January 29, 2019
How Technology Could Help Address Housing Challenges, Continuing Impact from the Shutdown
A daily roundup of news impacting housing and communities. Not receiving the Community Developments daily email yet? Sign up here.
- An article in the New York Times looks at how technology could help address housing affordability challenges. Matt Hoffman, vice president for innovation at Enterprise Community Partners, notes that Enterprise is seeking partnerships with tech companies with ideas that could change the market, such as new models between renting and ownership or squeezing new supply out of the housing that already exists. Hoffman also explains that Enterprise recently began to invest in early-stage tech start-ups themselves. Enterprise and MetaProp, a firm focused on “proptech” investment, advisory and startup acceleration, have announced a partnership to inject capital into early-stage companies with technology-enabled solutions that have the potential to improve housing affordability, through platforms that could tap into existing underutilized assets. Visit our website for more information on Enterprise’s HousingTech work.
- NBC News points out that although the partial shutdown is over, its consequences are still being felt by lower-income renters. During the shutdown, thousands of low-income households across the country were “frozen out of the Section 8 voucher program, prohibited from accessing public subsidies to private landlords who rent to about 2.2 million families.” Last month HUD notified public housing authorities (PHAs), which administer its Section 8 program, that it could only guarantee funding for housing vouchers through the end of February. This step made some PHAs reluctant to move forward with issuing new vouchers they soon might not be able to fund. In addition, while federal workers went back to work at HUD yesterday — 95 percent of them had been furloughed during the shutdown -- the National Housing Trust Federal Policy Director Ellen Lurie Hoffman notes that “it is going to take a time for them to clean up the wreckage and get the money out the door.” (NBC News, January 29)
- An analysis by Zillow looks at the income gap among homebuyers, existing homeowners and renters. The typical homebuyer in 2017 earned 6.5 percent more in household income than the typical homeowner. The gap in median household income between buyers and owners amounts to about $5,000 a year -- in some markets this gap is more than twice that. Zillow points out that the disparity “underscores how much more expensive housing has become for buyers, and the difficulty faced by renters looking to become homeowners in high-demand markets.” For example, in 2017 Dallas’ typical new buyer household earned almost $12,000 more than the typical homeowner. The study shows that the typical homebuyer earns twice as much as the typical renter household -- in some metros, the gap is almost three times. In 2017, the U.S. median household income was $79,900 for buyer households compared to $38,300 for renter households. (Zillow, January 29)
- The Washington Post reports that Senate Majority Leader Mitch McConnell (R-KY) joined Sens. Charles E. Grassley (R-IA) and John Thune (R-SD), members of the Senate Finance Committee, in proposing a plan to repeal the federal estate tax, which is expected to be paid by small number -- fewer than 2,000 a year – of the wealthiest households. Last year’s Tax Cuts and Jobs Act weakened the federal estate tax, exempting all estates worth less than $11.2 million and allowing couples with $22 million to pass on their estates without facing the tax. (The Washington Post, January 28)
In Case You Missed It
- On January 16, the House passed a disaster appropriations supplemental bill 237-187 (H.R. 268) to provide $12.1 billion for disaster recovery in areas affected primarily in 2018. The bill includes $1.21 billion for HUD’s Community Development Block Grant – Disaster Recovery (CDBG-DR) Program. While these funds are primarily for areas affected by disasters in 2018, the bill sets aside $150 million for areas affected in 2017. The bill would also permit HUD to allocate any remaining funds to mitigation activities, after all unmet needs have been addressed.