Why Is the Rent Too Damn High?
Because We Ignore the Real Problem

The Antiplanner’s recent coverage of housing affordability has focused on single-family homes. But a recent article by Andrew Jakabovics points out that rents are also rising, both in dollars and in the percent of people’s incomes that it consumes. “About half of all renters live in housing considered unaffordable,” meaning they spend more than 30 percent of their income on rent, Jakabovics says. Since 2000, the share of renters spending more than 30 percent of their incomes on rent has grown by more than 40 percent.

Unfortunately, Jacabovics never discusses the real cause of this problem or the great geographic disparities in rents. A close look at the data (American Community Survey table B25071) reveals that renters are hardest hit in Florida, Hawai’i, California, and Oregon, all states with strong growth-management laws. (Florida weakened its law in 2011, but few if any regions have weakened their growth-management plans since then.) Meanwhile, rental housing is still very affordable in states such as Texas, Utah, and Wisconsin.

Hawai’i and California aren’t surprising, but it is a bit surprising to see Oregon near the top of the list. Oregon’s “smart-growth” policies were supposed to avoid this problem by building a lot of multifamily housing in place of the single-family housing that has been made unaffordable by the urban-growth boundaries around every city in the state. But this clearly hasn’t worked.

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Why doesn’t Jacobovics distinguish between states and regions where housing is unaffordable and states where is still affordable? One possible answer is Enterprise Community Partners, Jacabovics’ employer, which is heavily funded by your tax dollars to promote affordable housing, that is, the construction of a few units of subsidized housing for “low and moderate-income people.” Enterprise gets much of its tax support through Section 4 of the HUD Demonstration Act of 1993, which specifically designates the organization as a grant recipient.

Enterprise Community Partners has certainly found the business of promoting a few units of affordable housing, as opposed to making all housing more affordable, to be quite lucrative, at least for many of its staff. According to Enterprise’s IRS Form 990 for 2013, only a quarter of the organization’s $58 million annual budget went to grants aimed at making more affordable housing, while nearly 44 percent went for salaries and benefits. More than two dozen staff members earned more than $200,000 in salaries and benefits in 2013; Jacabovics himself collected a paltry $180,000. The United States of America gets along with just one vice president; Enterprise Community Partners has sixteen of them, many of whom make more than the $230,700 taxpayers paid to Joe Biden.

The organization’s tax form also admits that it spent nearly $600,000 on lobbying in 2013. Thus, groups like Enterprise Community Partners that focus on creating a few units of affordable housing while they ignore the real problem become self-perpetuating, as they lobby to continue their tinkering at the edges of affordability while they and the people who listen to them do nothing about the overall affordability problem in states with growth management.