How are metros trying to solve affordable housing problems?

Having been in the real estate industry for the past thirty plus years, I am extremely familiar to the lack of affordable housing plaguing cities around the country. Many of these housing costs have to do with local governments and their construction permit fees. These regulations not only create red-tape headaches for developers but also add to the cost of new housing construction. Every new regulation creates hurdles for builders wanting to simply provide affordable housing for residents. Cities and companies have been cognizant of this lack of affordable housing and have tackled it in a variety of ways.

Denver Tries to Expand Its Affordable Housing

The Denver housing market is one of the hottest markets in the country. To alleviate their housing crunch, the Denver city council is looking to expand its allowable zoning for accessory dwelling units (ADUs). These smaller housing units can be used as guest homes or rented out to tenants. These ADUs sit on existing properties and therefore do not require extra land to build. Right now, Denver allows these smaller add-on units in 13% of its neighborhoods, a percentage that the city Council wants to expand.

What San Francisco Is Doing about Its Affordable Housing Problem

San Francisco remains one of the most expensive housing rental markets in the entire country. Since the housing crisis of 2008, San Francisco rents have climbed approximately 50%. To help alleviate the sort shortage of affordable housing, the San Francisco Board of Supervisors has approved a measure to allow in-law units to be rented out. These in-law units are generally add-ons to existing homes, or in other cases simply renovated garages or basements. The actual measure allows buildings with less than five units to add another apartment rental while larger buildings will be permitted to renovate and lease out an unlimited number of units. One way to counteract sky-high rents is to increase the supply of rental apartments in a city. By passing this measure, the San Francisco board of supervisors expects an increase of 14,000 extra rental apartments to be available to its citizens.

Companies Frustrated with the Lack of Affordable Housing Start to Build Their Own

Silicon Valley in California is among the top 10 most expensive real estate markets in the United States. So when Facebook planned to hire 6500 new employees in its Menlo Park headquarters, they simultaneously made a pledge to build another 1500 units housing of not only for his workers but also for the general public. These rental units would be built on land that Facebook already owns. This would be a perk that Facebook could directly offer to qualified job applicants: not only would prospective hires get a salary, they could get a subsidy and/or preferred placement in one of these newly built apartment buildings. The less affordable housing there is close to a company, the further out their employees have to move. These long commute times can sap employee morale as well as productivity, so Facebook could be also addressing these issues with its move into the housing market.

Many metro cities have their own idea of what will increase the amount of affordable housing in their areas. Whatever the solution, we need to act now since this issue of lack of affordable housing for low-income families is still a key discussion across the country.

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Ruel M. Hamilton is the CEO and founder of Dallas-based AmeriSouth Realty, a real estate investment company that specializes in the ownership, development and acquisition of multi-family projects within the affordable housing industry. He primarily owns and operates Class C multi-family apartment communities, including some that were developed using Low Income Housing Tax Credits (LIHTCs). Hamilton believes that keeping and maintaining older properties is the key to fixing the affordable housing crisis. Accordingly, he pays close attention to bringing aged, crime ridden or poverty stricken housing back to life with rehabilitation and revitalization.