Thursday, May 19, 2016

Housing Inadequacy Remains a Problem for the Lowest-Income Renters

Irene Lew
Research Analyst
In the early 1970s, in response to growing concerns about the housing conditions of poor families, the US Department of Housing and Urban Development (HUD) developed a measure of housing adequacy for its American Housing Survey (AHS) that continues to be used by the agency today. This adequacy measure was originally designed to evaluate the extent to which the national housing stock met the standard of “a decent home and a suitable living environment” established by the Housing Act of 1949. While the condition of the housing stock has improved over the past several decades, the rental stock is still three times more likely than the owner-occupied stock to be considered inadequate. And problems persist among the most affordable rentals.

While fairly complex, the AHS adequacy measure factors in various housing problems related to plumbing, heating, electrical wiring, and maintenance. Using this AHS measure, the majority of the nation’s rental housing stock is in physically adequate condition. As of 2013, just 3 percent of occupied rental units were categorized as severely inadequate and 6 percent were moderately inadequate. In fact, the adequacy of the rental stock has improved over the past decade, with the share of rentals categorized as physically inadequate declining from about 11 percent in 2003 to 9 percent in 2013. 
Figure 1: click to enlarge
Notes: Inadequate units lack complete bathrooms, running water, electricity, or have other deficiencies. 
Source: JCHS tabulations of HUD, American Housing Surveys.

Stricter building codes have certainly helped to encourage higher quality, particularly the construction of units with complete plumbing and heating systems. As a result, severe physical deficiencies have been rare among the rental stock, especially among newer rentals. Just 1 percent of rentals built 2003 and later was classified as severely inadequate, compared to 4 percent of those built prior to 1960.

It is noteworthy, however, that the AHS adequacy measure does not account for certain health-related quality issues such as the presence of mold or structural issues such as holes in the roof or foundation, so housing quality problems may in fact occur at higher rates than the survey reports. And although physical deficiencies have become less common among the nation’s rental housing stock, housing problems disproportionately appear in units occupied by the lowest-income renters. In 2013, 11 percent of units occupied by extremely low-income renters (those with incomes less than or equal to 30 percent of area medians) were physically inadequate, compared to just 7 percent of those with incomes above 80 percent of area medians.
 Click to enlarge
Notes: Extremely low / very low /  low income is defined as up to 30% / 30–50% / 50–80% of area median income. Inadequate units lack complete bathrooms, running water, electricity, or have other deficiencies.
Source: JCHS tabulations of HUD, 2013 American Housing Survey.

The lowest-income households also accounted for the largest share of renters reporting overcrowded conditions and physical housing problems such as toilet breakdowns, exposed electrical wiring, heating equipment breakdowns lasting six hours or more and the presence of rats in the unit. 
Figure 3: Click to enlarge
Notes: Extremely low / very low /  low income is defined as up to 30% / 30–50% / 50–80% of area median income Overcrowded conditions refer to units where there are more than two people per bedroom. Holes in the floor are those that are about four inches across.  
Source: JCHS tabulations of HUD, 2013 American Housing Survey.

Matthew Desmond’s most recent book, Evicted, vividly captures these statistics, drawing attention to the grim housing conditions of families in low-rent units in inner-city Milwaukee who must live with the constant presence of roaches and other vermin, clogged sinks and bathtubs, holes in their windows, and broken front doors.

Rentals occupied by extremely low-income households in central cities have the highest physical inadequacy rates, especially those located in small multifamily buildings with 2-4 units. Indeed, 16 percent of these units were categorized as inadequate, compared to 12 percent of those in buildings with 50 or more units. As I pointed out in a previous post, small multifamilies are a critical source of low-cost housing because they tend to charge lower rents than those in much larger structures, but much of this stock is rather old and at higher risk of loss from the affordable stock due to deterioration.

As this recent NPR piece suggests, the narrow margins for mom-and-pop landlords operating in low-income neighborhoods do not provide sufficient incentive for landlords to make improvements or repairs in a timely manner. Indeed, according to the American Housing Survey, 13 percent of extremely low-income renters reported in 2013 that the owner of their unit usually did not start major repairs or maintenance quickly enough, compared to less than half that share (6 percent) among higher-income renters with incomes above 80 percent of area medians.

