Red and Blue States Voted Yes to Affordable Housing Measures

A growing share of voters in both red and blue states supported ballot measures in last week’s midterm elections to address housing insecurity, with many proposals approved with nearly 70% of the vote, according to a new analysis from Moody’s Analytics.

In Austin, voters approved a $350 million affordable housing bond in a city where affordable housing currently encompasses just 6% of total rental market share, says Moody’s senior economist Lu Chen. Average affordable housing rent stands at $1,113 per unit and market inventory has grown by 16.4% over the past two and half years. Chen says the bond will further incentivize and support planning, designing, acquiring, constructing, renovating, improving, and equipping affordable housing facilities for low- and moderate-income households in the region.

And in California, which has the second-largest gap in affordable housing supply, analysts are closely watching the vote count on several Bay Area ballot measures — including Berkeley’s Measure N, Oakland’s Measure Q, and South San Francisco’s Measure AA. — designed to narrow that delta.  Chen notes that all of these measures are related to a legacy 1950 amendment in California’s state Constitution requiring voter approval to build taxpayer-subsidized low-income housing. All three are currently garnering more than 50% of the vote. Oakland’s Measure U and Berkeley’s Measure L are also awaiting final results; the former seeks $350 million to build and preserve affordable hosing, while the latter requires two-thirds of the vote for a $200 affordable housing fund.

“Overall, Oakland-East Bay metro has an extremely tight affordable housing market with vacancy sitting at 1.5% from our latest trend data,” Chen says.  ”Average wait times for an affordable housing unit in this metro is over 90 months (or 7.5 years), topping all other metros.”

In Los Angeles, the least affordable West Coast metro, Measure HHH will see $350 million spent this fiscal year on housing construction, but just $75 million in the next fiscal year and $49 million the year after that. Prop ULA’s one-time so-called “Mansion Tax” is also too close to call as of Thursday, Chen says, but would allow the city to collect extra tax revenue on commercial and residential property sales exceeding $5 million for the construction of affordable housing, emergency rent subsidies and services for those at risk of homelessness.

In Florida, a proposed constitutional amendment that would allow the state’s legislature to pas laws to increase property tax exemptions for teachers, police, social workers, and other positions fell short of the 60% vote required to pass, but received 58.7% of votes with 99% of the precincts reporting.

“However, the distribution of votes did reveal that measures to alleviate housing stress for middle-income households do have support across the political spectrum,” said Moody’s senior economist Ermengarde Jabir.

In Palm Beach, a $200 million affordable housing bond was approved by others. The program, which is funded by an increase in property taxes, is designed to incentivize developers to build nearly 20,000 new units of affordable and workforce housing by 2032.

“With housing costs soaring, locals can no longer afford to live comfortably – essential workers and the middle-class workforce are being squeezed out of Palm Beach,” said Nick Luettke, another Moody’s economist. “Our latest data show multifamily asking rents in Palm Beach sit at $2,077, the highest among our Florida metros, while single-family home prices grew 20% year-over-year. Yet, Palm Beach’s affordable housing only accounted for 10% of the total rental market, with average rents at $1,055 per unit while inventory grew only 0.8% year-over-year. Approval of this program is anticipated to increase supply and alleviate housing costs. Its success now hinges on developer participation.”

Colorado also saw the only statewide affordable housing initiative to make the 2022 ballots pass, with just over 50% of the vote. The measure will set aside tax revenue for affordable housing by dedicating 0.1% of state income tax revenue for affordable housing programs, according to Moody’s data scientist David Caputo who estimates the measure could help build 170,000 homes and rental units over the next two decades.

Affordable housing bond measures in Asheville and Charlotte garnered approximately 70% of the vote as well, said Moody’s Thomas LaSalvia.

“Feeling the pinch of consistent in-migration and a growing presence of tech and finance, both North Carolina metros experienced above average multifamily rent growth throughout the last two years. Incomes rose, but lagged behind rent increases causing the rent-to-income ratios to surge in both cities (Charlotte +330bps, Asheville +502bps),” he said. “At 25% (Charlotte) and 27% (Asheville), each metro is still below the generally accepted ‘rent-burdened’ threshold of 30%, but this median calculation masks housing insecurity issues, particularly at the lower side of the income spectrum. This is especially true in areas where household in-migration has come from higher cost-of-living cities and states.”

Ultimately, the issue of affordable housing is likely to remain relevant in the near term, experts agree.

“The private market’s inability to adequately supply cost-effective housing commensurate with the country’s income distribution is a structural failure of our society,” the analysts say. And “for the foreseeable future, housing supply and insecurity will likely remain salient in the national discourse.”