The Housing Crisis Goes Suburban

"It's a no-brainer," says David Smith, an affordable-housing advocate in Boston. "You can't sustain the internal contradiction of no limits."

Smith and many local housing officials also think that the strict income limits for most federal housing aid serve as employment disincentives, while concentrating poor children in projects without working role models. Rents are usually set at 30 percent of income, so the lowest-income families pay virtually nothing, and as Smith points out, "it's economic suicide for them to get a job." But the vast gap between the number of low-income families eligible for subsidies and the number served suggests that tinkering with the current system would not come close to solving the crisis. And the problems extend well beyond low-income families, which is why communities such as Fairfax now assist middle-class renters.

The root of the problem is the striking mismatch between the demand for and the supply of affordable housing -- or, more accurately, affordable housing near jobs. Fifteen million families now spend at least half their income on housing, according to Harvard's Joint Center for Housing Studies; many skimp on health care, child care and food to do so. Others reduce their rents by overcrowding, which studies link to higher crime rates, poorer academic performance and poorer health; Los Angeles alone has 620,000 homes with more than one person per room.

Other workers are enduring increasingly long commutes from less expensive communities, a phenomenon known as "driving to qualify." In the past five years, 88,000 Fairfax County families have moved elsewhere in the region, according to a George Mason University study; when Fairfax housing officials gave me a tour recently, they told me many of their employees now drive a full hour from Warrenton in Fauquier County. The media officer interjected that she drives nearly two hours each way from Winchester in Frederick County. The driver said he lives in Winchester, too.

This creates all kinds of lousy outcomes -- children who don't get to see their parents, workers who can't make ends meet when gas prices soar, exurban sprawl, roads clogged with long-distance commuters emitting greenhouse gases. "I don't think we're creating strong communities by forcing people into their cars four hours a day," says Cathy Hudgins, chairwoman of the housing committee for the Fairfax County Board of Supervisors. Affordable housing also helps make communities competitive; it's not clear how Fairfax can keep creating jobs if workers can't afford to live there.

Moderate-income families aren't able to buy Lamborghinis or Armani, but they can buy cars and clothes. So while it's obvious why they can't afford McMansions, it's not so obvious why they can't afford decent housing. They demand it. Shouldn't the market supply it?

The answer is yes. But in many communities, local regulations have stifled multifamily housing and even modest single-family housing. Minimum lot requirements, minimum parking requirements, density restrictions and other controls go well beyond the traditional mission of the building code and end up artificially reducing the development of safe, affordable housing.

The unfashionable but accurate term for these restrictions is "snob zoning." Suburbanites use them to boost property values by keeping out riffraff -- even the riffraff who teach their kids, police their streets and extinguish their fires. Urbanites are susceptible to the same NIMBY impulses, often couched as opposition to "traffic congestion" or "overdevelopment" or protection of the neighborhood's "character." It's easy to support affordable housing in someone else's neighborhood. But when developers propose high-density projects, neighborhoods object.

Fairfax recently bucked that trend when it approved a developer's proposal to tear down 65 single-family houses across the street from the Vienna Metro station and replace them with 2,248 high-rise apartments. The project will increase the supply of job-accessible housing and take commuters out of their cars; the county is even forcing the developer to set aside a small percentage of moderate-income units in exchange for an exemption from its anti-density rules. But the Fairfax supervisors rejected a similar mega-project down the street, bowing to opponents worried about traffic congestion, property values and "the element" the high-rises might attract.

Still, Fairfax County illustrates how the creative solutions to the current crisis are emerging locally. It was one of 130 communities to adopt "inclusionary zoning," requiring developers to reserve a percentage of affordable units. It is one of more than 300 communities with affordable-housing trust funds; Fairfax voters approved a "Penny for Housing" initiative that will divert one cent of property taxes to subsidized projects. The Fairfax housing authority is also at the cutting edge of "workforce housing," offering 20 single-room apartments for day laborers in its own offices, while building and buying several dozen townhouses to rent to nurses, police officers, firefighters, teachers and bus drivers.

But these local projects address only a tiny fraction of the demand. For example, Los Angeles is considering a bond issue that would create 1,000 units of affordable housing -- small comfort to those 620,000 families in overcrowded apartments. Economist Christopher Thornberg notes that California's private market added 120,000 urban rental units in 1987; in the first half of 2006, the total was just 232. The main obstacle, Thornberg concludes, is "the intransigence of local zoning boards."

In other words, the best thing local officials can do to promote affordable housing is to get out of the way -- stop requiring one-acre lots and two-car garages, and stop blocking low-income and high-density projects.

Washington politicians, on the other hand, have the federal budget at their disposal. But Congress hasn't supported new construction since the Low-Income Housing Tax Credit of 1986, which creates nearly 100,000 units of affordable housing a year, enough to replace half the units that are torn down or converted to market rents. Bush proposed a home-ownership tax credit during his 2000 and 2004 campaigns, but it turned out to be the rare tax cut he didn't pursue. A bill pending in Congress would divert a percentage of profits from federally chartered institutions such as Fannie Mae to a national affordable-housing trust fund, but it seems stalled. The only affordability ideas with any traction at the national level are not really housing ideas; for example, one way to make housing more affordable to workers would be to raise their incomes -- through higher minimum wages, lower payroll taxes or an expanded Earned Income Tax Credit.

There is one clear solution to the affordable-housing crisis: a real estate crash. It's the one housing issue that attracts media attention -- because it would hurt the Owns. But while an easing of prices could be devastating for lower-income Owns with risky mortgages, it probably wouldn't bring home ownership within reach for many Own-Nots. Prices have too far to fall; in 2000, two-thirds of the home sales in Fairfax were for $250,000 or less, but last year, fewer than one-twentieth were. And even a modest price slump could trigger a construction slowdown that would make shortages of affordable housing for moderate-income families even worse.

Eventually, politicians may rediscover housing -- not as an urban poverty issue, but as a middle-class quality-of-life issue, like gas prices or health care. Homeownership is often described as the American dream, but these days many workers would settle for a decent rental that won't bankrupt their families.

grunwaldmr@washpost.com

Michael Grunwald is a Washington Post staff writer.