US Federal affordable housing policies

175 Pages·2017·7.15 MB·English

Affordable housing
United States of America
Delft
January 2016
Colofon
Titel
Affordable housing: United States of America
University
Delft University of Technology
Faculty
Architecture
Mastertrack
Management in the Build Envirnment
Supervisors
G.A. van Bortel, M.G. Elsinga
Pages
51
Date
12-jan-2017
Colofon
Writer
Hans J. Trip
Content
Foreword ..................................................................4
Summary...................................................................5
Terminology .............................................................6
Readers guide ..........................................................7
1. General .........................................................................8
1.1 Research framework ..........................................8
1.2 History of affordable housing US ...................16
1.3 Worst case needs ............................................21
2. Policy analysis .............................................................25
2.1 US housing system ..........................................26
2.2 Tenant Based ...................................................30
2.3 Project Based ...................................................32
2.4 Tax credits ........................................................34
2.5 Transformation programs................................40
3. Case study background ....................................42
3. C S background ..........................................................42
3.1 Why NYCHA .....................................................43
3.2 History of NYCHA ............................................45
4. References ..................................................................46
References ..............................................................46
App. 1 Table of content P4/5 ................................48
App. 2 Planning .....................................................49
App 3. Prototype ...................................................50
Foreword
My motivation compared that is a lot and actually most to win.
I like to think of myself as a person who of Europe. But on the other side of And it is exactly that reason why my
is putting his ambitions and abilities the Atlantic in the United States it is a research is focused on affordable
to good use for the society. I believe completely different story. In the United housing policies in the United States.
that individuals can actually make a States of America there are 124 million
difference no matter where they work or households and only around 4.7 million My learning goals
under which circumstances. But some households receive governmental rental What I would like to gain is a great
places are in greater need than others assistance of which 1.1 million public understanding and deep knowledge
and some job positions may make it housing units(Statista,2016)(HUD,2016). of the US affordable housing policies,
easier to realize change than other not just numbers on pages but also
positions. This is only 3.8% of the total amount of know how the practice field works and
households while still 7.7 million (6.2%) what they find of the different policies.
In our field of work the built are in desperate need of assistance Questions such as what works and
environment we provide people (Steffen, Carter, Martin, et al., 2015). what doesn’t, why do they even exist
with one the basic needs of humans, and what policies perform the best
housing. And gladly I can say that a The system in the United States is in realizing affordable housing units
far majority of people are blessed with known as a place where you can make it are questions that I hope finding the
appropriate housing. But sadly not all if you work for it, “the American dream”. answers to. In the end I believe that the
the people are that blessed, all over The downside is that people who don’t knowledge from this research could
the world people struggle with finding seem to make it are left out. Policies greatly benefit the housing system in
decent housing. But I find it fascinating for affordable housing and other the United States, but also in other
that in the western world which is rich welfare programs are introduced but go countries such as the Netherlands.
not everyone has got decent housing, against the main principal of individual
and that is something that I feel I can independence. That is why there are so
and should help with. many different policies introduced over
the years to realize affordable housing.
In the Netherlands there are 7.3 million
dwellings of which 2.2 million(30%) are Knowing that the governmental system
public housing (CBS,2016). That means and attitude of the residents won’t
that 2.2 million households receive change there is a chance to do some
rental assistance and internationally good work here since there is so much
4
Summary
In the United States of America exists a started in 1937 with housing for the working credit agencies.
huge shortage of affordable housing. The class, but after the war the houses were mainly
households that should be able to get federal dominated by poor afro Americans. This lead This goal of this research is to increase
rental assistance but who do not yet get it are to segregation, no go areas and criminality, knowledge about the historical efficiency of
called the worst case needs. and also lead to decreasing support for public the federal affordable housing policies. The
Worst case needs can be seen as a group housing. When public housing started the target group for this report is HUD the federal
who have severe rent issues. There are about operating and maintenance cost were taken policy maker. The results of this research can
7.7 million household who fall under this care by the rents, but with the increasing poor be used to improve the federal affordable
terminology. A household is a worst case need residents the rents lowered and operational housing regime.
