Written by Nick Brunick and Patrick O'B. Maier, Published by the Journal of Affordable Housing, Volume 19, Number 2, Winter 2010

As 2010 begins, we emerge from a decade of housing boom and bust. Most Americans find themselves in no better shape (in terms of jobs, incomes, and household wealth) than they were when the new century dawned a decade ago. Poor and working Americans endured an especially bitter decade, where the benefits of the housing boom too often passed them by while the ramifications of the housing bust swamped them like a tsunami. Few would categorize the first decade of the twenty-first century as a time of expanding opportunity and prosperity.

The causes of the bust can be found in numerous places, some quite infamous, such as the mortgage brokers who made "liar loans," the co-opted credit rating agencies that endorsed toxic products, the financiers who floated collateralized debt obligations and peddled derivatives, and the lenders that failed to underwrite mortgages. But less visible forces were also at play--a national obsession with homeownership, a national delusion that home prices never fall, the long-standing national failure to invest in affordable rental housing, and the long-standing national refusal to pursue policies that can create affordable homes for working people in safe neighborhoods near jobs, transit, good schools and other key sources of opportunity. As a new decade dawns, this article aims to highlight positive policies at the state and local level that can inform a new direction for national housing policy--a new direction that can restore our nation's legacy as a land of opportunity.

As we sort through the wreckage of the housing bust, three key facts emerge. One, our nation still needs to create and preserve more affordable housing. Two, our nation needs to create and preserve more affordable housing in locations of opportunity--near jobs, transit, good schools, and essential amenities like high-quality banks, hospitals, parks and grocery stores. Three, we need to do both of these things in a coordinated way so that we can create communities that are livable for everyone--that are sustainable, economically competitive, and full of opportunity. In fact, one could argue that we cannot successfully confront and overcome our national challenges in energy policy, protecting the environment, supporting families, caring for our elderly, or restoring our economic competitiveness without taking these three steps.

Unfortunately, the federal government took a vacation from leading on these issues over the past thirty years. From the late 1970s until the present, federal investment in housing and community development decreased significantly and federal policy leadership in these areas was almost non-existent. Into this policy vacuum stepped state and local governments compelled by pressing circumstances to innovate.

This article focuses on two kinds of state and local government innovations: (1) inclusionary housing efforts to create and preserve affordable housing in mixed-income communities and in good locations; and (2) state and local efforts to generate new public and private investment for affordable housing.

Without inclusionary housing policies, our society will fail to create enough affordable housing in the right locations so that we can effectively deal with many of the issues intertwined with the affordable housing crisis--such as traffic congestion, concentrated poverty, regional economic competitiveness, sustainable development, clean air and water, and school quality. Without public dollars or public incentives to entice private dollars to the task, the private market will fall short in producing enough decent, safe, and affordable homes and apartments for all who need them. Without both tools acting together, we have little hope of moving closer to the goal of a nation where every community is a safe, vibrant, and sustainable place to live.

To recover from the chaos of the last decade, we will need a revitalized federal role and continued aggressive efforts at the state and local level, all in partnership with the private and not-for-profit sectors. This article examines inclusionary housing efforts at the state and local level, efforts to generate new public and private investment for affordable housing at the state and local level, and then makes the case for a new direction in national policy in order to renew our nation as the land of opportunity in the decades to come.

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