Access to safe, quality affordable housing is one of the most basic needs, yet for far too many low- and moderate-income families, finding affordable housing can be an insurmountable challenge.
The shortage of affordable housing options is an issue of increasing national importance. A confluence of macroeconomic factors like demographic shifts increasing the demand for rental housing and stagnant wages, coupled with the expiration of affordability restrictions on subsidized properties and an aging affordable housing stock has created a bleak outlook for housing affordability.
Over the past decade, wages have stagnated for most low- and moderate-income workers while rents have steadily risen. The Census Bureau found that poverty levels in the US remain persistently high with no significant decline in the past four years even as the economy shows signs of rebounding. At the same time, the supply of affordable housing coming online is not meeting the needs of low and moderate income communities. New multifamily housing units are primarily built for the high end of the market, with a median asking rent equaling $1,290 in 2013, or about half of the typical renter’s monthly household income, resulting in an unprecedented affordable housing crisis.
As a result of these stagnant wages and rising housing costs, the number of cost-burdened renter households spending more than 30 percent of their income on housing costs increased among all income groups between 2001 and 2014. Among the lowest income households, more than 70 percent were severely cost burdened (spending more than half their income on rent) in 2014.
CDFIs across the country are stepping up as key partners in the affordable housing market: responsible lenders who offer credit, capital, and financial services to promote sustainable homeownership; counter predatory products and services; develop affordable multifamily and rental housing; and pioneer innovation in financing in shared-equity housing and manufactured housing markets. The CDFIs in OFN’s network alone cumulatively developed or rehabilitated more than 1.5 billion housing units through fiscal year 2014.
Continued support for programs like the Capital Magnet Fund, National Housing Trust Fund, Low Income Housing Tax Credits, HOME program, as well as the flexible capital provided through the CDFI Fund’s Financial Assistance program, are critical financing tools CDFIs use to address our nation’s continued housing finance challenges
However, many CDFIs still lack access to the capital markets supported by the housing finance system. In part because of this lack of access, CDFI housing lenders are experiencing liquidity challenges that inclusion in more mainstream sources of housing finance could help solve.
As we prepare to head to Capitol Hill for our 6th annual Advocacy Day, OFN and our Members will advocate for continued funding of these existing resources. We also look forward to working with federal policymakers to identity even more ways to catalyze affordable housing development in the communities that need it most.