Laws and Housing: The Importance of Policy in the Fight Against the Housing Crisis
Written By Francesca Lubega
Last year Boston’s Mayor Michelle Wu announced their Office to Residential Conversion Program to revitalize Downtown Boston by increasing its residential population. Remote and hybrid work models have left office buildings vacant; the program incentivizes developers to convert vacant spaces into much-needed housing.
The program offers developers tax credits that average 75% property tax-discount to create affordable housing. To qualify, 17% of the new housing must be restricted to a certain income, with 3% set aside for Section 8 voucher holders to qualify for tax credits.
This initiative is one of many actions the Boston Housing Authority (BHA) has taken to combat the growing housing crisis. In metro Boston, BIPOC households spent about 41% of their income on rent, while white households shelled out 33.5%, according to a Zillow report[GU1] . This statistic mirrors the troubling national trend where housing is unaffordable for a record half of all U.S. renters.
How did we reach this point? And what policies can be adopted to reverse the trend? In this blog, we’ll explore the roots of the housing crisis, examine the laws and regulations that shaped it, and highlight innovative solutions proposed by policymakers, economists, architects, planners, and other key stakeholders.
Table of Contents:
Understanding the National Housing Crisis
Historic Policies Shaping the Housing Crisis
Today’s State of Public Housing in America
Understanding the National Housing Crisis
There is a nationwide struggle with rising rents, homelessness and a lack of affordable housing. U.S. Department of Treasury graph (Fig 1.1) shows from 2000 to 2020, median rents rose significantly faster than median household income across the U.S. Similarly, a Harvard report notes,: since 2001 median rents have risen by 21%, while the median annual income for renters has risen just 2%. Across the country, millions of low-rent units priced at $600 per month or less have disappeared from the market, leaving families with few affordable options.
For many households, incomes are simply too low to afford the cost of rent to develop safe and sanitary housing without local government support. Without the help of state level governments subsidizing, preserving, and operating affordable housing, these developments are unfeasible. The federal Low-Income Housing Credit (LIHTC) Program has filled the gap left by the move away from local governments directly producing public housing. However, solving the crisis not only requires investment by federal and state governments, but also land-use and zoning regulations that support housing efforts.
Homeownership, once a symbol of economic stability, is out of reach for many Americans today. Renting was meant to be a net for those who couldn’t purchase homes, but as of 2022, a record number of renters spent more than 30% of their income on rent. The economic strain has led to an increase in young adults aged 25-34 living with their parents, a trend that has grown since the 2008 financial crisis. (Fig 1.2)
Percent of 25-34 year olds living with their parents
Historic Policies Shaping the Housing Crisis
The roots of today’s housing crisis lie in decades of policies that shaped homeownership, affordability, and access. For much of the 20th century, systemic barriers like redlining and racial deed covenants excluded minority communities from housing opportunities; despite later reforms, funding cuts and restrictive policies have made affordable housing increasingly difficult to sustain.
1. Efforts to Combat Discrimination and Expand Housing Access
1968 Fair Housing Act (FHA): Part of the Civil Rights Act, this law aimed to eliminate housing discrimination.
1965 Creation of HUD: The U.S. Department of Housing and Urban Development (HUD) was established to promote affordable housing and urban development.
1974 Housing Choice Voucher Program: Provided rental assistance to low-income families but faced challenges as many landlords refused to accept vouchers.
2. Shift Toward Private Sector Solutions
1986 Low-Income Housing Tax Credit (LIHTC): allowed banks and private companies to purchase federal tax credits and direct profits towards affordable housing, becoming a key funding source.
· 1992 HOPE VI Program: Intended to replace run-down public housing with mixed-income developments, but instead it led to the destruction of low-income units, with private developments replacing needed public housing.
3. Funding Cuts and Restrictions on Public Housing
1976 HUD Budget Cuts: The Reagan administration slashed HUD funding by over 50%, significantly reducing critical investment in affordable housing.
1999 Faircloth Amendment: Capped public housing at 1999 levels, making it illegal for the federal government to build new public housing.
The 1999 Faircloth Amendment is the most significant barrier to public housing construction today. This amendment capped the number of public housing units at their 1999 level, shackling local communities by preventing them from building or funding the development of more public housing
Today’s State of Public Housing in America
Today, affordable housing is subsidized through a mix of public and private partnership; however, demand has far outpaced the federal government’s ability to fund it. With budget cuts, public housing has not been maintained properly and requires $70 billion in repairs to make units safe and habitable [1] – a gap that continues to grow as buildings deteriorate.
According to the National Low Income Housing Coalition, 10,000 to 15,000 public units are demolished annually due to poor conditions. However, these units are rarely replaced with equivalent affordable housing, leaving families with fewer options and increasing pressure on an already strained market.
To address this, the Rental Assistance Demonstration (RAD) program has become a key strategy for preserving and expanding affordable housing options. Since its expansion in 2019, RAD has converted 455,000 units by leveraging public-private partnerships to fund renovations and sustain affordability.
While programs like RAD offer solutions, they highlight a larger issue: affordable housing remains heavily dependent on limited government subsidies. Without increased investment and systemic reforms, public housing will continue to shrink, and the nation will continue to face a growing crisis where the most vulnerable households continue to be underserved.
Transforming laws and proposed solutions
To tackle the housing crisis, cities and policy makers are reimagining traditional approaches. Minneapolis, for example, eliminated single-family zoning in 2020, allowing for the construction of duplexes and triplexes in areas previously restricted to single-family homes. This shift aims to increase housing density and provides a model for other cities.
Community Land Trusts (CLTs) are a promising solution which was first created in 1969 by southern black farmers and civil rights activists. CLTs are nonprofit organizations that acquire land and remove it from the real estate market, imposing resale restrictions to ensure permanent affordability. Homes on CLT land are then rented or cooperatively owned and any profits are reinvested in the community rather than funneled to private developers. CLTs shift the balance of power in home purchases and keep housing affordable for low-mid income households.
Another solution is lowering construction costs and shortening project timelines by making housing development more efficient. Innovations such as prefabrication and assembling components off site before transportation reduce labor costs and speed up the construction process.
Funding on a federal level remains a significant challenge, with the HUD facing severe budgetary threats under the Trump administration which has proposed drastic cuts to HUD’s workforce and funding. Proposals include slashing budgets for affordable housing programs like the Housing Choice Voucher program and the Fair Housing Division. The uncertainty surrounding the future of these programs has created widespread anxiety, as many fear that further reductions could undermine efforts to combat the housing crisis. The future of initiatives like the Housing Trust Fund (HTF), which provides block grants to states for building and preserving affordable housing, remains uncertain.
Conclusion
The housing crisis is a complex challenge that requires policy changes, innovative programs, and sustained investment. Adaptive laws, like Boston’s Residential Conversion and Minneapolis’ zoning improvements, demonstrate how cities can reshape outdated regulations to encourage affordable housing development.
No single approach can solve the crisis. Addressing housing affordability isn’t just about shelter—it’s about strengthening communities, supporting economic growth, and ensuring that all people have access to safe and stable housing. The path forward requires collaboration between policymakers, developers, and local communities to build a housing system that works for everyone.