HousingPolicy.org provides a menu of opportunities for state and local governments to become involved – along with their private and non-profit partners – in creating more decent, affordable homes. The "government" role in housing refers to the variety of activities – taxation, zoning, subsidizing, regulating, lending and others – that take place at several levels of governance – federal, state and local.

At the federal level, the government serves primarily as a funder, providing financial resources through federal tax policy such as the home mortgage interest deduction, direct subsidies such as assistance to low-income renters and indirect subsidies such as tax credits to builders of affordable homes. Through its other funding mainstays – the Community Development Block Grant Program (CDBG) and HOME – the federal government provides funds to states and localities as well as the flexibility to address their area housing needs.

CityHomes on Park, Minneapolis MN --photo courtesy of LHB Inc.

State governments play an important role in housing, too. They help lower the cost of homeownership through mortgage revenue bond programs, for example. They also receive portions of CDBG and HOME funding that they can allocate, along with state matching funds, to areas throughout the state. Low Income Housing Tax Credits (LIHTC), a major source of financing for new rental homes, also are allocated at the state level. Some states promote housing and community development through state-run housing trust funds or other funding mechanisms. It is important to recognize that the state role goes beyond providing funding. Among other key roles, states can provide incentives or requirements to encourage localities to adopt policies that will help expand the supply of affordable homes. States also can serve as conveners and educators, as well as facilitators, through strengthened enabling legislation. To leave this section and learn more about the state role, click here.

Local governments are often where the rubber meets the road as far as housing is concerned. From implementing zoning regulations and processing requests for waivers to issuing building permits, and conducting housing code inspections, localities play a direct role in shaping the housing that gets built in their communities. Some localities also donate publicly-owned land or property that has gone into tax foreclosure and contribute local funds to build or rehabilitate homes.

When considering what local governments can do to expand their impact, it's worth noting that not all government initiatives require spending money. By reducing barriers to development, expanding allowable densities, and creating incentives or requirements for the inclusion of affordable homes within new development, local governments can expand the supply of affordable homes with minimal public expense. Visit the Toolbox section of this site to learn more.

When the lack of affordable homes – both rental and homeownership – threatens the vitality of the community, homebuilders, bankers and realtors certainly are affected, but so too is the local business community at-large. Individual employers as well as Chamber of Commerce, economic development groups and other industry associations can work alongside Mayors, local officials and affordable housing developers to help expand housing opportunities for low- and moderate-income working families.

What can they do? The private sector can participate in and underwrite media campaigns to raise awareness of the need for workforce housing. As the drivers of jobs, tax, revenue and economic development, area employers and business associations hold considerable sway with city council members and legislators when it comes to reforming zoning regulations or other practices that limit the supply of affordable homes. By advocating for more effective local housing policies and actively supporting efforts to expand the supply of housing, private employers can help both themselves and their communities. They also can advocate for state grants for communities that meet their fair share of the need for affordable homes and tax credits for employers that help employees obtain housing. Finally, they can participate directly in Employer Assisted Housing programs that help employees with their housing and, in turn, provide themselves with a stable workforce. Click here to go to the HousingPolicy.org section on employer assisted housing.

It is also important to recognize the critical role that private-sector developers play in expanding the overall supply of housing. One reason why housing prices are rising faster than wages is that housing supply has not kept up with demand. With the right set of market incentives in place, private-sector developers will respond by increasing the supply where needed, slowing the rise of housing costs. With creative policies to keep that housing affordable over time also in place, communities can go a long way towards meeting both their economic development and affordable housing goals.