Affordable Housing Policy Frameworks

The hard truth: the market for million-dollar “starter” homes and high-margin luxury rentals is tapped out. You can see it—rents sliding, new-home sales stalling, and sites going quiet as builders lay off crews. https://lnkd.in/gPCZaFBW This is what happens when we outsource housing policy to the private sector. They build where the margins are fattest—because that’s what they’re designed to do—and leave the rest for “someone else” to figure out. For three decades, nobody was that “someone else.” The feds stopped building affordable housing in the ’90s, and we lost a critical part of the mix—even though plenty of fully employed people can’t afford the returns private projects require. Now the reckoning: soaring need, but too little of the housing we actually need—homes people can afford. So let’s change the playbook: - Bring public and non-profit builders back—at scale—with long-term, low-cost capital. - Tie every incentive (fees, taxes, density) to verifiable affordability outcomes. - Use public land for housing first and lock in affordability for the long term. - Standardize and fast-track as-of-right designs for the missing middle and rental. - De-risk construction cycles (bridge financing, bulk procurement) so crews keep working when the luxury market cools. - Innovate to cut costs: adopt modular/panelized construction, repeatable building systems, and pre-approved plan catalogues to collapse timelines and overhead. - Stop pretending fee cuts are a silver bullet: development fees fund the pipes, parks, transit and fire trucks that new homes need. If fees are reduced, make it contingent on deep, enforceable affordability—not blanket discounts. If we want different results, we need a different system—one that builds for people, not just pro formas, and one that uses technology to deliver more home for every dollar. #HousingPolicy #AffordableHousing #ModularConstruction #IndustrializedConstruction #CityBuilding

Improving Housing Affordability Institutional investors should not own homes—people should own homes. But the debate often misses key context: About 46 million U.S. households rent. Roughly 14 million of those households rent single family homes. Institutions own fewer than ~600,000 single-family rental homes—under ~2% of U.S. rental housing. So why is the conversation so polarized? Because affordability is real. Inflation has raised the floor on construction and replacement costs (land, materials, labor). Inflation is not nominal, it is cumulative (David Solomon). Higher interest rates have turned monthly payments into a barrier even for qualified households. Add to that “bad landlord” anecdotes and media soundbites—and we end up debating villains instead of building solutions. What’s often missing is a practical, market-compatible policy agenda that helps more Americans become homeowners—without compromising entrepreneurship or the basic mechanics of a capitalist economy. I don’t believe there’s a single silver bullet here. But there are several targeted moves that could materially expand access to ownership—especially for first-time buyers. Here are a few proposals to kickstart the discussion: 1. Reduce the mortgage insurance burden: waive mortgage insurance premiums for mortgages with 10%+ down (vs. the effective 20% threshold today). MI often adds meaningful cost to the effective mortgage rate, and down payment remains the single biggest barrier to entry. 2. Enable CRA incentives toward households, not just “low-income neighborhoods”: grant CRA credit to banks for lending to applicants under $150,000 in household income (indexed to local cost of living) so qualified, income-eligible buyers aren’t excluded by zip code. 3. Create a one-time, first-time homebuyer tax credit: a $10,000 credit to offset down payment and closing costs. If we can use the tax code to accelerate EV adoption and energy efficiency, housing deserves similar priority. 4. Increase the primary-residence capital gains exemption to $1 million to encourage mobility and unlock inventory. This won’t help every first-time home buyer immediately, but it can reduce the “golden handcuffs” effect and improve supply. 5. Stabilize property taxes for first-time buyers: allow first-time buyers to use the seller’s assessed value for 10 years. This would improve payment predictability. 6. Lower mortgage rates by allowing Fannie/Freddie to issue tax-free bonds whose proceeds are used to buy down mortgage rates for first time home buyers. This list isn’t exhaustive—I have more ideas—but I’d rather open the floor. It’s time we treat housing affordability as a shared responsibility. What policies—pragmatic and market-compatible—do you think would meaningfully increase homeownership access over the next decade? #HousingAffordability #Homeownership #HousingPolicy #FirstTimeHomebuyer #MortgageRates #SingleFamilyRental #SFR #AffordableHousing #EconomicMobility

