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Health Systems and Housing: Collaborating to Promote Affordable Housing Policy Opportunities

As the COVID-19 pandemic evolves, authorities have urged Americans to stay home, and a growing number of cities and states are ordering residents to shelter in place, underscoring the critical need for safe, secure housing for all. As government leaders mobilize to immediately support people experiencing homelessness and help those at risk of homelessness, this moment also reveals that the nation must do more to build our long-term affordable housing infrastructure. 

In recent decades, housing has become less and less affordable, and supply has not kept up with demand.  Low-income renters typically spend more than half their incomes on rent, leaving too little for food, transportation, healthy food, and other expenses.  Evidence has shown that people’s housing struggles impact health in a range of detrimental ways, and in response, health systems have invested more than $1.6 billion to address the problem.

These investments are critical – and insufficient to meet the needs we face.  A study by the National Low Income Housing Coalition found that, to meet the affordable housing demand for very low-income residents, the U.S. needs 7 million more affordable and accessible homes. To amplify the impact of their investments and catalyze large-scale change, health systems are raising awareness about affordable housing policy solutions with the policymakers who represent their patients, members, and communities.

The Healthcare Anchor Network

In early March, leaders from 21 health systems serving 45 states convened to highlight urgent policy opportunities to address the affordable housing needs of our communities and discuss the vital connection between housing and health.  The Housing for Health Policy Day 2020 event was coordinated by the Healthcare Anchor Network (HAN), a collaborative of 50 leading healthcare systems that focuses on the role of hospitals and health systems as anchor institutions – institutions that are rooted in the communities they serve, with economic power in hiring, procurement, and investments that can be leveraged to foster greater health equity.  HAN members agreed that healthcare anchor institutions have an important role to play in addressing the affordable housing crisis, not only through investments but also through strategic partnerships and policy advocacy.

HAN members are working closely with housing leaders, including community development corporations, housing-focused federal policymakers and the affordable housing developer and intermediary Enterprise Community Partners, to deepen their knowledge about affordable housing development and policy barriers and opportunities. They shared with policymakers their health systems’ unique experiences and perspectives on the links between housing and health, based on their connections with patients, members, and community residents.  They encouraged policymakers to explore all possible options to ensure the COVID-19 pandemic does not exacerbate our existing housing crisis.  Participants also highlighted specific housing-related policies, including a focus on the importance of expanding and strengthening the federal Low-Income Housing Tax Credit (LIHTC), and advocating in support of the HOME Investment Partnerships Program. 

The Low-Income Housing Tax Credit (LIHTC)

The LIHTC program allows developers to sell federal tax credits to investors to raise funds to build affordable rental housing for low- and moderate-income people.  It’s considered by many to be the nation’s most successful tool for encouraging private investment in the production and preservation of affordable rental housing. 

The LIHTC has helped finance over 3.2 million apartments since 1986, providing approximately 7.4 million low-income individuals with homes they can afford.  The funds can be used to build new affordable housing or to preserve existing affordable housing that is at risk of conversion to market rate housing or that might fall out of use because of necessary but costly repairs.  It provides a “win-win-win” – developers are able to finance projects without a high debt burden, low-income residents benefit from affordable housing options, and banks get a real estate investment with an acceptable yield that satisfies their legal obligations under the Community Reinvestment Act to invest in the communities where they issue deposits. 

By lowering the corporate tax rate, the Tax Cuts and Jobs Act of 2017 decreased the value of the LIHTC.  In response, federal legislation has been introduced to make up for these losses.  The Affordable Housing Credit Improvement Act (S. 1703/H.R. 3077) would expand and reform the LIHTC program, and has attracted broad bipartisan support, with 38 cosponsors in the Senate and 220 cosponsors in the House.  It would incentivize the development or preservation of over 550,000 homes over the coming decade, create 510,000 jobs, and generate billions in wages, business income and tax revenue. The Act would accomplish this by increasing the housing credit 50% over current levels and establish a minimum 4% rate for Housing Bond financed development.  There are also additional provisions to help better serve hard to reach communities.   While the LIHTC won’t solve the affordable housing crisis, it is an important, proven strategy worthy of support.

HOME Investment Partnerships Program

Through the HOME Investment Partnerships Program, the U.S. Department of Housing and Urban Development (HUD) provides formula grants to states and localities to increase the supply and affordability of housing and homeownership for low-income families.  Funds are administered locally through community development departments or housing finance agencies, with participating jurisdictions providing a 25 percent match. Since 1990, over one million units of housing have been produced with HOME funds. According to HUD, every $1.00 of HOME funding leverages $4.20 of other public and private funds, and every $1 billion in HOME funding creates or preserves approximately 18,000 jobs.   

HOME funds can be used to finance a variety of affordable housing activities: rehabilitation of owner-occupied housing; assistance to home buyers; acquisition, rehabilitation, or construction of rental housing; and tenant-based rental assistance.  HOME provides states and communities with unmatched flexibility and local control to meet the affordable housing needs that they identify as most pressing and to react quickly to changes in their local housing markets.  As a result, HOME is considered one of the most effective locally-driven tools to increase access to safe, affordable housing. 

Funding cuts to HOME from 2011 to 2016 have drastically reduced the number of affordable homes it has produced, down by 60% since FY2010.  While funding has since increased, it is still below 2010 levels ($1.8 billion). The federal FY2020 budget appropriated $1.35 billion for the HOME program, but an increase to $1.5 billion would maximize the impact of HOME funds. Like LIHTC, this is only one of many programs needed to truly address the affordable housing crisis, but it is an important and proven program that merits support.

Taking Action

A range of policies are needed to address the affordable housing crisis. In addition to LIHTC and HOME, some health systems have joined a broad coalition of other groups in encouraging Congressional leaders to provide emergency housing assistance funding, and to consider creating a permanent emergency housing assistance fund.  They have advocated against changes that could weaken the Community Reinvestment Act (CRA), a policy that helps attract investment for a variety of activities including affordable housing, to ensure it serves communities most in need. They have also advocated against proposed changes to the 2015 Affirmatively Furthering Fair Housing rule because they ignore segregation and housing discrimination and shift the focus solely to affordability without attention to inclusion for the lowest income households.

They have supported state-level affordable housing bonds for developing and preserving affordable housing.  They also have encouraged city governments to adopt affordable housing policies, such as inclusionary zoning policies, which capitalize on market-rate development by requiring developers to set aside a portion of their housing units for lower-income renters.  As health systems continue learning from affordable housing partners, these efforts will likely grow and expand into additional areas.

During the COVID-19 pandemic, HAN has joined with housing and homeless services groups to urge Congress and the Administration to address housing instability and homelessness during and after the crisis.

For health systems who are interested in affordable housing, or in policy advocacy to promote the social and structural determinants of health, reach out to Bich Ha Pham (bpham@democracycollaborative.org)  to learn more about joining the Healthcare Anchor Network.  The Network convenes health systems in order to share best practices for advancing an anchor mission approach within their health institutions, address common challenges, co-develop new tools, and identify areas where collaborative efforts may be possible.

We encourage additional health systems to advocate for policies that promote the development and preservation of safe, affordable housing.  Affordable housing is a new area of focus for many of us, and we are glad to have opportunities to learn from housing partners as members of the HAN network.  Together, we can make a difference – moving beyond talking about social determinants of health, to take concrete actions that can improve the lives of our members and the communities we serve.

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