The Real Housing Issue

June 2018
By Mark Funkhouser  |  Former Publisher
Former publisher of Governing and former mayor of Kansas City

Despite what you might think given recent media coverage, the U.S. city with the worst affordable housing problem is not San Francisco. Far from it. When you rank cities by median gross rent as a percentage of household income, San Francisco actually does very well, coming in at No. 582 on a list of 600 cities, according to Census data. Aside from a few college towns, most of the cities experiencing an affordable housing crisis are those that are struggling in today’s economy. Flint, Mich., for example, is No. 9. Its households pay a median of 42.2 percent of their income for rental housing.

There are two primary culprits in the housing affordability crisis: the cost of housing and the amount people earn. The latter is the bigger driver, as data cited by Jenny Schuetz of the Brookings Institution illustrates. Applying the standard that housing should consume no more than 30 percent of household income “implies that renters in the lowest income quintile can only afford to spend $310 per month on rent,” Schuetz writes, adding that “the decline in cash income for the bottom quintile over the past 15 years exacerbates this challenge.”

Policies that aim to give workers more of a share of increases in business productivity and gross domestic product would have to be largely national in scope -- despite many laudable local attempts, such as minimum-wage increases and living-wage ordinances. But there’s no evidence such policies are coming anytime soon. Therefore, state and local leaders concerned about housing affordability need to use other tools at their disposal, such as land use policies.

What’s more, Schuetz and Cecile Murray argue in another recent Brookings report that we must acknowledge that “we can’t indefinitely rely on new construction of low-density, single-family housing.” As Governing’s Liz Farmer reports in this issue, California state Sen. Scott Wiener is trying to turn that attitude around. Not surprisingly, his legislation to override local zoning limits to allow high-rise housing near transit stations has stalled in the face of powerful opposition.

We may be several decades into the 21st century by the time we have housing policies that fit today’s circumstances, but it will happen. The rising generation of voters will see to that. A recent Politico article on the Seattle housing market laid out the plans of young activists to change the rules by changing the rulemakers in this fall’s municipal elections. Those activists may not win this year, but smart leaders see the future coming and find ways to accommodate it.