The Affordable Housing Crisis: An Intersection with Race and Covid-19

By Aryn Phillips

During an equity and design conversation held within the PLA group this summer, Alex Padgett and I chose to discuss the inequities within the existing homeless crisis, calling to action the need to focus on communities of color for affordable housing projects. During our conversation, many designers brought up nuances and complications with affordable housing policies and design, and it became apparent that while many of us within the field of planning and design may understand the need for affordable housing, our clients and communities may not. Stigma surrounding affordable housing often leads to opposition within communities, leading to questioning surrounding “the type of people” who will be living in affordable units. Furthermore, so many people in our conversation were shocked to hear how heavily impacted communities of color were by homelessness that I felt compelled to help provide some resources so that we can all be on the same page in identifying the problem at hand. During my research, I was curious to help formulate a current snapshot of where housing affordability stands right now by seeing how much the pandemic may have worsened housing disparities or exacerbated numbers of houseless individuals, particularly in Portland. I believe that in order to properly address the housing crisis, we need to extensively educate ourselves on best practices for navigating policies, advocating for change and designing for our clients. I hope the information provided here will give you a similar interest in learning more about how we can solve this problem at hand.

What is affordable housing?

Affordable housing is a term that causes a lot of misconception within our communities. Many assume that affordable housing is only for those in the lowest income bracket, and while that group is most impacted by increased housing costs, we all have a threshold for what is considered “affordable”. The department of housing and urban development defines affordable housing as the cost for housing and utilities that does not exceed a percentage threshold of the occupants’ gross income. In the 1940s, federal subsidized housing set the affordable rent rate at 20% of gross income. This number rose to 25% in 1961, and 30% in 1981, where it has become the standard indicator of affordability for housing, whether it be rented or owned. Households that spend more than this are considered cost-burdened, and those who spend more than 50% of their income on housing are considered severely cost-burdened.

Who can’t afford housing?

As housing costs have risen more rapidly than wages since the 1960s, the issue of cost burdening has become ever more prevalent. In 2019, 30.2% of all households nationwide were cost-burdened and 14% were severely cost-burdened. Renters face higher cost burdening, at rates of 46% moderately cost-burdened and 24% severely cost-burdened, compared to homeowners at 21% and 9% respectively. By contrast, in 1960, only 12% of renters were considered cost-burdened. The primary reason for this is that housing costs have risen faster than the median wage, especially among renters. For the past eight years in a row, the median sales price of single-family homes rose faster than median household income.

Due to high housing costs, homeownership has been in a steady decline for over a decade. High expenditures of income towards rent make saving to purchase a home much more difficult. To combat severe cost burdens, those seeking housing often have to look further away from where they work, overcrowd their families into houses that are too small, and reduce spending in other areas such as transportation, health care, food, and education. Households that are cost-burdened are also much less likely to have sufficient savings for unexpected events such as illness, unemployment, or disaster. 

Who is most impacted by housing cost burdens?

The U.S. has a long and recent history of discrimination against African Americans, stemming from lasting impacts of the Jim Crow era, and filled with redlining policies and systematic displacement of black communities. From 1933 to 1964, public policies denied housing, mortgages, and insurance to black Americans and segregated black families into urban housing projects with little access to community infrastructure. Meanwhile, white middle- and lower-class families were able to purchase housing at state-sponsored rates and have continued to reap the benefits of owning that property as it gains value, passing down that accrued wealth through generations. Once communities of color were established in segregated areas, many were displaced for developments intended to benefit white communities. One example is Portland’s Albina district, which suffered resident displacement and tearing down of homes during the ‘60s and ‘70s to build the I-5 freeway and expand a local hospital. 

Even today, implicit bias and racism among banks and realtors results in fewer black families being approved for mortgages. According to 2020 data from the Home Mortgage Disclosure Act, lenders deny mortgages for black applicants at a rate 80% higher than that of white applicants, further immobilizing black families on the path to homeownership. Racism, segregation, redlining, and further displacement of black communities have resulted in only 43% of black households owning their home, compared to 73% of white households. People of color (POC) are twice as likely to live in neighborhoods with concentrated poverty and 5-12% more likely to have cost burdens than their white counterparts. The lack in homeownership has only increased the wealth gap between white and black families, thus perpetuating a cycle of black households bearing a larger and larger portion of housing cost burdens. 

In Portland, homelessness disproportionately impacts communities of color, with POC accounting for 39% of the homeless population. In particular, Portland recorded a 48% increase in unsheltered African Americans from 2013-2015 and saw increases in homelessness among Native Americans, Latinos, and Asians. While Portland’s homeless shelters are consistently overcrowded, half of Portland’s homeless population remained unsheltered in 2015. Nationwide, African Americans comprise 13% of the general population and 40% of the homeless population. Native Americans represent 1% of the general population and 4.2% of the homeless population. Those who share the highest housing cost burdens are also most likely to face housing insecurity and homelessness.

How has COVID-19 impacted the housing crisis?

The COVID-19 pandemic has impacted the housing market and housing crisis in multiple ways. For those already living in a cost-burdened situation, COVID presented as an unforeseen and uncontrollable disaster. Overcrowded homes prohibited quarantine in the case of infection, disproportionately impacting Hispanic, Asian, Native American, and African American households. Many people lost their jobs, and in the summer of 2020, 25% of renters failed to make a rent payment in full or on time. Many cities saw an increase in homeless individuals during the start of the pandemic due to evictions and loss of income, and systems in place to provide aid faced the additional stress of maintaining safe measures to protect this particularly vulnerable population. Data has shown that loss of income from the pandemic and failure to pay rent and mortgages has disproportionately affected POC.

