Build Generational Wealth Through Homeownership

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Problem

Homeownership can lead to intergenerational wealth, yet there is a significant racial gap in homeownership, the Urban Institute found homeownership rates continue to be low among Black and Hispanic households (42% and 48%, respectively, compared to 72% of white households that own a home). Furthermore, they project that the homeownership rate will continue to fall particularly for younger generations.

Solution  

Representative Andy Vargas and the state’s Black and Latino Caucus established CommonWealth Builder. CommonWealth Builder is an innovative program that uses $100 million in recovery funds to provide financial incentives for developers to sell to first-time home buyers and help build intergenerational wealth for qualifying families. This program also supports the construction of affordable single-family homes and condos and focuses on driving production in communities of color.

Using ARP Funds to Reinvigorate Public Housing

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Problem

Before COVID-19, America’s housing system was far from perfect. The pandemic put a magnifying glass on issues that have been present for years, if not decades: high rents, unattainable housing prices, and insufficient affordable housing stock. As the NewDEAL Forum noted in January 2021, “these problems were especially acute for people of color. Black households are twice as likely to rent as white households, and housing costs account for a heavier cost burden:  Among Black Americans, 55% pay more than 30% of their income toward housing compared to 40% of white Americans.”

Solutions

As part of Richmond’s Equity Agenda, Mayor Stoney will invest over $12 million in ARP funds to renovate and improve two of the city’s public housing complexes. One project will replace 504 existing old units, with up to 700 new apartments and homes for over 500 families. The funds for the other project will allow for the first phase of redevelopment and will ultimately result in 122 new for-sale homes.

ARP: Homelessness and Affordable Housing Solutions for Vulnerable Residents

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Problem

Before COVID-19, America’s housing system was far from perfect. The pandemic put a magnifying glass on issues that have been present for years, if not decades: high rents, unattainable housing prices, and insufficient affordable housing stock. As the NewDEAL Forum noted in January 2021, “these problems were especially acute for people of color. Black households are twice as likely to rent as white households, and housing costs account for a heavier cost burden:  Among Black Americans, 55% pay more than 30% of their income toward housing compared to 40% of white Americans.”

 

Solution

Mayor Quinton Lucas, with the support of the City Council, allocated more than $15 million from the American Rescue Plan to address the dual issues of homelessness and affordable housing. An additional $12.5 million has been set aside for the City’s Housing Trust Fund to provide affordable housing, paying special attention to special needs housing for families, seniors, and vulnerable residents. According to the mayor’s office, the ARP funding represents half of the city’s $25 million investment in the Housing Trust Fund, which will help the city serve hundreds of residents.

Ryan Fecteau, Speaker of the House (Biddeford, ME)

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Reforming Zoning and Land Use in Municipalities

This week, NewDEAL Leader Speaker of the Maine House Ryan Fecteau is championing a new effort to combat the state’s affordable housing shortage through ending zoning regulations. Among other provisions, his bill would require localities to let private property owners build up to four housing units on their land, rather than restricting them to single-family homes. Fecteau’s goal is to not only quadruple the number of new affordable housing units built in Maine each year from 250 units to 1,000, but also ensure that those affordable housing developments will remain affordable for the next 30 years. Read more about Speaker Fecteau’s bill, which has wide bipartisan support. And for more on solutions for the housing crisis, register to join experts and NewDEAL Leaders for our March 16 virtual event “Implementing the Recovery: Improving Access to Affordable Housing”.

Ryan Coonerty, County Supervisor (Santa Cruz County, CA)

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Novel Strategy to Address Mental Health and Homelessness

This week, Santa Cruz County, CA Supervisors, including NewDEAL Leader Ryan Coonerty, unanimously approved a new strategy for addressing mental illness among homeless individuals in the county. The “Mental Health Services Act Innovation Plan” aims to enroll approximately 600 people experiencing homelessness. The program will send field teams to meet participants where they are and provide clinical and case management services to both address mental health concerns and help transition participants into permanent housing. The program will help the County plot a permanent response that could serve as a model for other localities. Read more here.

Mari Manoogian, Representative (Birmingham, MI)

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New Program Boosts First-Time Homebuyers

Homeownership is vital to building a long-term, stable economic foundation, yet rising prices and stagnating wages have made homeownership unattainable for many young people. On Wednesday, Michigan Governor Gretchen Whitmer signed NewDEAL Leader Michigan Rep. Mari Manoogian’s legislation to establish the state’s First-Time Home Buyers Savings Program. The new program will allow residents to open special savings accounts to save for and eventually purchase single-family homes. Contributions and withdrawals from the accounts will be tax-exempt. “Homeownership is a hallmark of the American Dream,” said Rep. Manoogian. “This new program will put young people and new families on the pathway to success and will help our state retain its best and brightest…” Read more about the legislation here.

