Home is where the heart is, but how far would you go to keep your heart in residence at its current location?
More than half of all Americans in a MacArthur Foundation study said they would give up healthcare, rack up credit-card debt and forego saving for retirement in order to keep their current roof in place over their heads. Those respondents, surveyed between 2011 and 2014, are the lucky ones: Thus far, they have had the option of deciding whether or not to own their own home and to what lengths they might go in order to keep it. For more than a third of the population, however, the situation is more dire: They simply cannot afford to own their own home and, in many cases, will barely scrape by when renting, as well.
Zillow Chief Economist Svenja Gudell, Ph.D., [Think Realty “Women to Watch,” March 2017] summed up the housing affordability issue this way in a past interview with TR contributor Carole Ellis: “If you look just at the median or average numbers, it’s easy to gloss over affordability. If you keep digging and look at different subgroups, however, even though in a lot of areas affordability is quite good, these subgroups are suffering.”
She went on to explain that in many markets, the “bottom third of income earners are not only priced out of for-sale housing, but are not really able to afford renting either.”
The U.S. Department of Housing and Urban Development (HUD), which provides federal leadership for affordable housing policy in this country, defines it as housing—rented or owned—that can be had for 30% or less than the median earned income in an area. HUD and the federal government enact policies and legislation designed to assist the roughly one-third of the country that does not have access to affordable housing because their earned income is too low, local housing costs are too high, or some combination thereof. However, when these policies are implemented, they often actually hinder and harm the population most actively involved in providing practical, market-appropriate affordable housing solutions: real estate investors.
This is where you, as a real estate investor, come in. Although we may think of large, federally subsidized, multifamily units when we think of affordable housing, the real estate investing community is the source of the vast majority of truly affordable housing that meets specific tenant and would-be homeowners’ needs in this country. Flexible, creative and fully attuned to local market conditions by nature, real estate investors—who by extension tend to be small-business owners, either officially or unofficially—are the entities that are providing workable, productive, mutually beneficial housing solutions to the third of the population that most desperately needs them.
The problem is that when it comes to real estate investors, the lawmakers and policymakers have largely turned a blind eye or overlooked them completely. “There is such a lack of understanding and awareness of the actual providers of the majority of affordable housing in this country,” observed Brian Wojcik, CEO and founder of diyRealty Inc., an online software that assists landlords with their property management and has a stated purpose of “improving the social responsibility of landlording, which makes affordable rental housing more accessible.”
Yet, Wojcik said, U.S. housing policy ignores these industry drivers completely, failing to protect them in public policy and even passing legislation intended to help those most in need of affordable housing that works to the detriment of investor and buyer, landlord and tenant.
Wojcik will be hosting the premier legislative panel of Think Realty’s National Conference and Expo in Baltimore, Maryland, on June 24, 2017 at the Baltimore Convention Center. That event will bring real estate investors, legislative activists and experts, and professional policy-makers and -shapers together under one roof. “We’ll be working together here,” observed Think Realty president Eddie Wilson. “Our members and these professionals will be gaining insight from each other in order to not just boost competitive advantage in their local markets, but to protect the interests of the individual real estate investor, the backbone of our industry and the key to solving the affordable housing crisis in this country, as well.”