5 Ways Housing Policy Can Be Improved

When it comes to making housing more affordable, more Americans are returning to apartments than to single-family homes. New census data, released Tuesday, show a soaring share of households living in apartments and co-ops, a trend that has hurt housing stock and failed to curb rising rents. Nearly 4 million more people paid cash for housing in the third quarter, compared with five years ago. That alone has made it difficult for developers to build high-end apartments — the high-end apartments that create better diversity. It has also discouraged some creative developers from committing to build houses and condominiums on the few available land. “It’s all about the luxury,” explained Dan Luo, senior vice president for real estate development at Fannie Mae. “We can’t develop a building on the site if we can’t do [richly] priced housing.”

In cities like New York and San Francisco, the rentals being built are expensive, at $2,200 to $3,100 a month. Meanwhile, cities like Memphis and Nashville report few new, moderate-income housing options. The challenges pose a real threat to the nation’s middle class, undermining the nation’s housing policy, which was designed to increase housing affordability.

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