After Lockdown, New Thoughts on Affordable Housing

(Bloomberg) -- Months of lockdowns during the pandemic have set the stage for a rethink of where people live, how much they pay – and who provides the housing. Governments took bold actions that simply weren’t on the table before the health crisis, like halting evictions or paying for hotel rooms where the homeless could self-isolate safely. That’s shifted the debate about how to ensure there’s a roof over everyone’s head, as rising prices have made a typical home out of reach for workers in more than half of the world’s major cities.

Halt Evictions and Foreclosures

As support for unemployed workers and struggling businesses began to wind down, experts warned of an eviction crisis of historic proportions. Temporary moratoriums proliferated during the health crisis, with a patchwork of actions either country-wide or at the state or local level. The U.K. and France both extended their national bans on evictions, with most British renters afforded an initial six-month grace period that ended in August. After lawmakers in the U.S. failed to agree on a way to extend the federal moratorium past June 24, the nation’s health-protection agency used its quarantine authority to halt evictions on renters earning no more than $99,000 a year. The moves provide fresh examples of how state support can head off the social and financial cost of displacements.

Subsidize and Go Public

The need for more aggressive state intervention was on the political agenda in many countries even before the pandemic, with numerous cities exploring market controls and public provision. In the U.S., Democratic presidential candidate Joe Biden backed an expansion of rent subsidies through housing vouchers granted by the federal government. In Europe – long more reliant on public housing than the U.S. – pressure grew in many cities for the state to expand its role as a direct provider of homes after decades of withdrawal from the market. Berlin attracted attention for freezing rents and for a citizen-led campaign to re-nationalize public housing sold to large companies, including Deutsche Wohnen SE.

Keep Housing for Residents

Many urban homes are vacant not for lack of demand, but because their owners rent them as vacation apartments on websites such as Airbnb. Or they view the properties primarily as an investment and don’t want the obligations that come with low-paying tenants. Cities have been cracking down on vacation rentals by requiring licenses and placing caps on the number of rentable nights per year. An alliance of 22 European cities has petitioned the European Union for yet tougher rules on home-share platforms. Barcelona is enacting plans to expropriate apartments left empty after being repossessed by banks.

Build, Build, Build

To provide incentives for the development of new affordable homes, governments typically either provide tax credits or loosen planning rules to allow denser building in more places. After the pandemic hit, U.S. lawmakers pushed for the relief efforts to include a major expansion of the Low Income Housing Tax Credit to encourage more construction. Some places are relaxing restrictions on the number of unrelated people who can occupy a single house. The U.K. unveiled an overhaul of its planning system that will, for the first time, guarantee approval for projects that fit within local guidelines, replacing a case-by-case review. In 2018, the city of Minneapolis became one of the first and largest in the U.S. to end single-family zoning, which means homes for two or three families can be built on each plot.

Rethink Where People Live

A flight of city-dwellers to the suburbs could provide a powerful force for readjusting housing costs over time. As white-collar workers freed themselves from commuting during the pandemic, some began to seek out larger, greener, cheaper lodgings elsewhere. While there’s little evidence of people abandoning cities altogether, real estate sales and inquiries around expensive spots such as San Francisco suggested a potential shift in mindset and more employers were open to the idea of full or part-time remote work.

Create 15-Minute Cities

Cities including Paris and Melbourne have adopted a planning model that seeks to make neighborhoods more walkable by spreading essential amenities evenly across the metropolitan area. Dubbed the “15-minute city” concept in Paris, the idea is to integrate workplaces, services and leisure facilities with homes so that a resident’s needs can be met with no more than 15 minutes of travel by foot or bicycle. Such an approach could gain traction in the wake of pandemic lockdowns that focused people anew on their immediate vicinity. But to pull it off, planners must prioritize the construction of affordable housing dispersed through the city, so that lower-income “essential workers” can live close enough to workplaces to avoid long commutes.

The Reference Shelf

• Bloomberg CityLab explored how the coronavirus recovery is changing cities and how planning for the “15-Minute City” could help.
• Bloomberg Opinion columns on how cities will survive pandemics, handling homelessness, how suburbs can woo city people and Trump’s eviction moratorium.
• The roots of the affordable housing shortage are explained in this QuickTake.

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