Metro Manila home prices are 19.8x median income for condominiums, 33.4x for townhouses, making the capital one of Asia's least affordable cities. The fundamental challenge? Traditional homeownership models tie land appreciation directly to housing costs, making homes increasingly unaffordable over time. When families can't build wealth through homeownership, entire communities suffer economically. Community Land Trusts offer a proven alternative that's worked globally for decades. In Burlington, Vermont, CLTs have maintained affordability for over 35 years while families still build equity. Singapore's HDB system (essentially a government-scale CLT) houses 80% of the population affordably. Barcelona uses CLTs to combat gentrification while preserving community character. What's a Community Land Trust? → Community steward holds land permanently → Families own homes through 99-year ground leases → Resale caps maintain affordability forever → Land appreciation stays with the community How it could work in the Philippines: → Housing cooperatives hold land under existing law → Community Mortgage Program structures for community land acquisition → SHFC (Social Housing Finance Corporation) financing mechanisms already in place → LGUs contribute land through usufruct agreements The beauty lies in the mechanics: the community steward retains land ownership while families build equity in their homes through ground leases with carefully structured resale caps. This creates sustainable partnerships that advance both public policy goals and private sector delivery capacity. Unlike pure rental models, families accumulate wealth. Unlike traditional ownership, affordability persists across generations. If you're a developer, LGU, or just an affordable housing advocate, let's have a chat. I believe CLTs represent the structural innovation our industry needs to deliver on both profitability and social impact objectives.

If the next President invited you to join a task force setting rental housing policy to increase supply and improve affordability, what would you advise? I asked this question to two men who belong on such a task force – David Brickman and Hugh Frater, the former CEOs of Freddie Mac and Fannie Mae, respectively. I learned a ton from both of them (and you can see/hear their full answers on the most recent two episodes of The Rent Roll podcast). Here are 5 (out of many) highlights. 1) Empower Fannie and Freddie to provide construction capital. Today, the GSEs can only lend on stabilized apartments, not new construction. Frater said: “Where the federal government can help is lowering the cost of capital and ensuring more projects will pencil.” Brickman proposes allowing the GSEs to offer a construction-to-permanent loan program. Others (like Bob Simpson) have proposed a hybrid structure where the GSEs could inject preferred equity to help close the financing gap. 2) Protect Fannie and Freddie from politicization and scope creep through new operational requirements (i.e. rent control) attached to loans. Brickman said it “could start to push some borrowers away, and that undermines the potential effect” of the GSEs in encouraging supply. Brickman pointed out a comparison point on the single-family mortgage side with FHA loans, where some lenders won’t offer them due to concerns about potential compliance issues and risk of “getting on the wrong side of the government.” Frater, for his part, noted that it’s not unfair to attach some reasonable requirements to federal subsidies, but the risk of installing policy platforms through the GSEs “is an argument for getting them out of conservatorship.” 3) Brickman proposed establishing a model to renovate aging apartments (including expiring tax credit deals) while preserving affordability. Today, investors have limited options with older apartments. If you renovate it to modern standards, you risk displacing residents. If you don’t renovate it, you risk being labeled an “absentee landlord.” 4) Focus on programs that create more affordable and workforce housing. Brickman suggested expanding LIHTC to include moderate-income workforce housing and also providing federal support to state and local affordable housing preservation/creation programs. Frater said any new programs should be simple, useable, deficit neutral and focused on supply. 5) Reform existing programs to maximize the impact. Frater called out leakage in Section 8 vouchers plus city approval processes that drive up costs to build housing. “Our objective should be to maximize the number of units produced per dollar of tax credit. That might mean in some places, like California, that unless they change their permitting and approval requirements, there may not be housing built.” There's a ton more in each of the two podcast episodes (links in comments). Deeply grateful for Hugh and David, and I hope our next leaders heed their guidance.

