Housing crunch: How bad is it?

By Mike Sunnucks, APG National Enterprise Editor, Apr 24, 2023.

Part I of II

Charlotte County Commissioners and North Port city leaders each held workshop discussions in February 2020 about affordable housing. It’s a problem human services advocates and business owners all say is a top concern.

Lack of affordable and workforce housing has been increasing acute problems across the country — and across communities.

The U.S. has a shortage of 7.3 million affordable units and those available to renters with extremely low incomes — below the federal poverty line, or 30% below median local incomes — according to the National Low Income Housing Coalition.

A March report from the housing group found the crunch is hitting 27 million low-income households across the country.

“Extremely low-income renters are facing a staggering shortage of affordable and available homes,” NLIHC President and CEO Diane Yentel stated on the report. “In the wake of the pandemic, federal housing investments are more critical than ever for sustaining our communities and helping low-income people thrive.”

The problem is the worst in 40 years, fueled by the coronavirus pandemic and its shutdowns and job and pay losses and made even worse by inflation and resulting interest rate hikes by the U.S. Federal Reserve Bank.

Those hikes are slowing down real estate and construction markets and will curtail wages and job growth with the goal of reducing high prices spurred by pandemic relief spending and central bank infusions.

“Between 2019 and 2021, the shortage increased by more than 500,000 rental homes, as the number of renters with extremely low incomes increased and the supply of housing affordable to them decreased,” according to the March housing report.

Some grim numbers

NLIHC’s new Gap Report finds the housing crunch existing in “every state and major metropolitan area.”

The federal poverty line is $14,580 annually for a single person, $19,720 for a two-person household and $30,000 for a family of four, according to the U.S. Department of Health and Human Services.

Florida has 575,379 extremely poor households and only 131,487 affordable units for that population.

California has more than 1.3 million very poor households — including 490,500 in Los Angeles — but only 309,800 affordable rentals, according to NLIHC. The state also has a deficit of 1.45 million affordable housing units for the working poor and other lower income households.

Oregon only has 32,113 affordable units for 141,795 extremely low income renters.

New York City and its suburbs need more than 653,100 new affordable units for the very poor and close to 825,000 additional residences for the working poor and those earning 50% or less than local median incomes.

The problem is also pronounced in more rural states as well as smaller communities.

Wyoming has a deficit of 10,215 affordable housing units for 17,417 poor households. Montana needs 15,741 new affordable units to close its low-income housing gap for more than 28,600 households.

Sky high rents

The problem also extends to cost burdens with rents up significantly since the pandemic.

Rents increased 22.6% in Florida and 18.6% in Tennessee just between 2021 and 2022, according to an analysis by financial firm Credit Karma.

They are up by more than 30% the past three years in high-growth markets such as Tampa (39%), Miami (37%), and Orlando (30%), according to an analysis released March 27 by The Apartment List real estate firm.

Some of the rent numbers are eye-catching in popular submarkets. The median rent for a two-bedroom in Hoboken, New Jersey is more than $4,200 per month. It’s approaching $3,600 per month in Miami’s Aventura area and more than $3,500 per month in Foster City and other areas of Silicon Valley and nearby San Francisco, according to The Apartment List.

Rent hikes are stressful across income categories with difficulties finding apartments or homes for rent under $1,500 per month in many communities — large and small.

But they are most intense for poorer families and households. According to NLIHC, 83% of low-income renters in Florida and 79% in Texas face extreme cost burdens when renting. That is when households spend more than 30% of their income on housing.

The cost burden figure stands at 78% for poor households in California, 80% in Oregon, 77% in Delaware, 75% in Maryland, 66% in Idaho, 64% in Wyoming and 65% in Montana.

Taking on the challenge

“Housing has been a challenge for a while here in Cheyenne and Laramie County,” Cheyenne Mayor Patrick Collins said.

Mountain West areas such as Wyoming, Montana and Idaho have seen substantial population growth in recent years.

“There is just not enough inventory in rentals or the ability to buy,” Collins said of the affordability crunch, rising prices and now the impact of higher interest rates.

Collins said the local waiting list for affordable housing help has grown to 1,800, up from 1,000 in 2021 when he was sworn in as mayor.

“We have a rising need,” Collins said, noting the impacts of inflation, including shelter and food, on local households. “They don’t make enough money to pay the rent with all the inflation.”

In Cheyenne, a two-bedroom apartment goes for $1,800 per month or more, the mayor said. “Rents have definitely gotten more expensive,” Collins said.

Sticker shocks for rising rents and entry level home prices are happening across the country — with higher mortgage interest rates also now accompanying the real estate price spikes during and after the pandemic.

But Collins, housing advocates and some private sector interests are working on the problem.

“We’ve gone out and recruited builders to help bring in more new construction.,” said Collins

But he said those efforts and overall building are being challenged by higher interest rates with the Fed hiking lending costs in its response to high inflation.

Cheyenne has also looked to its zoning rules and development codes to see where affordable and workforce housing can fit and fit better.

“We’ve changed some rules to allow for smaller homes to be clustered with an open area,” Collins said.