when: funds had to be assigned. The government
1. they have very or extremely low income decided later on in the 1960’s that federal The research question of this report is:
2. they need to pay more or equal than 50% support should move more towards demand “What are the United states government most
of their income to rent or life in severely based instead of supply based, this is when cost efficient* affordable housing policies?”
inadequate housing section 8, HOPE VI, LIHTC and RAD was
3. they do not receive governmental housing introduced. Section 8 got later the emphasis To research the efficiency of the different
assistance of the Government under the Nixon policies first the federal policy background has
4. they are not homeless administration. to be clear followed by a case study. The case
All over the country there are not enough study for this research is the New York City
housing unites for this group. For the For affordable housing there are two Housing Authority.
extremely low and very low incomes housing departments that both support the realization
units are scares. For the extremely low of affordable housing units, The New York City Housing Authority is the
income groups only 65 units exist for every 1. US Department of Housing and Urban biggest housing authority when it comes to
100 tenants, but because people of higher Development public as well as section 8 housing. Since
income stay often in cheaper housing units 2. US Department of treasury. LIHTC are given out by a housing credit
the available units are only 39 for every 100 HUD realizes affordable housing by active agency and not by a housing authority they
tenants. These numbers show an extreme subsidies, these subsidies can be tenant based will not be researched on efficiency in this
shortage in affordable houses. or project based. The Department of Treasury report.
provides passive subsidies by giving discount
The United States has got a long history on tax payments. The parties that execute The methods used for this research are
of federal supported housing to counter the federal policies are for HUD the Housing interviews, desk research and an efficiency
problems such as the worst case needs. It all Authorities and for the treasury the housing study.
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Terminology
HUD that is assigned to tenants instead of important terms throughout this report.
The United States department of projects. With efficiency is meant the least
Housing and Urban Development. amount of federal costs to realize an
LIHTC affordable housing units.
HCA Low income housing tax credits are
Housing credit agency, a state wide tax credits that investors can receive Worst case needs
agency that falls under the IRS. for building affordable housing. The Worst case needs are the eligible
HCA assigns the credits to specific people for federal rental assistance
IRS projects who do not receive assistance yet.
Internal Revenue service is a
bureau under the US department AMI Affordable housing units
of treasury. The IRS is the tax AMI is the average median income. Rental housing units that are
administrator and enforces. Acceptable rents for households are affordable for the intended
calculated as a percentage of the income groups according to HUD
HA AMI. regulations.
The Housing Authorities are
public organizations that provide Public housing NYCHA
affordable homes to those in need. Public housing is the oldest US NYCHA stands for the New York
The HA’s get their funds and policies policy to provide affordable housing City Housing Authority. This housing
from HUD and local governmental units. Public housing is owned and authority is the case study that is going
institutions. managed by HA’s. to be used for this report.
PBRA Housing vouchers (Section 8 TBRA)
Project based rental assistance. Housing vouchers are a federal
PBRA means that federal assistance subsidy that pays the difference
is assigned to certain projects/ between the low income households
buildings instead of to tenants. and the rent of the private rental
sector.
