Josh Crawford: It’s time for conservatives to tackle affordable housing, create a better path forward

The goal of public policy is to solve real-world problems. More than that, it is to improve people’s lives and make them more prosperous. Prosperity, rightly understood, isn’t just about more money in your bank account, it’s about the life well-lived. It’s about being able to be safe in your community, about your children having more opportunities than you did, about civic life.

Over the years, Conservatives have developed volumes of research and a robust set of policy recommendations related to the most pressing issues. From economic freedom to public safety and education to family structure, Conservatives have led the charge in pushing for reforms to increase human flourishing. Until recently, however, one core element of prosperity has been noticeably absent from Conservatives’ attention, stable and affordable housing.

Josh Crawford

Its absence from the Conservative agenda makes some sense. Local housing ordinances and zoning laws stomp on private property rights and things like rent controls and affordable housing mandates scream government overreach and don’t work. But this doesn’t mean there isn’t a need for attention on this issue or solutions palatable to Conservatives.

In a recent report done here at Pegasus Institute, Molly Ronvinski and Erinn Broadus find that in many Kentucky counties, more than 40 percent of households are spending more than 30 percent of their annual income – the typical benchmark for housing to be considered “affordable” – on housing.

A lack of adequate affordable housing can be a major inhibitor to economic growth. Let’s say you own a business in Hardin County. You want to expand your team of three to a team of six. You’re going to pay $15 an hour. Unfortunately, that $15 an hour is below the $16.27 an hour needed to afford median rent for a two-bedroom apartment and be at or below 30 percent of income being spent on housing. That required wage is $17.65 in Jefferson County, $17.50 in Scott County, and $16.17 in Warren County. This can hamper economic growth. A survey of over one thousand renters found that over half of those surveyed are looking for a new job because of housing costs.

But what we do about it matters as much as acknowledging the problem. A sounder approach to expanded affordable housing should focus first and foremost on getting the government out of the way. Zoning laws and regulations on building heights, lot sizes, and parking requirements have been identified as drivers of the housing shortage. A study of 11 metropolitan cities found that by relaxing regulations, an estimated additional 424,000 families could receive housing assistance – a 13% increase – from the two largest Housing and Urban Development rental assistance programs.

The next part involves partnering with private developers to create more affordable housing. The best way to incentivize this would be to create a state-level Low Income Housing Tax Credit (LIHTC) program. Created as a part of the Tax Reform Act of 1986 signed into law by President Reagan, the federal LIHTC program gives state governments tax credits for the development of lower-income rental housing and reduces tax liability to incentivize private investment in new construction. Nineteen states have built off the federal program or created entirely separate programs to address the housing issue on a state level.

In Missouri, each dollar spent on its state program resulted in $10.59 in economic activity and $5.81 in gross state product. Missouri anticipates $5.23 billion in state-wide economic impact and $2.86 billion in gross state product, as well as the creation of 35,600 jobs from construction and operations.

It’s time for Conservatives to embrace increased affordable housing as a precondition of prosperity. Doing so doesn’t require that we adopt the policy recommendations of our friends on the Left. There is a better and more Conservative path forward.

Josh Crawford is the executive director of the Pegasus Institute