That has helped spark a new cottage development as well infill projects.

Dale Steenbergen, president and CEO of the Greater Cheyenne Chamber of Commerce, sees some progress regionally on bringing more housing for workers — including younger professionals and those with frontline jobs key to the economy and local communities.

“We’ve focused on workforce housing,” Steenbergen said.

That was keyed by a 2016 local housing study that showed the need for 5,000 new units and efforts to match builders and developers to what the local market needs.

“The average wage in Cheyenne is pushing $27 per hour,” Steenbergen said. “We have some available and very nice living units for $1,400 per month.”

Steenbergen said the efforts have been progressing with new units coming online with a number smaller infill and greenfield projects happening totaling “hundreds of units fitting our wage profile.”

The bigger challenge he said is addressing the housing shortage for lower income households. That is still a steeper hill to climb, the chamber CEO said.

Collins said there are new housing projects “being built all around town” with rents generally ranging between $1,300 and $2,000.

“We actually have projects being built all around town,” said the mayor, adding that those new units rent for between $1,300 and $2,000. “That will add a 1,000 more units.”

Local efforts

Across the country, jurisdictions large and small have been trying to address a housing crunch that hits from the very poor up the socioeconomic ladder to the middle class.

Some local governments are also looking at their own zoning rules as well as property holdings as they navigate housing shortages and high prices. Others are trying to better coordinate housing policies across agencies and jurisdictions.

In March, Sarasota County commissioners on Florida’s increasingly expensive gulf coast and areas of Southwest Florida still seeing the housing and inflationary impacts of Hurricane Ian have approved giving an 18-acre property in Englewood to a housing nonprofit — the Community Housing Trust.

The wooded, swampy and undeveloped property is slated to become home to 40 to 50 single-family detached affordable units along with protected wetlands areas — which includes a bald eagles’ nest. CHT President Brad Baker said some of the affordable units will be rentals and others for sale.

Baker’s local ties and positive reputation with local officials helped forge the deal with Sarasota commissioners opting to donate the land (which the county acquired in 2004 for $800,000) instead of previous plans that called for a $200,000 purchase price.

In Charlotte County, officials have set a goal of creating 200 affordable housing units a year for the next five years. However, this falls well short of a 2018 study that said Charlotte will need 10,918 units by 2025 to meet population demand — and about half of those will need to be affordable housing.

“If we don’t find affordable housing,” Charlotte County Commissioner Ken Doherty said at a recent meeting, “we’re going to have a problem.”

Angie Matthiessen, executive director of the United Way of Charlotte County, said the affordable housing crisis has only been made worse by Hurricane Ian, which has resulted in an “exponential increase” in requests for financial assistance through its Season of Sharing and United at Work programs.

“Many families were living paycheck-to-paycheck or on a limited, fixed income prior to Ian,” she said, “and now they are expected to find a way to cover the costs of home repairs or to purchase items damaged or lost in the storm.”

Families living in rental properties are either living in damaged homes or had to vacate, many with nowhere to go, she said. Some are having to double up with family or friends, while some have left the county.

“The need is truly great and deserving of attention and innovation,” Matthiessen said.

Back in Wyoming, Collins said many of the affordable projects he sees are also in the 45 to 50 unit range.

Some of that stems from available federal and other housing grants, available land and frequent community preferences for smaller affordable and workforce apartment footprints.

But, it is an uphill climb to fill a need for hundreds and sometimes thousands of needed new housing units with smaller projects.

“We need to build hundreds of units,” Collins said.

Part II of II


At its root, America’s housing crunch is pretty simple. There aren’t enough affordable homes and apartments for the very poor, the working poor and even many middle-class households.

However, solving a housing convergence of decades of stagnant lower- and middle-class wages, high rents and home prices, low affordable inventories, and, now, inflation and higher interest rate is anything but simple.

There are creative answers to the problem, but they can face an obstacle course of barriers.

The trends of living in tiny homes and smaller cottages, as well as RV and van life influencers, are well established on YouTube and other social media and cable television networks. The macro trend has sprouted scores of local and regional builders and outfitters offering smaller footprints and downsized lifestyles.

There are some cottage-type affordable housing developments in projects in Florida, Montana, Wisconsin and other states. But the tiny house real estate segment that has proved popular on social media hasn’t found widespread implementation to address the need for more housing for seniors, young people, immigrants and low-wage workers.


Steve Weissmann, CEO of the Tumblewood Tiny House Co. in Colorado Springs, Colorado, said the market segment has seen demand level off the past several years for tiny homes, and recent interest rate hikes have had even more of an impact.

“Since the interest rates have increased, we’ve seen a real decline in orders,” Weissmann said.

Duplexes are being built in the Punta Gorda Housing Authority district. SUN PHOTO BY ELAINE ALLEN-EMRICH

Weissmann said there are two main segments going the downsized real estate route.

“I call them the hippies and the hipsters,” he said, explaining the tiny house segment is frequently dominated by young couples aged 25 to 35 and single women aged 45 to 60.

“Right now, it’s market-driven,” he said of the real estate niche and some of the slower progress to enter affordability zones.

