A paper released by the Joint Center for Housing Studies of Harvard University, “Subsidizing the Middle: Policies, Tradeoffs, and Costs of Addressing Middle-Income Affordability Challenges,” discusses the rise in housing cost burdens among middle-income renters – typically those earning between 60% and 120% of area median income (AMI) – and the growing number of state and local housing programs designed to promote housing affordability for this income group. The authors review 11 state and local housing programs that focus specifically on middle-income housing needs and provide direct or indirect public subsidies. After considering the potential benefits and tradeoffs of these programs, the authors conclude that middle-income housing programs should not divert resources away from programs serving the lowest-income renters, who are far more likely to face affordability challenges, and that middle-income programs should only be used to target housing markets where there are genuine middle-income housing needs.
The authors’ main goal is to better understand state and local middle-income housing policies and programs. In pursuit of this goal, they reviewed state government websites, news articles, and NLIHC’s Rental Housing Programs Database for policies and programs aiming to respond to middle-income housing or “workforce” housing needs. For each program, they examined its characteristics, the approach utilized, when it was created, the affordability period, and tenant income-eligibility requirements. They then used American Community Survey (ACS) data to identify households who met these middle-income criteria and summarize their characteristics.
The authors explain that the term “workforce housing,” used primarily to refer to housing that is affordable for middle-income households, is problematic because “workforce housing” programs typically focus solely on housing those with middle incomes, even while lower-income workers are a significant segment of the workforce. Additionally, the term reinforces the notion that some households are “deserving” of housing assistance while others are not, mirroring programs that have work-related requirements.
Despite increases in the number of middle-income renters experiencing housing cost burden, these renters still face far fewer affordability challenges than lower-income renters. Eighty percent of lower-income renters, defined as those with incomes below 60% of AMI, experience cost burdens, compared to 33% of middle-income renters. Furthermore, middle-income renters with cost burdens have more income left over after paying for housing costs than lower-income renters with cost burdens. Cost-burdened middle-income renters are also more geographically concentrated, because many housing markets adequately serve them.
The researchers find that middle-income housing programs were created in various political landscapes, locations, and housing markets. These programs typically do not serve low-income renters with greater economic vulnerabilities and the most severe housing challenges – including those with extremely low incomes The population these programs serve – middle-income renters – is also disproportionately white, which raises concerns that such programs reinforce racial inequalities. The researchers’ results indicate a need to design middle-income programs that have accompanying benefits for low-income households and that do not detract from the already limited resources dedicated to assisting these households. Policymakers must also ensure that middle-income programs are not operating in housing markets that could serve middle-income households with other public resources.
Read the full paper at: https://bit.ly/4f0cEcX