TBRA
Tenant based rental assistance. Efficiency research
TBRA is the federal rental assistance The term efficiency is one of the most
6
Readers guide
Throughout this report there are two different 5.1 Background of interview
5.2 Interview results
levels analyzed, the federal level and the local
case study. To make a clear distinction of
7. Conclusions
these two separate levels different colors are
7.1 Evaluation conclusion
used, Red for the federal level and general
information and blue for the case study. How
References
the different levels are interacting is described
Appendixes
in chapter 2.1. Down below is the expected
App 1. NPV Section 8 tenant based (NYCHA)
content for the p4/5 report. App 2. NPV Public housing (NYCHA)
App 3. NPV Section 8 project based (NYCHA)
App 4. Interview transcript
Abstract

Summery
1. General
1.1 Research framework
1.2 History of affordable housing US
1.3 Problem analysis
2. Policy analysis
2.1 US housing system
2.2 Tenant Based
2.3 Project Based
2.4 Tax credits
2.5 Transformation programs
3. Case study background
3.1 Why NYCHA
3.2 History of the NYHCA
3.3 Policy of the NYHCA
4. Case study numbers
4.1 Calculation method
4.2 Results of efficiency study
5. Case study Interview
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1.1 Research framework
Rationale needs increased by 69% (Steffen, Scientific relevance
In the United States exists a big group Carter, Martin, et al., 2015). With the At the moment public housing is
of worst case needs. This group consist demolishing of public housing facilities decreasing and the first LIHTC projects
of people who cannot afford decent and the first tax credit programs coming are coming to an end. The task of the
housing, or for whom simply decent to an end, the future of affordable future is to try to help as many people
housing does not exist. For the lower housing becomes even more uncertain. as possible who suffer under huge rental
income groups especially the extremely Worst case needs can be seen as the burdens. There are multiple ways to
l
a and very low income groups there demand for affordable housing in the counter this problem from as well the
are not enough housing units with United States. demand as the supply side, examples
r
affordable rents. of the demand side are; increasing
e
The Government started in 1930 with Social relevance minimum wage, creating jobs for the
public housing in order to provide In the United States the public opinion lower educated etc. A lot of research
n
affordable housing for the population, of public housing and nation wide has been conducted in these fields, how
e this was the working class at that time housing assistance has decreased since to avoid poverty in the society. However
(Goetz, 2012). However the governmental the 1970’s. This decrease in popularity not a lot of research is done on the
G budget has always proven to be has lead to a decrease in the available supply side. An easy answer could be
inadequate for the problem, over federal budget for affordable housing to increase federal funding on rental
the years more policies have been for the lower class. It is a vicious assistance programs and therefore the

. introduced to counter the worst case circle, poverty has got negative side supply. Since it will not be likely that the
1 needs such as “low income housing effects such as; criminality, school government would hugely change their
tax credit (LIHTC), project based rental drop out, starvation and segregation spendings this research is focusing on
assistance (PBRA) which exists of public people associate these side effects the cost efficiency of affordable housing
housing and housing vouchers(section with affordable housing unit sites, policies within the current financial
8), tenant based rental assistance(TBRA) which lowers the willingness to pay for constraints.
which exists of tenant based housing affordable housing units.
vouchers(Section 8). Unfortunately It is important to look at the current
these policies did not seem to provide The lack of funding and affordable restraints because they are not easily
enough affordable housing for all the homes is therefore a problem of the changed and do not depend on the
worst case needs. society as a whole and not just the specific welfare state. Christian Lennarts
people in need. Therefore this problem from the OTB Research Institute for
From 2001 till 2011 worst case is worth researching. Housing, Urban and Mobility Studies
8
at the Delft University of Technology wrote a a financial base as well as the governance the people that execute the policies and the
paper stating that a connection between types preference. people that make them. The people that
of welfare states and housing regimes cannot execute the policies are working for housing
clearly be identified (Lennarts, 2013). And Problem statement authorities or housing credit agencies.
that therefore similar welfare states can have Based on the rationale, the social and Although the different agencies influence each
different housing regimes. scientific relevance the upcoming problem other they still have got there own tasks in the
statement is formulated; affordable housing delivery.
In the United States of America spendings on “The United States is facing huge shortages in In order to give an answer to the research
welfare programs are not popular. According affordable housing which leads to worst case question both levels have got to be studied
to Inside Gov (2016), the government needs. The main issue of worst case needs is and analyzed. That is why this research is split
research site, the total spendings of the US rent burdens. Governmental solutions such in two parts.
