Whither Workforce Housing?

Article excerpt

ABSTRACT

The last forty years have marked a dynamic era in affordable housing. During this time, affordable housing shifted from being largely government-owned to privately-owned, though certainly supported by government efforts. This evolution thus marked a distinct switch from a supply-side approach to a demand-side approach to affordable housing. As states and localities adapted to this paradigm shift, some high-priced metropolitan regions discovered that their housing markets were squeezing out middle-income service workers, such as police officers and teachers. In response, many localities--and some states--adopted various laws and policies to spur the creation of workforce housing: that is, moderately-priced housing that is affordable and desirable for these middle-income workers. These types of efforts seemed--and, indeed, were-necessary for these metropolitan areas when the housing market was at its peak in the mid-2000s. However, with the Great Recession came a bursting of the housing bubble, and home prices dropped dramatically all around the country. With the correction in the housing market, the continued need for workforce housing programs is less clear. In the context of the changes in affordable housing, this article seeks to analyze workforce housing's place in the affordable housing landscape and explore the need for workforce housing in the future.

TABLE OF CONTENTS

Introduction
 I. Affordable Housing: A Forty-Year Retrospective
      A. Public Housing: The Supply Side Approach
      B. Privatization: The Demand Side Approach
         1. Section 8
         2. Community Development Block Grants (CDBG)
      C. Expansion of Demand Side Affordable Housing
         Efforts
      D. State and Local Government Efforts
II. Workforce Housing
      A. Inclusionary Zoning
      B. Land Trusts and Housing Trust Funds
      C. Incentives: Grants, Loans, and Tax Credits
      D. Employer-Assisted Housing
Conclusion

INTRODUCTION

The last forty years have seen a dramatic evolution in affordable housing efforts on the local, state, and federal levels. Many early affordable housing efforts began as public efforts--that is, government entities built, owned, and managed public housing buildings for low-income individuals. (1) As these forms of public housing became too expensive for governments, affordable housing initiatives turned to the private sector. (2) These efforts consisted largely of governments releasing their control over affordable housing by lessening restrictions that prohibited or hindered private sector involvement. In this regard, governments attempted to incentivize private sector construction and maintenance of affordable housing. (3) This evolution marked a philosophical shift from a supply-side approach to affordable housing to a demand-side approach as governments went from directly providing affordable housing to giving low-income families and individuals vouchers, certificates, or other subsidies to increase their buying (or renting) power, thus allowing them to participate in the affordable housing market. (4)

As the various types of affordable housing programs took root, some expensive metropolitan areas found themselves struggling with housing for middle-income workers: police officers, firefighters, teachers, health care workers, retail clerks, and the like. These workers could not afford to purchase or rent homes close to their jobs and thus had to travel long distances to work, which took an economic and emotional toll on their families and their lives. These major metropolitan areas saw the problems caused by such circumstances and attempted to create workforce housing for these middle-income workers. (5) In response, some states and many local governments (6) adopted workforce housing initiatives through inclusionary zoning laws, a reduction in regulatory barriers, the creation of housing trust funds, the provision of "gap funding" measures, and incentives for employer-assisted housing initiatives. …