“America is experiencing an affordable housing crisis!” We’ve seen the headlines. Housing prices are going up faster than inflation, measured by the Consumer Price Index (CPI). As is the norm, any perceived crisis is a call for government to intervene. One intervention is the advent of income-restricted housing, often called affordable housing or workforce housing.
Income-restricted housing comes in two varieties: rentals and owner-occupied homes. The properties have deed-restrictions that specify maximum income limits for the renters or purchasers. Tenants lose their leases if they earn too much. Purchasers don’t lose their homes, but government establishes a maximum resale price based on Consumer Price Index (CPI) increases and a few other adjustments.
The intent is to help low-income workers. But let’s take a deeper dive, and understand the severity of this crisis, who benefits, who gets hurt, how it makes economic sense to voluntarily restrict properties, and what might happen if we didn’t have these programs.
See the full article by Brian Vande Krol, June 30, 2022