Terwilliger Center Research and Gatherings Examine Housing Attainability

A key objective of the ULI Terwilliger Center for Housing is to provide thought leadership on housing production and attainability. The Terwilliger Center team periodically conducts research and releases publications on the trending topics and issues facing the industry. FY21 was filled with high-impact reports, events, webinars, videos, and more. 

Gatherings and publications of note include the Shaw Symposium, which is an annual forum that brings together leading national experts and practitioners to address the challenges and opportunities of urban neighborhoods; the Home Attainability Index report, which provides a high-level snapshot of the housing market with an intentional focus on issues related to racial, socioeconomic, and intraregional disparities and inequities; and a session at the 2021 ULI Virtual Spring Meeting that focused on low-density rental housing.  

Leveraging Federal Infrastructure Investment for Housing and Transportation Opportunities 

The Shaw Symposium, endowed by former ULI chair Charles “Charlie” H. Shaw, was held virtually and was cohosted by ULI’s Terwilliger Center for Housing and Curtis Infrastructure Initiative. The symposium focused on the nexus of infrastructure, housing, and equity.  

As the United States begins to emerge from a tumultuous year, Congress passed the $1.2 trillion Infrastructure and Jobs Act and continues to debate additional housing and infrastructure spending through the Build Back Better Act, and communities increasingly shift their focus to recovery, it is important to look to the future informed by the knowledge of the past. Many of the challenges facing today’s cities and neighborhoods are linked to the decisions made decades ago. Those decisions include positive, transformational investments in transit, parks, and other community assets that have been critical to restoring urban vibrancy. However, they also include the disastrous legacy of redlining, segregation, and the intentional dismantling of neighborhoods—all of which have produced generational harm for minority households and black families in particular.  

A new, more equitable approach to regional planning and investment is critical, not only because it is morally just, but also because it is a key aspect of economic growth and opportunity. If the United States is to compete in a rapidly changing global economy, we must build our cities, towns, suburbs, and regions in a manner that enables and empowers all people to meet their full aspirations and potential.  

The symposium put forward a set of actionable recommendations: 

  • Enable equitable access to transportation, particularly transit; 
  • Improve access to and attainability of housing for moderate- and lower-income households; 
  • Reconnect and reinvigorate neighborhoods damaged by past infrastructure investments; 
  • Address historical disparities in community investment, particularly those based on race, and ensure equitable access to the economic opportunities and the benefits of development; and 
  • Improve health, enhance environmental sustainability, and reduce climate risks. 

As such, a distinguished group of 2021 Shaw Symposium participants elevated leading practices that have informed a summary report, which includes high-level recommendations and a framework to assist local communities in designing and implementing infrastructure investments. The full report can be accessed on ULI’s Knowledge Finder here. Questions about the report can be directed to infrastructure@uli.org.  

Confronting the Acute Shortage of Attainable U.S. Homes 

COVID-19 has exacerbated a crisis of middle-income households being unable to find attainable homes, with frontline workers faring particularly badly, according to a comprehensive data-informed study from the ULI Terwilliger Center for Housing. 

The study identifies gaps in home attainability across the United States and highlights occupations that have been significantly affected by the global pandemic and the resulting economic disruption. 

The ULI Terwilliger Center’s 2021 Home Attainability Index report provides a high-level snapshot of the extent to which a housing market provides a range of housing choices attainable to the regional workforce, with an intentional focus on issues related to racial, socioeconomic, and intraregional disparities and inequities. 

The Index is designed to support local municipalities and members of the development community who are working to address longstanding challenges related to home affordability; it includes an interactive spreadsheet enabling users to filter and segment data via various metrics. Over time, the Index will enable national and regional comparisons to inform decisions about housing production, policy, and financing. 

Since the release of a pilot edition of the Index in 2020, the center has worked with a national cross-sector group of partners—including the National Housing Conference and the National Low Income Housing Coalition—to expand and improve the resource. It now has an array of 30 housing and equity-related metrics across five categories: (a) overall attainability, (b) homeownership attainability, (c) rental attainability, (d) neighborhood opportunity and access, and (e) housing production. It includes data on the 100 most populous metropolitan statistical areas (MSAs) in the United States, as well as an additional 12 MSAs served by ULI district councils. 

As part of the suite of Index-related resources, the ULI Terwilliger Center released a national summary report, which found the following: 

  • The most severe cost burdens among middle-income households are predominantly found in the most populous regions. 
  • However, a nationwide lack of attainable homes for critical members of the workforce is not limited to the most vibrant U.S. metropolitan economies.​ 
  • In particular, lower-income households nationwide struggle to find attainable rental units.​ 
  • Segregation—both by income and race—cuts across market types and geographies, and high housing costs threaten to worsen racial and socioeconomic disparities. 

The 2021 Home Attainability Index report includes an “Occupational Analysis,” which compares the amount needed to afford various housing types with the median amounts earned by various occupations in each region. In light of the COVID-19 crisis, 12 affected occupations were selected to demonstrate whether there is a surplus (a household earns more than necessary to afford the given housing type without being cost burdened) or a gap. 

The occupations fell into three broad categories that could face heightened risks: health care workers, frontline workers, and workers with an elevated risk of income disruption. Significantly, a median-wage worker in only three occupations that were examined—geriatric nurse, cardiac technician, and long-haul delivery truck driver—could afford to rent a modest two-bedroom apartment in more than half of the regions in the data set. 

