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U.S. Affordable Housing Market Should Follow Europe’s Lead Maybe it’s because European culture has been around a lot longer, or perhaps the Europeans view adequate affordable housing as a right, not a privilege. Whatever the reasons, European countries have a much more positive, proactive approach to providing affordable housing for their people than we have here. I recently had the opportunity to be part of a group of U.S. affordable housing officials to see first-hand the great strides that the Netherlands and the United Kingdom have made in providing quality affordable housing to their citizens. In both countries, affordable housing is a top public priority and local and national governments have a well-articulated housing strategy and implementation plan. Sponsored by the Housing Partnership Network, a U.S.-based association of regional nonprofit entities active in the affordable housing field, the tour’s purpose was to gather insights and lessons that can inform strategy and vision for a more effective affordable housing policy in this country. Unlike California and many other parts of our nation where the lack of affordable housing is a continuing crisis, in the U.K. and Netherlands low-cost housing is available to people who need it, when they need it. There are several reasons for the differences between the U.S. and these European countries when it comes to lower cost housing. First, development of affordable housing in most of Europe is exclusively the domain of dedicated nonprofit companies. That’s all they do and they’re very good at it. A major benefit of this arrangement is that the nonprofits don’t have to compete against private for-profit developers for funding and other limited resources. Another major point of departure is eligibility. In the U.S., a person or family living in the most affordable housing must qualify for that housing annually; in the U.K. and Netherlands, once qualified, you are qualified for life. Financing of affordable housing projects in Europe is also much simpler. Some of the affordable projects our company has built in California required as many as six to eight separate funding sources, frequently involving federal, state, and local agencies, commercial banks and private investors. These arrangements become an enormously complex financing package that takes a long time to put together. In the U.K. and the Netherlands, affordable housing developers have direct access to significant financial resources, and they don’t have to perform back flips for the money. It is these simplified financing programs that play a key role in making lower cost housing more plentiful in Europe than in the United States. |
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