Tuesday I walked through why 60% AMI is the math floor. Today: what that means for the families at 30-50% AMI who are actually unhoused, and for rural development where everything is harder. 30-50% AMI deals need layered subsidy. LIHTC alone doesn't reach 30% AMI. Standard 60% AMI math doesn't go deeper without additional capital. To serve a 30% AMI family at a sustainable rent (~$650/month in a typical market), the deal needs OTHER federal and state subsidies layered on top of LIHTC: — Project-based Section 8 (PBV / PBRA) — ongoing operating subsidy that lets rents go to 30% AMI without breaking the construction math — HOME Investment Partnerships funds — federal flexible gap financing — State and local trust funds — soft loans, often forgivable, at 0-2% interest — HUD Section 811 / 202 — supportive housing for special needs and seniors — Federal Home Loan Bank AHP — competitive grants A "deeply affordable" project (real 30% AMI units) is typically 4-7 layered subsidies. Each has its own timeline, compliance regime, and reporting. The complexity IS the cost of going deeper. Rural development: the math gets harder. LIHTC works in rural counties, but barely. USDA Section 538 (multifamily guarantee) and Section 521 (rural rental assistance) layer with LIHTC to make the math work. State QAPs typically include rural set-asides — 10-30% of credit allocation reserved for non-MSA projects. Rural is harder because: — Rural AMI is lower, so rent caps are lower, so deal math is tighter — Construction costs are similar to urban (sometimes higher due to logistics) — Operating costs spread across fewer units (smaller projects) — Lender appetite is weaker — rural multifamily isn't a hot asset class — Ongoing operations are harder — turnover costs, vacancy, vendor availability The result: rural affordable housing depends entirely on USDA programs running parallel to LIHTC. When USDA Rural Development gets a budget cut, the rural pipeline dies. That's been the story in 2024-2025. The "blended" project is often the right answer. Income averaging allows a "blended" 60% AMI. Some units at 30, some at 50, some at 60, some at 80. So long as they average to 60%, the whole project qualifies for tax credits. There's also no rule that 100% of units have to be tax credit eligible — partial deals are common. Many cities with inclusionary zoning use this: some affordable, the rest not. In practice, the developer sets aside units at 30% AMI and works to secure PBV (Section 8) on those units. The voucher pays the gap, so the property collects something closer to market rent. The blended model is what lets the developer put 80% AMI units in to balance the average. They aren't playing games to make more money. They're just trying to get rents high enough to get the deal to pencil. Tomorrow I close the week with what LIHTC does that no other tool replicates. What's the layered subsidy you've used most often?

The latest housing research reinforces a point many of us in the sector have understood for some time. We will not resolve the housing crisis through private market delivery alone. The long standing policy assumption has been that increasing overall housing supply, particularly through private development, will improve affordability over time. This trickle down approach has shaped national policy for decades. Yet the evidence increasingly shows that this premise is flawed. Shelter’s recent report Build Up Not Trickle Down: The Case for Need Led Housing Policy, highlighted via Thinkhouse, is particularly compelling. It draws a clear line between housing supply and housing need, and demonstrates that the two have not been aligned in any meaningful way. The key issue is this. Private housing supply is driven by market demand and viability, not by social need. Developers will build where returns are strongest, not where deprivation is deepest. Even where supply increases, it does not necessarily translate into affordability for those on lower incomes. Instead, we often see price resilience, land value inflation, and product targeted at higher value segments. The research highlights several critical learnings that deserve serious attention: First, the elasticity between private supply and affordability is weak. Increased output has not delivered proportionate improvements in access to housing for those most in need. Second, housing need is structurally different from housing demand. Need is rooted in income, security, and access. Demand is shaped by purchasing power. Conflating the two has led to systemic under provision of genuinely affordable homes. Third, reliance on cross subsidy through private development has limits. In weaker markets it fails entirely. In stronger markets it can distort tenure mix and still not deliver at the scale required. Fourth, countries with sustained investment in social housing show stronger outcomes in affordability, stability, and resilience. From my own experience across delivery, regeneration, and operations, this resonates strongly. Market led delivery cannot meet the full spectrum of housing need. It plays an essential role, but it is not sufficient on its own. If we are serious about addressing the housing crisis, the implication is clear. We need a decisive rebalancing towards need led housing policy, with social housing at its core. That means long term investment, funding certainty, and a strategic commitment to delivery at scale. This is not about ideology. It is about evidence and outcomes. #ukhousing #housebuilding #socialhousing #affordablehousing #urbanplanning https://lnkd.in/ejQyPn5Q