Government in 2015 was $3.36 trillion of which as LIHTC (Low income housing tax credits),
about $40 billion goes to rental assistance PBRA (project based rental assistence) Part 1: Background
according to HUD (2016). ,TBRA(tenant based rental assistance) help Part one is the background of the different
but are insufficient to counter this problem. federal policies. Why and when they
According to Goetz (2012) the choice for the At the same time even the LIHTC contracts are introduced are an essential part in
different policies seems to come out of a come to an end and public housing is being understanding the goal of the policies. The
preferable governance, rather than a thorough demolished. The big task ahead is to create lack of affordable homes for the low income
research of costs. more affordable homes within the current households is the main drive to realize more
financial constraints. In order to do so the affordable homes.
This report will evaluate current policies and first step is to review the efficiency of current Subquestions here are:
research how cost efficient they are in serving policies.”
affordable housing units in order to give input • How big is the actual problem with
for the policy makers to improve their policies. Research question affordable housing?
The problem statement brings the following • How is the current affordable housing
There are tools applied in order to transform research question; system organized?
projects between policies, examples of these “What are the United states government most • What are the quantities and costs of the
tools are HOPE IV and RAD. Because the cost efficient* affordable housing policies?” different policies?
decision to introduce these tools was not • How do the federal transformation tools
based out of cost efficiency this research will *With cost efficiency is meant to research how work?
conclude if these tools are efficient comparing much federal funds have to be allocated in • How do the federal policy level and the
costs to the amount of affordable housing order to provide one affordable housing unit. executive level work together.
units.
Subquestions
This new information could be used by policy In the affordable housing regime of the
makers in order to base there policies on United States there is a difference between
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Part 2: Case study Constraints of research There are so many people in need of
The second part is an analysis of the • This research will focus on the decent housing and if this research
executive branch, here a more in depth quantity of affordable housing. will help policy makers to make
case study will be conducted. The case • This research will focus only on the decisions that improve the United
study is the New York City Housing federal policies in the United States. States housing regime that would be
Authority. This lower scale research • The research will only focus on the the ultimate personal goal.
brings more deep knowledge about, rental segment, knowing that there 3. Learning goal: To gain a great
how policies work in practice. The costs are also people in financial need in understanding and deep knowledge
and quantities of different affordable the freehold sector. of the US affordable housing
housing policies will be compared. • Only one case study will be policies, not just the numbers in
conducted knowing that this case reports but also know how the
l In the conclusion it will become clear study cannot be generalized for all practice field works and what they
a
how efficient the different federal housing authorities country wide think of the different policies. And
r policies actually are in the case study. especially considering the unique at the same time improve the skills
Subquestions: aspects of the New York City real and knowledge needed to conduct
e
• What are the quantities and costs of estate prices. The outcome can research.
n the different policies at the NYCHA? however be used as valuable
• How efficient are the federal policies information for similar situations. This report is written as an evaluation
e
in the case study? • Only federal policies that are of the different federal policies for HUD
• What is the policy and background executed by the NYCHA will be (the US department of Housing and
G
of the case study? compared, other federal policies will Urban Development). HUD is the federal
how ever be explained. policy maker for affordable housing and
The subquestions are all small puzzle can use the outcome of this evaluation
.
pieces, when they are being put Goal & product as input for further policy making
1
together a clear view arises on the There are different goals for writing this decisions.
efficiency of the different federal research.
policies in the case study. That whole 1. Scientific goal: To increase Conceptual model
puzzle will answer the research question. information and knowledge about The conceptual model gives a clear
Because the case study is a large the affordable housing system. view of what information is needed
housing authority conclusions can be This addition of knowledge will be to conduct this research and how that
used for similar cases and cities and can the relation between costs of the information is being used in order to
be used for the policy makers as input policies and the quantity of the give an answer to the research question.
for further improvement of the policies. affordable housing units that are in A prototype with fictive numbers can be
use because of this policy. found in Appendix 3: Prototype.
2. Personal goal: The personal goal
is to do something back for society.
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