The prevalence of housing deficiencies among units occupied by the lowest-income renters highlights the importance of bolstering building code enforcement efforts at the state and local levels. However, municipalities are often faced with tight budgets that lead to dwindling code enforcement teams. Indeed, according to one estimate in 2013, Cleveland and Detroit, among others, have cut their code enforcement workforce by about half since the middle of the last decade. Cities like Baltimore, Portland, and the San Francisco Bay Area are also facing shortages of building inspectors that make it difficult to deal with building code violations. While increased code enforcement can identify landlords who are failing to maintain their properties, this could also lead to unstable housing situations for current tenants. Renters may withhold rent or call local building inspectors as a tactic to push landlords to make necessary repairs, but this could lead to eviction threats or the initiation of a formal eviction process due to nonpayment of rent.

At the federal level, budgetary constraints have also impacted efforts to address the physical deficiencies among the aging public housing stock, which was largely built before 1970. Federal appropriations for the public housing capital fund fell by 34 percent over the past decade and HUD is faced with an estimated backlog of $26 billion in capital maintenance and repairs (as of 2010). HUD’s housing choice voucher and project-based rental assistance programs, which subsidize rentals for low-income households in the private market, require landlords to pass annual or biennial inspections for housing quality. However, the public housing stock is not subject to regular inspections and has largely been prohibited from using private capital to finance capital needs and repairs. As a result, compared to other types of assisted rentals, physical housing problems are more common among the public housing stock. In 2013, over half (53 percent) of public housing units had more than two heating equipment breakdowns lasting at least six hours and 13 percent of units had water leaks due to equipment failures within the previous 12 months.

Living in unsafe, physically inadequate housing can lead to adverse health and developmental outcomes for low-income families. Indeed, recent research confirms that children exposed to defects such as leaking roofs, broken windows, rodents, and nonfunctioning heaters or stoves were more likely to experience emotional and behavioral problems. Among five housing characteristics studied—quality, stability, affordability, ownership, and receipt of housing assistance—poor physical quality of housing was the most consistent and strongest predictor of emotional and behavioral problems in low-income children and adolescents. Poor housing conditions such as mold, chronic dampness, water leaks, and heating, plumbing, and electrical deficiencies, are also associated with health risks like respiratory illness and asthma. These findings underscore the urgent need for cities to prioritize code enforcement and work collaboratively with nonprofit tenants’ rights groups to deal with landlords who are not responsive to requests for necessary repairs.

Tuesday, May 10, 2016

Renters Also Have Healthy Housing Concerns

Elizabeth la Jeunesse
Research Analyst
The Joint Center recently released a working paper highlighting American consumers’ concerns and awareness of “healthy housing” issues, which include indoor air quality, water quality and other indoor environmental concerns. One of the more compelling findings of the study was that renters expressed healthy housing concerns at a higher rate than homeowners. Indeed, 36 percent of renters we surveyed reported some level of healthy housing concerns or suspected risks, while only 24 percent of homeowners did. Indoor air quality issues were most prevalent—including dust, dampness and moisture, lack of sufficient ventilation, and other indoor-air related problems including air pollution from outdoors. Other major concerns included water quality, and basic safety issues such as pests, and concerns about the physical structure.

Notes: Sample size is 820.  Renter households were asked, “In the past few years, how concerned have you been about your current rental home negatively affecting your or another occupant’s health?  This may include but is not limited to concerns related to mold/moisture, indoor air quality, asthma, chemicals in the home, noise insulation problems, light issues or other “healthy housing” issues important to you.“
Source: JCHS tabulations of Healthy Home Renter Survey (Summer 2014), The Farnsworth Group

Renters’ high level of concern is not surprising. Results from the American Housing Survey (AHS) showed that as of 2011 renters scored as worse off than owners across nearly every measure of healthy-home risks and concerns. Renters were more likely to live in inadequate housing conditions, encounter mold, musty smells and second-hand smoke from other units, as well as report hazards (loose railings, broken steps, insufficient illumination for stairs) than homeowners.