Weissmann said areas of the country that need more and less-expensive housing options the most often have zoning codes and community sentiments that are averse to smaller home developments.

“Typically, the areas who need it the most have the most restrictive zoning, and you can’t place them there,” Weissmann said.

Affordable and workforce housing — whether it’s in apartment complexes, townhouses or tiny home development — frequently still faces opposition from neighbors living in single-family subdivisions that are worried about negative impacts on real estate values, as well as added traffic.

He is seeing some RV and mobile home parks being turned into places for tiny homes, and some localities changing land-use and zoning policies to be more accommodating to smaller footprints.

“You are starting to see municipalities adopting new rules to allow for this,” the Colorado builder said.


In Wyoming, Cheyenne Mayor Patrick Collins said his city has changed some zoning rules to allow for smaller homes, and he’s directly reaching out to builders about smaller lots and square footage.

“I’m talking to developers about how we can start talking about smaller lots with smaller homes,” Collins said.

That faces challenges from a sometimes less-than-innovative homebuilding industry focused on the higher prices and profit margins of homes with larger square footages and footprints. Collins also sees the Fed’s series of interest rate hikes taking steam out of housing growth.

Dan Fitzpatrick, president of the Colorado-based Tiny Home Industry Association, said there have been areas of progress — especially in California, where state laws allow for “accessory dwelling units” in the backyards of properties. Those can be used as in-law suites, for other family members and potentially for home health aides. California has some of the most expensive housing in the country.

“It’s gone gangbusters — and it’s doing very well,” Fitzpatrick said of ADUs in Southern California and parts of a state with extreme affordable housing problems.

Fitzpatrick and Brad Wiseman, chairman and CEO of THIA, are also seeing affordability- based smaller home growth in Georgia, Florida and Texas — all high-growth states with affordable housing deficits that are generally friendly toward real estate developments.

“That’s what will drive the market,” Wiseman said of the affordability argument for smaller living.

He said an individual resident generally needs 200 square feet per person to be comfortable. The THIA group is working more with churches and community nonprofits on affordability answers.

Fitzpatrick said demographic and generational trends may eventually help with demand and supplies of smaller homes, noting 30% of U.S. households are already one person and 70% are two people.

Wiseman said the key is to get buyers and builders out of the “bigger is better” and “McMansion” mindsets, and then get local planners and councils to lose their resistance.

“The biggest challenge we have to do right has to do with zoning regulations,” Wiseman said.


State legislatures across the country are making pushes for more affordable housing.

Florida Gov. Ron DeSantis and fellow Republicans in the state legislature approved a $711 million package in March. It includes $259 million in low-interest loans to developers building workforce housing in a state keyed by tourism (with a focus on new housing near military bases), $252 million to encourage local governments to partner with developers bringing new housing, and $100 million to help police officers, teachers, military veterans and firefighters with down payments.

A number of affordable housing efforts — in Florida and other states — look to foster more infill housing in smaller under-utilized or vacant parcels. Those projects might not be large, but they can help chip away at rampant affordable housing shortages across country. Smaller projects also don’t stir as many worries among existing neighbors over community impacts, including property values.

The Florida package comes as housing activists and progressives push for rent controls and other potential constraints on significant rent increases faced by tenants across the socioeconomic spectrum.


In Oregon, the housing crisis has been pronounced in Portland — which has seen surges in homelessness and transient populations — as well as small towns and rural parts of the state. Problems with homelessness and rising crime rates have prompted Walmart and other stores to close locations in Portland.

Housing groups in the Pacific Northwest are offering some solutions.

Homes For Good manages public housing apartments and homes in Eugene and other Oregon cities. The Lane County, Oregon housing agency has also been working to redevelop the Lazy Days Mobile Home and RV Park in Blue River, Oregon, after it was destroyed by a fire in 2020. Homes for Good purchased part of the rural trailer park, with a goal to bring affordable housing options to the property with modular and manufactured home options.

Transforming RV and mobile home parks into affordable and workforce housing communities could gain traction in warm-weather markets such as Arizona, Texas, Florida, Georgia and South Carolina, which have a long history of snowbird and other transplant populations living in such communities.

Those states have also seen substantial increases in housing costs.

SquareOne Villages in Eugene, Oregon has also developed affordable housing cooperatives with more than 140 small living units across five communities. The nonprofit housing group has also developed 95-square-foot living pods aimed to provide temporary and more humane shelter for homeless persons and transients.


Dale Steenbergen, president and CEO of the Greater Cheyenne Chamber of Commerce (whose group has been involved with local housing efforts), said modular home construction — which entails building homes (and their systems and components) at centralized manufacturing plants instead of on-site, could help produce homes more efficiently and in greater numbers. That, of course, like other parts of the real estate and housing economy, hits up against interest rate hikes that are increasing mortgage costs and slowing down all kinds of construction.

Steenbergen said creative and innovative affordable housing efforts also need to be coupled with a reexamination of building codes and regulations to help ease construction and development costs to help lower- income ideas to pencil out.

“We’ve really increased the costs,” he said of how regulations, government fees and codes can drive up building costs.