The Squeeze is on for Affordable Rentals in the Suburbs

  • 2
  • February 20, 2014

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By Barbara Ray

Families move to the suburbs for better schools, bigger yards, and safer streets. But increasingly, they’re finding it hard to pay the rent.

With an additional 3 million households cast into the rental market after the housing crisis, demand is outstripping supply and rents are jumping. In some suburbs of Boston, rents rose upwards of 14 percent in 2012. Median rents are hovering around $2,000-2,500 a month. In the suburbs of Chicago, rents have risen so much that in some communities developers are going on a building binge after a ten-year dry spell. The median rent for a suburban apartment there is now about $958 a month for one bedroom and $1,152 for two.

Obviously, a $10 an hour job doesn’t go far with those rents.

Today, a stunning one-half of all renters, or about 21 million people, spend more than 30 percent of their income on housing, a traditional measure of housing affordability. That’s a new high, according to a new report by the Joint Center for Housing Studies, which also found that the issue of affordability is increasingly a suburban one. Today, 40 percent of renters are in the suburbs. In general, suburban renters are more likely to be parents and slightly older than city renters. Suburban rentals are more often single-family homes or larger apartment complexes.

Clearly, the nation needs more affordable housing. Researchers at the University of Minnesota go one step further and argue in a new report that federal funding is not meeting the need. In their case, they argue that too much federal funding for affordable housing is going to Minneapolis and St. Paul neighborhoods at the expense of fast-growing suburbs. That’s not because there’s no demand. The study found that in one suburban county near Minneapolis more than 9,000 people are on wait lists for affordable housing. Yet the majority of affordable housing units in the region continue to be built in the city. In part, the focus on urban housing stems from the regional Met Council’s emphasis on locating affordable housing near transit lines to ensure connectivity. Many suburbs lack transit access, and thus end up missing out on affordable housing opportunities even if they want to develop more affordable units.

“It deprives families the opportunity to go to low-poverty, high-performing schools, if you build it all in very poor neighborhoods,” the study’s author, Myron Orfield told Minnesota Public Radio. “And it makes places like Minneapolis and St. Paul, which are already very racially segregated, over time more and more likely to house a larger percentage of the region’s poor population.”

Part of the issue has always been one of exclusionary zoning restrictions that suburban jurisdictions have favored. The restrictions, for example, bar large lots (where large apartment complexes could be built) or restrict multi-unit housing. Often these regulations are thinly veiled efforts to keep the poor—and the crime they are thought to bring with them—in the city, as Dan Rodricks argues in an op-ed about Baltimore County’s opposition to a $13.7 million housing development for low-income families in eastern Baltimore County.

In part as a reaction to these restrictions, policymakers in some areas of the country have created inclusionary zoning policies, which mandate, or at least encourage, developers to build a proportion of homes in market-rate developments that can be sold or rented at below-market rates. More than 500 localities in the U.S. have inclusionary zoning policies. Yet these programs largely target owners, not renters.

For renters, two federal programs help millions of households each year access affordable options, and both are increasingly being used in suburban communities. According to a Brookings analysis of HUD data, in 2008 the nation’s 100 largest metro areas contained 1.1 million affordable units created through the Low Income Housing Tax Credit, a dollar-for-dollar tax reduction to investors who develop affordable rental housing, and half of those units were in the suburbs. In addition, recent research found that the Housing Choice Voucher program, a federal program that has grown over the last decade and that offers recipients portable subsidies in private, market-rate housing, served 3.4 million residents in that same year, half of whom lived in suburbs.

Expanding affordable housing in the suburbs seems smart, especially as suburban poverty rates increase.  But “more” is not enough. Where affordable housing is located matters too. Some developers are building affordable housing in unincorporated, far-flung areas with limited services and infrastructure, creating a different form of isolation for poor families. Many Housing Choice Voucher recipients end up in lower-opportunity suburbs, farther from jobs and good schools. While in the past, poor families were isolated in declining neighborhoods in central cities, today an increasing number may be isolated in out-of-the-way suburban developments.

Going forward, planners and policymakers must pay attention to the risk of re-segregation. In the suburbs, affordable housing must be located in areas that afford families access to high-performing schools and good jobs or we risk recreating the same trap of inner-city poverty. Likewise, they must work to create more economic opportunity in struggling suburbs that already have high concentrations of affordable housing.

Whatever the answer, the top-line issue is clear. The nation needs more affordable housing for its hard-working families, wherever they may live. The triple whammy of a foreclosure crisis (which is not over yet), long-term wage stagnation, and rising rents has left far too many families struggling to make ends meet.

Photo/hmclaird

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