rebuild housing markets, beginning with the policy interventions required to help activate and “restart” the market.

In cities such as Milwaukee that are experiencing new pockets of growth, or in areas that anticipate a major investment (such as the addition of a light rail), emerging market pressures can threaten to displace longtime residents. HR&A helps to design policies that retain and build wealth for existing residents and retailers. For example, in Detroit, HR&A explored ways to preempt and prevent displacement in areas of the city experiencing increased investment in recent years.

HR&A has designed and assessed inclusionary zoning (IZ) policies across the country, including in New Orleans, Detroit, Cambridge, Columbus, and New York City. IZ is an important tool for generating mixed-income housing in areas of opportunity. To be effective, IZ policies must be carefully designed to balance affordability goals against market feasibility requirements. HR&A conducts detailed market analyses to ensure that IZ policies maximize the level of required affordability without undermining the housing market needed to generate the housing.

HR&A designs approaches to both fund and operate housing trust funds (HTFs). HTFs are local pools of public funding for housing that have emerged in response to inadequate and declining federal funding. Because they are inherently local, HTFs provide an opportunity to design and fund locally relevant programs and to use funding in more nimble and novel ways.

For example, HR&A supported Pittsburgh in implementing its new Housing Opportunity Fund (HOF), by both facilitating the inaugural funding allocation and by drafting program guidelines and scoring criteria. In the cities of Los Angeles and Irvine, California, HR&A analyzed two mechanisms of funding HTFs—linkage fees and developer fees—to promote policy adjustments that would maximize public benefit and increase policy responsiveness.

Preservation funds invest in properties to preserve the quality and affordability of existing low-rent units, including both subsidized units such as low-income housing tax credit properties and “naturally occurring” affordable housing.

For example, HR&A supported the Westside Future Fund in evaluating different types of loan products to support the preservation of affordable multifamily and single-family housing.

Local governments often provide low-interest loans or grants to multifamily affordable housing development projects to make the projects feasible and to support local policy goals, such as deeper income targeting. Gap funding programs are typically designed to leverage both 4% and 9% low-income housing tax credits (LIHTC) allocated by state housing finance agencies.

HR&A has designed and implemented gap financing programs in several places, such as Wake County and Pittsburgh. In Los Angeles, HR&A has designed a $25M loan program targeted to families with young children, deployed over $116M through the Mental Health Services Act Housing Program over a period of ten years, and implemented the Industry Fund affordable housing development loan program for the LACDC and LA Housing Authority.

Increasingly, cities across the U.S. have adjusted their zoning codes to allow for accessory dwelling units (ADUs), which are small, secondary housing units typically located in a backyard or basement of a single-family home. ADUs are a cost-effective and flexible way to increase the supply of housing, including in areas that would otherwise be difficult to build in. In Washington, D.C., which has recently permitted ADUs, HR&A is involved with a working group led by the Coalition for Smarter Growth to promote and accelerate the adoption of ADUs in the city.

HR&A evaluates how different land use, zoning, and development-related regulations can support or harm housing affordability. Land use is a critical non-monetary lever to support housing affordability.

For the Up For Growth National Coalition, HR&A has created a calculator that measures the impact of policies, such as by-right development and land use, on housing production and affordability at both a project level and citywide. HR&A also helped create a new incentive zoning system in Downtown Los Angeles, to be implemented through by LADCP’s new zoning code.

HR&A evaluates and advises on effective incentives to support the development, redevelopment and preservation of housing of all types. These can include regulatory incentives, such as density bonuses, reduced parking requirements, flexible design standards, and accelerated approvals; or funding incentives, such as reduced fees, public land, or tax incentives.

For the National Multifamily Housing Council, HR&A assessed the nature and trade-offs of affordability incentives, considering both their public good and their effects on the development community. For the Westside Cities of Los Angeles (including Beverly Hills, West Hollywood, Culver City, Santa Monica, and Malibu), HR&A modeled an affordable rental housing production program by identifying the policies and financial mechanisms that would maximize the production of affordable rental units.

Rent regulations are contentious but oft-revisited policies that seek to directly soften the rent burden in high-cost cities by capping or restricting rent increases. On behalf of Los Angeles County, the City of Los Angeles, and the City of Beverly Hills, HR&A has provided recurring analytical support to determine the historical and potential outcomes of rent regulation policies. We advised on issues such as the formula for the maximum allowable annual rent increase, the amounts and beneficiaries of relocation fees that landlords must pay in “no cause” evictions, and whether to exempt certain building types from regulation. As part of this process, HR&A engaged and facilitated dialogue between a wide range of stakeholders including tenants, landlords, mobile home park owners and residents, and city officials. HR&A has also worked with the National Multifamily Housing Council to assess and articulate the nuances and challenges of implementing non-distortionary rent regulations.

HR&A provides underwriting services to local governments and housing authorities for multifamily affordable housing developments. We underwrite projects to ensure that public investment secures the maximum level of affordability and that the projects invested in align with public policy goals set by the local government. For example, in Wake County, HR&A is helping to implement the city’s new revolving loan fund by reviewing and underwriting developer applications.

Many housing agencies face an inventory of aging and obsolete public housing inventory in need of significant capital investment or redevelopment. Agencies often seek to address these challenges without displacing existing residents while creating more balanced mixed-income communities. For housing authorities in places including Washington DC, New York City, Los Angeles, Atlanta, and Norfolk, HR&A provides strategic planning assistance, transaction support services, and real estate advisory for key projects throughout housing agency portfolios, with the aim of helping agencies meet their goals by leveraging assets and limiting funding to the greatest extent possible.

HR&A provides master planning, capital investment advisory, and feasibility study services to often highly complex mixed-income developments, such as Starrett City, the largest affordable housing complex in the U.S. Through these developments, HR&A assesses and advises on site development potential and on investments in public space, connectivity, and programming that would meaningfully improve conditions for current and future residents. In cities such as Phoenix, Pasadena, and Azusa, HR&A has designed incentives that will motivate developers to build affordable housing, and then evaluated and selected developers best qualified for the task.