Along with these indoor issues, health risks in these places can be compounded with higher outdoor air pollution. Results from the 2013 AHS further showed that renters were more likely to report living close to highways/railroads/airports (20 percent) compared to homeowners (9 percent). Another 7 percent of renters reported living near industrial areas, compared to only 3 percent of homeowners. The higher concentrations of outdoor air pollution in these areas can infiltrate the home when ventilation methods do not allow for adequate air filtration.

Another factor that may contribute to renters’ concerns is the condition of their units. The rental housing stock is older, with a median building age of 43 years, vs 38 years for owner-occupied homes. Many older rental structures were not designed to modern standards for indoor environmental health. For example, many older multifamily buildings lack any basic ventilation systems for cooking with gas-stoves. Renters also tend to live in closer proximity to each other, with over 60 percent of renters living in multifamily buildings (vs. 11 percent of homeowners). The associated wear and tear of higher turnover, and neighbors’ behavior such as smoking indoors, can impact renters’ quality of life.

Rental property owners’ maintenance and upkeep behaviors certainly also influence renters’ satisfaction with their living conditions. But while most state and municipal sanitary and housing codes govern most basic issues such as structural integrity and pests, they rarely incorporate newer research on indoor environmental quality concerns. These concerns include formaldehyde in building products, inadequate or non-existent ventilation for gas-stove cooking, second-hand smoke, and other off-gassing chemicals (e.g., VOCs) from indoor furnishings such as carpets and flooring.

The chart below provides a snapshot of renters’ specific indoor environmental concerns based on our survey results, beyond basic issues typically addressed by housing codes. As it shows, air quality and other indoor issues impacted renters living in both single- and multi-family homes. Dust and moisture concerns were most common. Renters also expressed awareness of chemical issues, including from the building itself but also from interior products/furnishings/carpeting. Among renters living in multifamily structures, noise issues and odors or smoke from neighboring units were also cited frequently.

Notes: N=239, including 80 renters living in single family detached homes and 159 renters living in multifamily or attached homes. Renter households that expressed some basic interest/concern over indoor environmental issues were asked, “Of the following healthy home issues, how would you rate your level of concern/interest over the past few years regarding your current rental home?“
Source: JCHS tabulations of Healthy Home Renter Survey, The Farnsworth Group.

While individual renters can take some minor steps to mitigate indoor environmental risks at home, most renters are limited by the fact that they do not own their units, and therefore have little incentive for—if not an outright prohibition from—making physical modifications to their home. Therefore integrated, long-lasting healthy housing solutions will need to come from multiple stakeholders, including not only property owners, managers and developers, but also building product manufacturers, as well as those who regulate the rental industry. All of these stakeholders should examine ways to incentivize, increase our understanding of, and promote healthier rental housing, including ways to make effective healthy housing strategies for renters more cost-effective.

The growing market for energy efficient housing may set a precedent for how healthy multifamily solutions might take hold. Recently numerous articles have highlighted the good business sense of pursuing energy efficiency. As a recent McGraw Hill study suggested, multifamily builders find that customers are willing to pay more for “green” units. While energy efficiency also saves on energy bills, healthy-home advancements in rental properties can potentially increase resident retention and satisfaction—both of which are of economic benefit to the rental industry.

With the ongoing, rapid development of research related to healthy housing, as well as the tendency of consumers to seek out information on this topic, we expect to see demand in this area to grow in the future. Indeed, as awareness of healthy housing research and risks grows, renters are likely to increase their demand for healthy housing attributes. Rental property owners who can get out in front of this trend may be better poised down the line to capitalize on the growing demand for health-conscious home environments.

Wednesday, May 4, 2016

Why Does Affordable Housing Need Saving?

Alexander von Hoffman
Senior Research Fellow
In recent years the skyrocketing housing prices in major cities in the United States have raised the specter of driving out people who cannot afford to pay the increasingly high rents. Many housing advocates argue that the most practical way to prevent dislocation of the poor is to save government-subsidized privately owned low-income rental dwellings.

Why does such “affordable housing” need to be saved? After all, you might point out, public housing doesn’t change into private market housing.

