Addressing Middle-Income Housing Affordability Challenges

Audree Grubesic. Aug 1, 2024. 2 min read.

Summary

Housing affordability remains a persistent challenge, even as some markets see slight easing in home prices. State and local governments have created programs to help middle-income renters.

Harvard JCHS working paper

The Harvard University Joint Center for Housing Studies released a working paper titled “Subsidizing the Middle: Policies, Tradeoffs, and Costs of Addressing Middle-Income Affordability Challenges.” It examines 11 state and local programs for middle-income housing.

Program types

• Direct subsidies, including grants, loans, and public land donations.
• Indirect subsidies, including property tax exemptions and government guarantees of construction loans.

Examples of programs

• Massachusetts offers loans of up to $100,000 per affordable unit.
• Michigan provides grants of up to $70,000 per unit for projects with at least 12 units and $80,000 for smaller projects.
• Georgia’s Rural Workforce Housing Initiative has allocated an estimated $24 million in infrastructure grants across three funding rounds, supporting just over 1,000 units at about $23,000 per unit.
• The Colorado Middle-Income Housing Authority aims to subsidize 3,500 units for middle-income renter households, including at least 2,800 newly built units.

Common features

• Most programs use Area Median Income, or AMI, to determine eligibility.
• Many programs are labeled “workforce housing,” but eligibility is usually income-based rather than tied to a specific job or career.
• Some programs support rehabilitation, adaptive reuse, or acquisition and conversion.
• The main emphasis is on new construction.

Policy recommendations

The study suggests that states and cities consider lower-cost approaches than direct subsidies. These include:

• Liberalizing zoning to allow small multi-family buildings, ADUs, and manufactured homes.
• Expedited permit processes.
• Relief from some environmental or community review requirements.
• Reduced parking mandates.
• Density bonuses for projects that meet affordability criteria.

The article says these strategies can lower per-unit costs and improve affordability without diverting resources from lower-income households.

Contact information included in the page

• Housing Savannah, Inc., P.O. Box 23121, Savannah, GA 31403
• (912) 651-6766
• http://www.housingsavannah.org
• Laura Lane McKinnon, Executive Director | Housing Savannah, Inc.
• D: (912) 651-6766
• C: (912) 724-0575
• llmckinnon@HousingSavannah.org