“Patterns of housing insecurity and racial and socioeconomic inequality that existed prior to COVID-19 have been exacerbated by the pandemic and the associated economic downturn,” says Michael A. Spotts, author of the report and a visiting research fellow with the ULI Terwilliger Center for Housing. “We are staring in the face of a situation in which many of the people who were critical in getting the population at large through this crisis face years of economic uncertainty and hardship as the country recovers. The Home Attainability Index will help shine a light on where the main issues are, enabling us to find potential solutions to creating a more equitable society.” 

Also included within the Index-related resources is a “Housing, Health, and COVID-19 Crisis” policy brief that highlights several policy activities that can support frontline and economically disrupted workers: 

  • Maintaining eviction protections for the duration of the crisis, 
  • Providing ongoing rental assistance to support very-low-income households, 
  • Developing policies and funding streams that address the burden of deferred rent and mortgage payments, and 
  • Providing capital to maintain and preserve the viability of the housing stock that serves lower-income households. 

Access the report in Knowledge Finder.  

Low-Density Rental Housing Addresses Rising Demand despite Barriers 

Though low-density rental housing is gaining popularity as a sector, it continues to face hurdles in the market, including competition with the hot for-sale housing market for land as well as lack of familiarity with the product among communities, speakers said during a session at the 2021 ULI Virtual Spring Meeting. 

Of 48.4 million U.S. rental households, 14.9 million live in single-family-housing rentals, according to Todd LaRue, managing director with real estate analysis firm RCLCO and session moderator. Most properties are owned by small investors or are mom-and-pop operations, with only 2 percent operated by institutions. Most of these rental properties are located in the Sun Belt and the Intermountain West, with a large concentration in the Midwest, he said. 

The increase in demand for the product is being driven by two factors, LaRue said—rising housing costs and demographics. Although incomes have risen, they have not kept pace with home price increases, he noted. In addition, younger buyers—particularly those ages 35 to 44—are starting to form families, moving out of apartments, and seeking more space. 

That age cohort is expected to grow by 8 million over the next 15 years, which will create “tremendous demand,” said Ashley Casaday, senior director, capital markets, at RangeWater Real Estate, an integrated real estate company based in Atlanta. 

“If they’re above the age of 35, they’ve already lived through two down cycles; they likely have student debt; maybe they don’t have the money [for] a downpayment,” she said. “We’re also finding that they are really renters by choice: they like that lifestyle; they like being mobile and able to move if they get a new job somewhere.” 

Another demographic drawn to the product is baby boomers seeking to downsize from where they raised their kids, she said. “But the thought of jumping from that lifestyle to independent [retirement] living—they’re not ready for that; it’s too much,” she said. “Single-family rental has helped serve that need—of both of these demographics that are rapidly growing and expanding. So we’re big believers.” 

Sean Flannery, managing director, Pacific Coast Capital Partners, a San Francisco–based real estate investment trust, said because a vast majority of the single-family rental market is run by mom-and-pop operators, his company sees it as a promising market. 

“The expectation is, this is such a small part of the overall residential market, but it has much more potential to grow because it’s a product that hasn’t really been supplied so much in the past by an institutional investor,” he said. “With an institutional approach, we think the growth rate of the rental income is better than even the multifamily outlook over the next five to 10 years. We’re a long-term holder of the business. We expect to have to develop what we need because there’s not a lot of it out there.” 

Casaday said that when developing single-family rentals, her firm looks for markets with strong population and job growth, but also where the barrier to entry is lower and land costs are reasonable. In practice, she said, this means the company is finding the best economics “one ring outside of where we would traditionally have looked for multifamily.” 

Andy Carmody—managing director, investments, at Toronto-based Tricon Residential, a manager of single-family rental houses and apartments—said his firm is focusing its efforts on high-growth Sun Belt markets—the U.S. Southeast, Texas, and the “more affordable Southwest.” In higher-cost West Coast markets, it is difficult to generate a reasonable return because the underlying costs of existing properties or land are too high, and the rents that can be obtained are not correspondingly high. 

Those high costs are being driven in part by the very strong single-family home market, Casaday said. 

“The single-family for-sale market is so hot right now, not only is it driving up land prices, but we’re competing with homebuilders for these sites. They can pay more than we can for the land,” she said. “It’s making it very challenging, regardless of construction costs, to get some of these deals to work.” 

Carmody said for the financial considerations to work, his firm aims to develop sites at eight to 10 three- to four-bedroom entry-level detached houses per acre, each with its own garage, a driveway, and a small private yard, but that it often faces roadblocks because sites are hard to find and cities are reluctant to approve projects at that density. 

“They’re not conventional single-family that conforms to single-family zoning, and they’re not multifamily,” he said. “They fall in this middle spot, which requires a tremendous amount of time—hand-holding, engagement, discussion, question and answer, and making your way through all the regular municipal approvals.” 

Panelists agreed that both municipalities and neighbors need to be educated about this type of development—that it is a class A product that attracts families with good household incomes, and that it can range from a cottage to a townhouse to a five-bedroom detached house. For residents of a community that is institutionally owned and managed, “it’s a foreign concept to think that they would have a community that looks like theirs but it’s full of renters,” Casaday said. 

She predicted that sometime in the future, there will be a zoning designation specifically for single-family rental housing. 


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