In fact, subsidized rental housing is quite different than public housing. Begun in the 1930s under President Franklin Roosevelt, public housing was created and managed solely by government agencies. Under subsidized housing programs, the first of which started about 1960, the federal government gave various financial incentives to private nonprofit and for-profit companies to build, manage, and own rental projects for low-income households. Public housing was pretty much all government; subsidized low-income housing took the form of public-private collaborations.

Most significantly, the projects under the two housing programs ran for dramatically different lengths of time. The federal government financed public housing over such long terms – with sixty year construction loans, for example – as to make it seem almost permanent. In contrast, the terms of the subsidies under public-private housing schemes were relatively short – most for only twenty or twenty-five years.

Back in the 1960s and ‘70s, the authors of the subsidized housing programs gave little thought to what would happen when the subsidies ended. But years later, when the subsidies began to expire, people realized that enormous numbers of low-income dwellings could easily disappear. Poor people would have no place to live. In response, housing advocates raised the cry, “preserve affordable housing!”

New Franklin Park Apartments in Boston, Massachusetts

The story of how people realized that privately owned subsidized housing needed to be saved and how they went about saving it is the subject of my newly published Joint Center for Housing Studies working paper, To Preserve Affordable Housing in the United States: A Policy History.”

For some time now, I have been examining the subject of public-private low-income housing. Unlike public housing, remarkably few people know about these programs. Ask about them and you might get a vague response, “Is that Section 8?” Such unawareness is remarkable because these subsidized housing programs have created millions of low-income rental units, far more than public housing has.

I first studied the origins and causes of America’s subsidized low-income housing and published my findings in an article, “Calling Upon the Genius of Private Enterprise: The Housing and Urban Development Act of 1968 and the Liberal Turn to Public-Private Partnerships” published in the journal Studies in American Political Development (October 2013).

Now in the Joint Center working paper, I have explored the way America’s public-private housing policy unfolded.

Skyview Park Apartments in Scranton, Pennsylvania

My research reveals that the public-private housing programs created in the 1960s and 1970s were highly productive but beset by troubles. Buffeted by bad underwriting, weak management, and economic hard times, many of the early housing projects deteriorated. Housing advocates for the poor jumped in to rescue the troubled projects from defaulting, becoming unlivable, or both. After studying the problems, the advocates sought ways to buttress the incomes of financially troubled housing projects or convey them to responsible parties. In Washington, sympathetic federal officials implemented new programs and procedures to help the advocates stabilize the conditions of the beleaguered properties.

The process, I found, created a cadre of experienced and informed housing activists and government officials. So when the subsidies of the housing programs began to expire in the 1980s, these policy veterans threw themselves into preventing the low-income residential stock from either deteriorating or being converted to expensive private-market housing.

Their efforts, however, set off a political backlash from the owners of the housing who insisted on the right to do what they wanted with their property, including cashing out. The two sides fought each other in the courts, Congress, and federal government until the late 1990s when they compromised and joined forces.

Since then, a broad coalition – including advocates for the poor, for-profit and nonprofit developers, government officials, and philanthropic institutions – coalesced to support preservation of affordable housing. Since the 2000s, the National Housing Trust, with the support of the MacArthur Foundation, has led a highly successful campaign to enlist state and local governments in the cause.

In short, the plethora of programs and efforts to maintain the subsidized low-income housing has become a key component of America’s low-income housing policy. Perhaps it is not surprising, then, that people now suggest preservation of affordable housing as a practical way to prevent displacement of the poor.

Thursday, April 28, 2016

Disability Housing - Best Practices and New Solutions

Micaela Connery
2015 Research Fellow
This summer I’m moving. Again. It will be my sixth “residence” since graduating college. Over the last seven years, home has included a three bedroom apartment in Somerville, my parent’s basement (Cellar Dwellers Unite!), a grad school dorm where adults regress to freshman status, full-size bunk beds on the Lower East Side (full-size bunk beds are a real thing), and a bedroom that was actually a closet found somewhere deep in a Brooklyn craigslist. Despite all the quirks that came with each dwelling place—communal showers, head whacks on the top bunk, et cetera—each one was home in some special way.

