Marc H. Morial, President, National Urban League:
We had a foreclosure crisis 10 years ago. Now we have a bit of an affordability crisis. Because while the market has come back, people are simply paying more to buy and to rent than ever before.
Gary Acosta, Co-founder & CEO, National Association of Hispanic Real Estate Professionals:
The crash in the marketplace really scaled back demand. Homebuilders got hurt really bad, so there was very little new construction that was taking place for about five or six years. At the same time, household formations didn’t slow down a whole lot. So we were adding about a million new households to the country every year. And there wasn’t housing being created to meet that new demand. And that sort of created the crisis that we’re in right now.
Cerita Battles, Wells Fargo Home Mortgage:
Income is not rising at the same pace as some of the cost for homes, and so therefore you have a gap.
Mark Vitner, Wells Fargo Senior Economist:
One of the most confounding aspects of this economic recovery has been that homebuilding, the new supply of housing in the U.S. economy, has generally lagged behind the growth of households. And as a result, we’ve seen that home prices have been rising very rapidly. In most cases, they’ve been rising two to three times faster than incomes and about two times faster than inflation. That’s not sustainable, and it’s really worsened the affordability problem. And that’s why the affordability problem is so much greater than what people have traditionally thought about affordable housing. It’s not just folks that need some sort of assistance from the government. Housing has become less affordable for a wide segment of the population.
Battles:
You’re starting to see a lot of millennials continue to live with their parents. You’re continuing to see baby boomers not move out of the bigger homes. You’re seeing multiple families live in the same home just because rents are up.
Acosta:
You have housing stock out there that’s not really aligned with the way these families are having to live right now. So it’s creating this extra density in communities. It’s also putting a lot of pressure on basic services in those communities as well. So there’s more people living in these communities than was intended to be. And so therefore, it’s creating issues in schools, and as I said, basic services, and all of that is creating challenges for communities as well.
Morial:
It disproportionately affects people of color. It disproportionately affects those who are low income. I think it disproportionately effects the elderly.
Acosta:
The Hispanic community, for example, represents about 40%, 50% of all new households that are being formed in this country right now, so a substantial percentage of that. And if they can’t buy homes, you’re going to see that separation of wealth and that quality of life just become worse in this country.
Vince Toye, Wells Fargo Community Lending and Investment:
Anyone who can afford, if they could afford to live close to where they work and have clean, affordable housing, only spend 35% of their income, I think most people would choose to do that. But a lot of times, the supply is just not there. So you have someone who may be working in San Francisco or L.A., where they have to live, have a tremendous commute. They could have an hour-and-a-half commute one way just to live somewhere where they can afford and have the type of housing they want or school systems that they want without paying nearly 50% of their income.
Vitner:
By our estimates, there’s about a million fewer homes turning over each year than there should be, given past norms with a growing economy.
Acosta:
There’s people that are actually benefiting from the situation, because they’re gaining in terms of home equity, but at the basic cost of the people who are not able to enter the marketplace.
Keith Fairey, Enterprise Community Partners:
When you look particularly at the affordable housing stock, we’re actually losing some of that stock. And some of the most precious stock that have some of the greatest public investment. Let’s start with thinking about public housing. Not only is that distressed in many communities, with great amounts of deferred maintenance, but it also is, in some cases, becoming lost.