2021 Ideas Challenge Finalists

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The NewDEAL is pleased to announce the finalists from this year’s Ideas Challenge, our biennial policy competition highlighting innovative policy solutions from NewDEAL Leaders across the nation. Their ideas would reimagine the social safety net, create good jobs, expand education opportunities, build more sustainable communities, and strengthen our democracy. This year’s Challenge came at an especially important time to identify best practices, as Leaders grapple with the work of rebuilding and recovery in the wake of the pandemic, and have a unique opportunity to act with federal funds from the American Rescue Plan. Winners in each of five categories will be announced next week during our 11th Annual Leaders Conference, on Thursday, November 18, and be featured in Governing Magazine. Join us on social media to celebrate these extraordinary ideas, and click here to read details on the finalists in all five categories!

ALOHA Homes: Affordable, Locally Owned Homes for All

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What’s the Problem?

My father, an immigrant from China, worked one state job.  He was able to buy a house, put my brother and me through private school, put me through private college and graduate school, buy investment property, and retire comfortably.

Since then, Hawaii has developed a severe housing shortage.  About 11,000 students graduate annually from Hawaii public schools.  Only 2,000 homes are built annually.  Because of this structural undersupply, the median home price in three of the four counties now exceeds $1 million, and the state has lost population for 4 straight years.  Hawaii has the country’s highest percentage of people working multiple jobs and both parents working.  For young people today, it is no longer possible to buy a home, provide for one’s family, and enjoy retirement.  The housing shortage is the principal obstacle to fulfilling the basic progressive promise, “One job should be enough.”

 

What’s the Solution?

Singapore is an island less than half the size of Oahu, but with over five times the population.  It houses over 80 percent of its population in high quality, well maintained public housing that is available to all citizens for only $180,000 on average for a new three bedroom unit.  Even the President of Singapore lived in public housing before moving into the Presidential Palace.

ALOHA Homes (Affordable, Locally Owned Homes for All) adapts the Singaporean public housing model to Hawaii’s unique needs.  It would provide new, unsubsidized homes to Hawaii residents who would be owner-occupants and own no other real property for below market prices.  By building high density homes on state-owned parcels near rail stations, the state can house its future generations without developing agricultural, conservation or otherwise undeveloped land; without adding to the traffic on our roads; and create walkable, livable, safe neighborhoods.

Pallet Shelter Homes

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Problem

 We have been addressing chronic homelessness for many years and have many outreach programs and interventions in place, but the COVID-19 pandemic has exacerbated conditions and forced more individuals onto the street. Many of the people living outside are struggling with some combination of addiction, mental and behavioral health challenges. Prior to the pandemic, there was a lack of sufficient emergency shelter and treatment beds. With the increase that we are seeing throughout our communities, this lack of beds to place individuals experiencing homelessness has become a crisis. Having these residents continue to live outside is not a safe, compassionate, or productive option for them, nor a viable option for our communities.

 

Solution

The vast majority of individuals emerging need some form of support to ensure their success, which includes short-term housing. Rapid-response Pallet Shelters can be assembled in under an hour and allow for the creation of a short-term housing community. This community also includes on-site case management and support services to help residents find stability, consider their recovery, and services and work towards a more suitable permanent housing solution.

Keys to Equity: Building ADUs for Oakland

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Problems

 Oakland is experiencing a housing affordability and displacement crisis. Over the past decade, rents have increased 72 percent while incomes of Black Oaklanders have decreased by four percent. Black households face a high risk of displacement. 63 percent of Black renters and 45 percent of Black homeowners are considered cost-burdened, the highest of any group. Since 1990, the city’s Black population has decreased by 44 percent.

Accessory Dwelling Units (ADUs) — smaller homes on properties containing a larger, primary house — are an opportunity to provide affordable housing while building homeowner wealth. ADUs typically rent at below-market rates, are cheaper to build, can provide rental income for homeowners, increase property values, provide flexible living arrangements for owners and families, and can help stabilize communities experiencing gentrification. Black Oaklanders would benefit from ADUs but existing structural inequities, including disparities in wealth and access to capital, limit opportunities for ADU development among Black households. 

Solutions

Keys to Equity is an initiative of the City of Oakland, the Chan Zuckerberg Initiative, Richmond Neighborhood Housing Services and Self-Help Federal Credit Union to develop affordable homes and increase wealth for Black homeowners in Oakland by facilitating the development of ADUs. The program provides one-on-one project management services to homeowners, educational resources, complimentary ADU designs, permit streamlining, access to innovative financing products and a discounted construction process with a pre-selected general contractor. Although anyone can apply to the program, community-based program partners will conduct outreach efforts to target lower and middle-income Black homeowners.

The program’s goals are to (1) produce more housing that is affordable, (2) build wealth for Black homeowners, (3) stabilize communities at risk of gentrification and displacement and (4) create a scalable model by proving the efficacy and impact of ADU financing and development.     

 

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