But, for many adults with disabilities, a suitable home is hard—sometimes almost impossible—to come by. In the time that I moved five times, hundreds of thousands of individuals with disabilities across the U.S. have sat on housing waitlists. They’re waiting, often many years, to make just one crucial move, the move out of their parent’s home into community or independent living. The United States spends over $77 billion dollars annually on special education, often working to prepare individuals with disabilities to be successful, independent, and included. Yet those opportunities for independence inclusion are almost non-existent after exiting the school system. We spend billions in public funds preparing individuals with disabilities for opportunities they may never be able to have.

The most obvious issue here is funding and availability of housing offerings. Most state agencies who are on the front lines of addressing this need are finding there simply isn’t enough public funding to support placements and support services for the high number of individuals with disabilities who need it. As state developmental services budgets are cut and numbers of adults with disabilities increase, the challenge is only growing over time.

While increasing funding (or at least preventing budget cuts) is a key part of the solution, it will only incrementally address the growing waitlists for housing services. Absent an increase in the supply of suitable housing options, funding alone won’t likely fix the problem. Many providers, families, and organizations have taken it upon themselves to innovate new solutions to housing placements; experimenting with different operational structures, engaging private funders, rallying parent support, and innovating new housing models. By understanding what makes these innovative models effective, and where they face challenges, policymakers can better support new solutions for the disability housing crisis. With support from the Joint Center, I spent last summer examining a few of these approaches and what we can learn from them, and have reported my findings in the paper “Disability Housing: What’s happening? What’s challenging? What’s needed?”.

Perhaps the most obvious finding from spending time with consumers and providers is that one size does not fit all. While there are some common best practices—engaging families, supporting choice, linking to employment and transit, and retaining quality staff—there is not one single housing type or model that is right for all people with disabilities. As for people without disabilities, what people want their home to look like varies greatly. Some people desire an apartment in a city while other prefer a house with lots of land in a more rural neighborhood. Some people want to live alone and other want to be surrounded by lots of friends, family, and activity. Policies must support a range of options and choices for individuals with disabilities.

The second key issue in finding housing solutions is the right to risk, meaning that housing options shouldn’t be unduly constrained by concerns about residents safety. A right to risk would bring a willingness to innovate and provide support for experimenting with new models. Policymakers and regulators, perhaps wary of litigation, seem to be resistant to anything that may lead to failure or risk. They want to protect people with disabilities, sometimes at any cost. But people with disabilities should be allowed to take risks themselves and providers should be supported to innovate with new approaches. While we should protect people as best we can, we can’t let protection stifle new ideas. The only way disability housing can improve is if we give it space to innovate, and even make mistakes.

While providing housing and adult services for people with disabilities presents challenges, it’s also full of opportunities. It’s an opportunity to better integrate our communities. Thinking about these issues helps us reexamine what it means to support quality and affordable housing for all populations, not just those with disabilities. It’s an opportunity to re-evaluate and innovate around how we create communities, connect with our neighbors, and age within our homes. With the right program design and service delivery, we can start to change the predominant concerns of parents of children with disabilities. No longer will they worry, “Where will my child live after I die?” or “Who will care for my child?” Instead, they can wonder: “Which housing option is right for my child?” And most of all: “What community will be lucky enough to have my child as a member?”

Individuals with disabilities and advocates have been fighting for thoughtful supports, inclusion in communities, and independent living since the 1960s. The challenge isn’t new, but the solutions will need to be.

Micaela Connery was a summer research fellow for the Joint Center for Housing Studies. She is an MPP Candidate at Harvard Kennedy School focusing on disability, inclusion, and community development. She is a member of the inaugural class of New World Social Enterprise Fellows at the Center for Public Leadership at Harvard. She will continue with her studies as a Mitchell Scholar in the Fall of 2016, pursuing her MBA at the Smurfit School at University College Dublin.

She is presenting a Housing Studies Seminar on this topic at noon on Friday, April 27, 2016 at the Joint Center offices. See our calendar listing for more information.

Tuesday, April 26, 2016

The Rising Tide of Online Home Services

Grant Farnsworth
The Farnsworth Group
The swell of young homeowners and the rapid evolution of the online home services market could lead to a big wave of growth in this sector over the coming years. But how aware are consumers of the availability of these services, and how is the industry responding to this new wave of offerings?

