Solutions to increase the supply of affordable rental housing are explored in a new report from the Urban Land Institute’s (ULI) Terwilliger Center for Housing  and Enterprise Community Partners, Inc  (Enterprise).
Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals  outlines factors that impede the development of affordable rental housing – causing the supply in many markets to fall far short of the demand – and offers specific, actionable solutions to overcome the barriers.
Nationally, there were only 6.9 million rentals affordable to 11.8 million extremely low-income renters in 2011, a supply gap that grew by three million renters between 2001 and 2011—and continues to grow. "In an era of growing demand and declining government financial support for affordable rental housing, it is more important than ever to deliver affordable housing as effectively as possible,” the report says. “Bending the cost curve will enable developers to deliver additional affordable rental homes and help jurisdictions provide more housing choices, meet the growing need for affordable rentals, and ensure that individuals and families across a range of incomes have a place to call home within the community.”
The report, released today in Washington, D.C. at the ULI/Carolyn and Preston Butcher Forum on Multifamily Housing, is based on a series of interviews and roundtable discussions co-hosted by the Terwilliger Center and Enterprise over the past 16 months with nearly 200 developers, financiers, and policy makers in ten markets – Chicago, Denver, Los Angeles, New York City, San Francisco, Boston, Houston, Minneapolis, Pittsburgh, and Seattle.
Conclusions drawn from the discussions formed the basis for the research, which is intended to help fill the void of material examining how to overcome regulatory barriers to affordable rental development, such as land use, zoning and building code restrictions, processing delays, and financing obstacles. While economic conditions and demographics vary widely among different markets and play a significant role in local affordable housing development, the report identifies several overarching cost drivers, including:
“Drivers of cost come at all points in the development process and are deeply intertwined, but the need for more affordable rentals compels us to take on the challenge of understanding the drivers and work to mitigate them,” said Lynn Ross, executive director of the Terwilliger Center.
“Enterprise and ULI will use the joint research to spark federal, state and local conversations that lead to policy change and financial innovation, ultimately stretching limited resources for affordable housing,” said Ali Solis, senior vice president of public policy and external affairs at Enterprise. “At the same time, we must maintain high quality, green standards so that affordable homes can be sustainable for the long haul. That is our challenge as an industry.”
To address the cost drivers, the report offers several recommendations:
In addition to the recommendations, the report identifies three lessons drawn from the research – 1) Cost drivers come at all points in the development process and are deeply intertwined; 2) Mitigating the cost drivers requires collaboration efforts involving multiple stakeholders from the private and public sector; and 3) Leadership is essential to implement the recommendations.
About the Urban Land Institute
The Urban Land Institute www.uli.org is a nonprofit education and research institute supported by its members. Its mission is to provide leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. Established in 1936, the institute has more than 30,000 members worldwide representing all aspects of land use and development disciplines.
About the ULI Terwilliger Center for Housing
The ULI Terwilliger Center for Housing engages in a multifaceted program of work that furthers the development of mixed-income, mixed-use communities with a full spectrum of housing affordability. The center was established in 2007 by J. Ronald Terwilliger, former ULI chairman and chairman emeritus of Trammell Crow Residential.
About Enterprise Community Partners
Enterprise Community Partners works with partners nationwide to build opportunity. Enterprise creates and advocates for affordable homes in thriving communities linked to jobs, good schools, health care services, and transportation. Enterprise lends funds, finance development, and manage and build affordable housing while shaping new strategies, solutions, and policy. Over more than 30 years, Enterprise has created 300,000 homes, invested nearly $14 billion, and touched millions of lives. Join us at www.EnterpriseCommunity.com  or www.EnterpriseCommunity.org .
Study indicates disconnect between fixed costs and project scale, plus problems with financing and deal structures.
Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals  outlines factors that impede the development of affordable rental housing – causing the supply in many markets to fall far short of the demand.
Study indicates disconnect between fixed costs and project scale, plus problems with financing.