It is time for bold approaches that empower urban dwellers and prospective urban dwellers through income equality and increased support from government. Young people are affected worst by the lack of affordability and many leave costly urban areas for suburbs or even towns. Below are a list of policy tools for lawmakers and business leaders alike to address the housing crisis.
1. The most common approach of buying smaller and smaller, tiny apartments and studios is not a healthy nor sustainable approach. In an interview with The Atlantic, Environmental Psychologist and Director of the Housing Environments Research Group Children, Professor Kopec of CUNY Graduate Center stated that smaller and cheaper apartments are no solution for housing. In ones 20’s, apartments seem like a good option, in 30’s and above the feelings of claustrophobia and cramped spaces that small apartments bring lead to decline in mental health of residents. Smaller apartments can put residents at an increased risk for drug abuse and young children who live in apartments with their families find it more difficult to read and concentrate on their studies and have lower scores in exams.
2. The world is experiencing a period of fluctuation due to trade disputes, civic conflicts, the refugee crisis, and even availability of natural resources and labour with aging and/or shrinking populations. All these affect local economies and urban areas often see a large increase in immigrant numbers. One option to lower risk is pursuing public-private partnerships to build low-income and average-income oriented homes. Coupled with high volume projects, political leadership can eliminate or reduce taxes on sales of affordable units.
3. Affordable housing units can be funded by government-created and regulated mechanisms of community funding or crowd-funding campaigns that allow investors and entrepreneurs to make socially-conscious investments in mixed-use affordable housing developments and retain ownership, for example.
4. Increasing density is an effective way to use municipal land rezoning single family residential properties into multi-unit developments, such as apartment complexes and rowhouses and allowing subdivisions of large homes. This can increase the supply of affordable homes and give developers new opportunities to revitalize neighbourhoods. It is likely that the benefits of rezoning single-family homes for multi-unit developments will include an overall positive impact for affordability.
5. Rent-to-own schemes: A down payment can be replaced by rental cost until the sum of the down payment is paid, or another pre-determined monthly price. The monthly payment could then rise to a higher amount (same as owning the home) or remain the same. Developers can benefit by more easily clearing unsold units in rent-to-own agreements that otherwise would take more time to sell and increase holding costs. These schemes could help lower-income groups who cannot afford to buy a home nor get a loan for a home. As people move from rental unit to rental unit, many do not have any money at the end and are still living pay cheque to pay cheque and with Rent-to-Own, home ownership could become a source of wealth generation and also a means of passing on wealth to future generations. The schemes would require a legal framework study on how best to protect both the tenant and landlords in such agreements i.e who is responsible for maintaining the property throughout the process.
6. A negative tax (or rebate) could be an incentive for companies that build rent-to-own or in general affordable housing, follow through in implementation and prove a high level of buyer/tenant satisfaction.
7. Government acquisition of land near transit, rezoning it for higher density development including duplexes, townhouses, stacked townhouses and small in-fill houses; offering it for sale at below market rates to developers who build affordable market and rental housing geared to households at average or below average household income; and providing covenants on the property title to minimize windfall profits on subsequent sales.. Governments can form partnerships with developers, builders and other private sector and non-profit housing providers to bring more affordably priced units onto the market in transit-friendly locations that would help defray transportation costs for residents (REGBV, 2018).
8. Ending Property Transfer Tax and the federal Goods and Services Tax on homes deemed affordable (REGBV, 2018).
9. Consulting local real estate boards before introducing mortgage rule changes that impact low income and first-time buyers (REGBV, 2018).
10. Creating ‘home ownership’ subsidies to support first time home buyers down payments
11. Limiting foreign speculation through taxes on international investors who do not make primary residences of the homes they buy
12. Partnering with banks and financial planning advisors to create city-wide programs that help teach people, especially young people including students and immigrants how to manage their finances and how to build their credit - Young adults often experience confusion and misinformation when seeking guidance on managing finances and immigrants can also find it hard to learn a new set of policies in a new country. Financial planning leads to greater financial success and less stress thereof while helping people achieve a higher quality of life.
13. Repealing rent control measures that may be observed to de-incentivizing developers from building new housing units – the lack of which can be the key issue in urban areas
14. Introducing recommendations for builders to use building materials that are eco-friendly (i.e natural disaster resistant w/high durability) for new buildings and renovating/replacing older structures over time - This transition benefits builders, home buyers, renters and the environment. More research is needed for cost-efficient locally-sourced sustainable materials for construction to provide environmental, health and social benefits that can increase the safety and lifespan of structures, resulting in reduced costs for maintenance and repair over time.
15. Introducing apprenticeship programs to high schools. Some young people choose to work after secondary schooling instead of post-secondary education. Creating high school programs that teach the skills needed by local employers will enable youth to not only find work right away but to get a head start on income advancement. These programs are common in Germany while in the UK, businesses can pay an optional tax and get access to apprenticeship/training programs for their employees and new recruits. In the Netherlands, young people who are consistently unemployed are placed in three-month paid internships that help lead to higher careers. Employers receive tax breaks for participating. Quality of life and opportunities for young people will improve through this approach and the social support that young people require.
16. Encouraging local employers and job agencies to use digital job matching engines such as LinkedIn. Municipalities can boost economic productivity and the growth that comes with it through workshops that teach how to present past experiences digitally and employers would have easy and improved access to this database. Workshops can also be held for local business owners and employers to learn how to implement job matching engines into their organizations.
17. Facilitate an environment where it is easier for women to work and contribute to household income. One method is subsidizing childcare costs. Less time spent worrying about where to leave one’s children while working increases the number of hours and mental focus that parents have to be productive in the economy. 18. Introduce recommendations for businesses to incorporate women’s networks in their organizations so that women feel more welcome, more supported and more familiarity in workplaces.
19. Create programs that foster a culture of marriage. Married couples with or without children are less likely to fall into poverty than single people with or without children. Families can share income, gain access to new tax breaks and the emotional and mental support that comes with being a unit. Out of a multitude of marriage promotion programs, the most successful was the Family Expectations Program in Oklahoma City. In 15 months, unmarried couples were helped to strengthen their relationships and this led to a large success in long-term poverty reduction and prevention.
20. Renovating or redeveloping factories and industrial areas into living spaces and also vacant historical homes.
21. Building shelters and housing for the homeless is a safer, healthier and more cost-effective solution than leaving the homeless outside which increases emergency, healthcare, policing and legal costs
Authors: Jashan Singh Randhawa & Jennica Palecek Affordable Housing Project Team members include Rosalyn Rai & Susanna Piasecki Cover image: Artist Enrique Lescure, edited by Jashan Singh Randhawa Date: August 15, 2019 Updated: June 28, 2020
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