Guest post by Grant Farnsworth of The Farnsworth Group, a member of the Joint Center Remodeling Futures Steering Committee. The blog is based on a recent presentation to the Remodeling Futures group.

GM investing $500M in Lyft, Google investing in Uber, The Home Depot buying Red Beacon, the launch of Amazon Home Services… these large players know something is in the water when it comes to online services. We appear to be witnessing “Uber-ization” of the home services market.

As the platform matures, important questions are beginning to take shape.
  • What exactly are online home services? How is this space being defined?
  • Who is using these services?
  • Are the users’ needs being met?
Early evidence suggests that while millennials are beginning to latch onto these services, older owners are less engaged, and home improvement contractors generally aren’t viewing these service delivery models either as potential partners or as competition to their current business models.

To gain insights on the use and perceptions of online home services, The Farnsworth Group completed a study that surveyed homeowners who had recently hired a service professional. Also surveyed were remodelers and specialty contractors, to better understand their awareness of – and potential integration with – these service delivery models. For this survey, online home services were defined as “websites or apps that are intended to help homeowners and service professionals with home design, home improvement, and/or home repair and maintenance projects”.

Given their relatively recent introduction, much of the population is largely unaware of these services. Both homeowners and professionals view these platforms to best fit with modest improvement and repair projects in the under $5,000 range. Both groups also indicate similar features that are important to them when working with a service pro or client. However, that is where many similarities end. Results show dramatic differences in the adoption of online home services by younger homeowners, older homeowners, and contractors.

Homeowners who hired a service professional within the last 12 months were asked which of the following services they have ever used, or currently use: Angie’s List, HomeAdvisor, Houzz, Porch, TaskRabbit, Thumbtack, and Homeowners between the ages of 21-34 are much more likely to have consulted these home services, and used them in their selection process. Nearly 75% of those using online home services end up hiring a service professional from one of the services.

Online Service
Angie’s List
Home Advisor

However, when remodelers and the trades were asked what apps and websites they have used or are currently using, they are often not as engaged with online home services as homeowners, and certainly not as engaged as younger homeowners.

Online Service
Specialty Tradesmen
Angie’s List
Home Advisor

Younger homeowners in the study were also generally more willing to engage home service sites. Over three-quarters of millennials are somewhat to extremely willing to do business online, a figure that drops closer to 50% for boomers.

 click to enlarge

So what is driving homeowners and professionals alike to utilize these new online home services platforms? Homeowners that have used online service sites use them for a variety of reasons, but three stood out in the survey:
  • Getting project estimates/costs
  • Information on the home services provider
  • Being matched with a home services provider
However “being matched with a service pro” is low on their list of importance when it comes to homeowners hiring a service professional. The majority use “word of mouth” for getting a few contractor names.

Remodelers and trades professionals, on the other hand, use online home service sites to generate leads, get design ideas, and market their company. Unfortunately, these features also do not align with what the survey showed was most important to them:
  • Communicating with clients
  • Managing projects
  • Providing estimates
Getting leads via an online service is of little importance because, like homeowners, nearly all contractors get leads from “word of mouth”.

It is clear that the features of online home service sites do not always align with what’s most important to the users. The gap between what’s important and how online service sites are being used indicates either a lack of understanding as to what the platforms provide, OR a failure for the platform to provide appropriate services.

Regardless of the needs for knowledge, education, and platform development that this study illuminates, young homeowners are extremely likely to utilize these online home services sites. They also perceive these sites to be “more beneficial” and “easier to use” than traditional “offline” methods. In contrast, the professionals we surveyed, while willing to test the waters, do not share as much enthusiasm as younger homeowners.

Those who utilize online service sites may see it pay off given the increasing use and high conversion rates. Millennials are the largest generation in our history, and as such are the generation with the most future buying power. As they continue to enter the homeowner market, awareness and use of online home services seems inevitable. With that will come more informed and educated consumers, which should propel a modest swell in online home services to something much, much more significant.

So home improvement professionals are well advised to grab a surfboard, paddle out, and be prepared, because they may catch a killer wave to ride with the new generation of home buyers.

For the complete study results contact The Farnsworth Group at or 317-241-5600 x.301.