Late last month, a group of business and community leaders announced a $100 million fund for construction of new affordable housing in Franklin County.
The fund is financed entirely by private-sector investors and will provide low-cost loans to developers who agree to affordability requirements in their rental pricing.
It’s good to see private-sector players taking action on housing affordability, but these are just low-cost loans, meaning the true value of the contribution will likely shake out to only a few percentage points in reduced rates, or a few million dollars in actual subsidies.
This is likely to be a drop in the bucket when it comes to reducing housing cost burdens. A 2017 study by the Affordable Housing Alliance of Central Ohio found that in 2013 almost 100,000 Franklin County families were housing cost burdened, spending more than 30 percent of their income on rent. The number is likely even higher now with Franklin County’s population growth and increasingly hot housing market.
So what can we do to ease the burden of housing costs locally?
A recent analysis by Brookings Institution researcher Jenny Schuetz found that poor households in a sample of heartland metro areas pay almost 70 percent of their incomes towards housing. Schuetz said that direct subsidies will be needed to bridge the gap between incomes and monthly housing costs for the poorest families.
Across the country, other city councils and mayor’s offices are also looking at zoning codes. Often designed around increasing housing values and tinged with the dark past of racial segregation, zoning codes are getting major overhauls in cities like Minneapolis, Philadelphia and Seattle, as well as statewide reforms in California and Oregon, where lawmakers have angled to ease housing cost burdens by making it easier to build new housing in expensive cities.
Columbus’ “Insight 2050 Corridor Concepts” study released this spring suggested that easing zoning restrictions on the Broad/Main east/west corridor, Cleveland Avenue, Olentangy River Road and the Parsons to Groveport Road corridors could lead to reduced transportation, utility and environmental costs, in addition to the lower rental costs that density provides.
Another option would be to look at the other side of the cost burden leger: incomes. While reducing the cost of housing through targeted interventions is one way to reduce housing cost burdens, interventions that increase incomes can give families resources to pay for housing and other necessities they may have.
Programs like direct cash assistance, targeted economic development incentives and early childhood education investments are good tools to increase incomes. Economist Timothy Bartik has found that improving test scores, increasing educational attainment, improving public health and reducing crime can also boost local wages.
All in all, a few million dollars in private loan subsidies shouldn’t hurt families, but it falls far short of the impact city and county officials could have on reducing housing cost burdens for Columbus families.
This column originally appeared in Columbus Alive.