State action solves affordable housing

With a national shortage of homes for sale and rent, affordable housing is increasingly out of reach for a growing number of Americans. As the primary regulators of land-use and zoning policies, local governments are perhaps best positioned to reform policies that limit the supply of housing. However, state governments can also play a significant role in increasing housing production and preservation and improving housing affordability. Below are five meaningful actions that states can take. 1. Coordinate affordable housing financing across multiple funding sources. Financing for affordable housing production relies on a complicated matrix of funding sources, often called the “capital stack.” These sources can include tax credits, housing bonds, private equity, and grants. Accessing these financing options often requires separate and complex applications and administrative processes. By serving as a clearinghouse for these various funding options, a state can help expedite the application process and enhance the ability of developers to formulate a successful capital stack. Examples of how states have implemented this clearinghouse function include: Creating a consolidated application to access available funding sources. Massachusetts is often cited as a model for its consolidated application and its statewide agency that coordinates financing support. Signing memorandums of understanding (MOUs). Instead of creating a new government office or agency to facilitate financing, some states use MOUs. In an MOU, a state can formalize a framework for stakeholders to coordinate application requirements and share developers’ documentation.