In order to protect renters who were unable to pay rent due to COVID’s impacts, the federal government put a moratorium on evictions. This, however, has only been a temporary solution to what will likely be a long-term issue. As we see the moratorium expiring, many tenants will be expected not only to resume paying regular rent, but also promptly pay backlogged rent from previously missed months. Some states, such as Oregon, have enacted extensions on paying backlogged rent and are requiring renters who take advantage of this system to apply for rent assistance. These systems have been confusing and difficult to navigate for tenants, and it is not known if these programs will be enough to combat the disparity in rent payments, or if we will still be seeing evictions increase once government protections expire. 

Not only has COVID created additional strain between renters and landlords, but it has heavily impacted the market value of homes. Between quarter 1 of 2020 and quarter 1 of 2021, housing prices increased by 16% on average nationwide, with some metropolitan areas, such as Boise, ID, seeing 28% increase in housing values. Portland saw a slightly less, but still precipitous, increase of 14%, with the highest increases seen among homes below median market value. This was due to a restricted housing market with fewer homes selling during the pandemic and increased buyer demand driving up the market value. This growth is unsustainable and further exacerbates the affordable housing gap, decreasing the likelihood of those looking to get out of the renting cycle being able to purchase their first home anytime soon. Homes being built during the pandemic with increased costs of materials will likely further increase market value for new homes for purchase.

Conclusion

People of color have consistently faced greater barriers to acquiring affordable housing, and despite U.S. policy no longer explicitly allowing segregation and redlining, the structural racism of the Jim Crow era remains in the housing market to this day. The pandemic has only further exacerbated existing disparities in housing affordability and homelessness among people of color, with people of color experiencing higher rates of layoffs, more difficulty paying rent on time, and higher exposure to COVID-19 itself. The challenge of providing affordable housing for all is greater than ever, and it requires careful and considerate planning and design to be successful and avoid further alienation of the communities of color who need it most.

For more information on how Otak chooses to combat the housing crisis through our work, please read the following article: Pushing the Boundaries of Affordable Housing

Resources:

“2020 State of the Nation’s Housing Report: 4 Key Takeaways for 2021.” Cost of Home. Habitat for Humanity. Accessed 2021. https://www.habitat.org/costofhome/2020-state-nations-housing-report-lack-affordable-housing. 

Balasubramanian, Sai. “The Covid-19 Pandemic Has Fueled a Crisis in the Housing Market.” Forbes. Forbes Magazine, April 27, 2021. https://www.forbes.com/sites/saibala/2021/04/27/the-covid-19-pandemic-has-fueled-a-crisis-in-the-housing-market/?sh=4d8cb60a5928. 

Bloom, Ester. “A Shocking Number of Americans Live in Housing They Can’t Afford, According to Harvard Study.” CNBC. CNBC, July 13, 2017. https://www.cnbc.com/2017/07/13/harvard-study-heres-how-many-americans-cant-afford-housing.html. 

“COVID-19 Homelessness Response.” A Home for Everyone. A Home for Everyone, February 2, 2021. http://ahomeforeveryone.net/covid-homelessness. 

“Defining Housing Affordability: Hud User.” Defining Housing Affordability | PD&R Edge. U.S. Department of Housing and Urban Development. Accessed August 18, 2021. https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-081417.html. 

Gartland, Erik. “2019 Income-Rent Gap Underscores Need for Rental Assistance, Census Data Show.” Center on Budget and Policy Priorities. CBPP, September 18, 2020. https://www.cbpp.org/blog/2019-income-rent-gap-underscores-need-for-rental-assistance-census-data-show. 

“Homelessness Statistics.” Homelessness Toolkit | City of Portland. The City of Portland, February 12, 2016. https://www.portlandoregon.gov/toolkit/article/562207. 

“House Price Index Datasets.” Federal Housing Finance Agency. FHFA, 2021. https://www.fhfa.gov/DataTools/Downloads/Pages/House-Price-Index-Datasets.aspx#qat. 

Olick, Diana. “A Troubling Tale of a Black Man Trying to Refinance His Mortgage.” CNBC. CNBC, August 19, 2020. https://www.cnbc.com/2020/08/19/lenders-deny-mortgages-for-blacks-at-a-rate-80percent-higher-than-whites.html. 

“Oregon Eviction Moratorium FAQ.” Portland.gov. City of Portland, Oregon, 2021. https://www.portland.gov/phb/rental-services/helpdesk/oregon-eviction-moratorium-faq. 

Parker, Njeri. “The Link Between Racism and Homelessness.” JOIN. JOIN PDX, July 23, 2020. https://joinpdx.org/the-link-between-racism-and-homelessness/. 

Rep. America’s Rental Housing – Meeting Challenges, Building on Opportunities. Joint Center for Housing Studies of Harvard University, 2009. 

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Roos, Roy. “Albina Area (Portland).” The Oregon Encyclopedia. The Oregon Historical Society, May 15, 2021. https://www.oregonencyclopedia.org/articles/albina_area_portland_/#.YRrGSYhKiUk.