For the past decade, housing policy has been dominated by the search for “transformational” solutions to the affordability crisis. Some have helped. But too many have made headlines, absorbed public dollars, and failed to deliver at scale. Bob Simpson’s latest piece is a useful reminder of something housing practitioners understand well: affordability is built on math, not magic. Property tax abatements are among the least glamorous tools in local government, and also among the most effective. When rents are restricted, development costs have to come down or the deals don’t work. Property taxes are often one of the largest fixed operating expenses in multifamily housing. Reduce that burden, and suddenly projects pencil that otherwise wouldn’t. Homes get built. Affordability endures. What makes this article especially compelling is how clearly it connects abatements to outcomes policymakers actually care about: lower rents, reduced reliance on direct subsidy, increased investment, and economic benefits. This isn’t theoretical. Cities like San Antonio, Buffalo, and Dallas are already proving it works at scale. There’s no silver bullet for housing, but there are proven levers. We should spend less time innovating for innovation’s sake, and more time scaling the tools we already have. Worth the read. https://lnkd.in/eM7aUiGp

Zohran Mamdani might become NYC’s most influential housing developer. Not through REBNY. Not through private equity. By winning the mayor’s race. Here’s what that means for real estate: A $100B commitment to build 200,000 new affordable homes. → Triple the city’s current pace → 100% rent-stabilized → Publicly financed and union-built A four-year citywide rent freeze. → Stabilized tenants (over 2.4M people) would see 0% increases → Mayor appoints 9 Rent Guidelines Board members, enough to make it happen A NYCHA overhaul. → Double NYC’s capital spend on public housing repairs → $40B+ backlog in heating, plumbing, elevators, and roofs → New social housing on NYCHA land—without selling it off Major zoning reform. → Citywide plan to upzone low-density neighborhoods → Eliminate parking minimums → Fast-track 100% affordable projects Aggressive tenant protections. → Centralize enforcement of housing code violations → Name-and-shame negligent landlords → Push for Good Cause eviction to cover unregulated tenants And for homeowners? → A new Office of Deed Theft Prevention → Investigate fraud, stop equity theft in BIPOC neighborhoods → Push to abolish the tax lien sale The throughline: Mamdani sees housing as a public good, not a commodity. If he wins, NYC housing policy shifts from private incentives to public production. From market-led planning to mission-led development. From landlord-first governance to tenant-first protection. What this means for sponsors, developers, and investors: • Public competition for land and capital will increase • Rent-stabilization could expand to new buildings • “Affordable” won’t just be a checkbox—it will be the project • The 421a replacement fight gets more complicated • Tenant organizing will have institutional support This is the biggest philosophical pivot in NYC housing since 1968. We’ve seen mayors influence real estate before. But never like this. 👇 Curious: If Mamdani wins, how would this affect your strategy in NYC?

For decades, affordable housing policy has chased silver bullets. Sometimes, the most effective solutions are the ones we already have. Property tax abatements - one of the oldest tools in local government -consistently make affordable housing deals pencil by lowering fixed operating costs that support long-term affordable rents. In this week's edition of the Affordable Housing Handbook, we highlight recent research from the National Multifamily Housing Council that shows how tax abatements make housing more affordable and grow local economies. Cities like San Antonio, Buffalo, and Dallas demonstrate how clear rules, long-term rent restrictions (not rent control), and simple program design can attract private capital, reduce reliance on direct subsidies, and deliver thousands of affordable units at scale. The takeaway is refreshingly practical: stop chasing waterfalls. Use the tools that already work.