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Tag: affordable and public housing

  • More remote workers are willing to move in order to find affordable housing | CNN Business

    More remote workers are willing to move in order to find affordable housing | CNN Business


    Washington, DC
    CNN
     — 

    Housing is less affordable than it has been in about four decades. But buying or renting a home might be even less affordable now if it weren’t for the continuing impact of remote and hybrid workers that resulted from the pandemic, according to a recent study by Fannie Mae.

    The study, which was an analysis of Fannie Mae’s monthly National Housing Survey, with questions asked among more than 3,000 mortgage holders, owners, and renters between January and March this year, looked at how remote and hybrid work has changed over the past few years and its impact on housing.

    More people are willing to move to less expensive areas further away from offices in city centers than a few years ago, according to the report. Continuing remote and hybrid work, at levels remarkably unchanged from two years ago, is enabling people to move toward housing affordability, the study found.

    The report also revealed that “affordability” is the most important factor in finding a place to live, both for renters and homeowners.

    At the beginning of the year, 22% of remote and hybrid workers said they would be willing to relocate to a different region or increase their commute. Only 14% such workers were willing to do so in the third quarter of 2021, which is used as a comparison throughout the study and was when many workplaces attempted a “return to work” until the Omicron variant of Covid-19 pushed many employers’ plans back that winter.

    Workers who are able to break their ties to living in an area because of its proximity to work are able to spread out, reducing the competition for a historically low number of homes for sale that could push prices even higher.

    The research showed that among remote workers, all age and income groups have grown more willing to relocate or live farther away from their workplace since 2021. But younger workers — those between 18 and 34 — are significantly more willing than those older than them to live or commute a further distance from their work, with the share willing to do so jumping from 18% in 2021, to 30% in 2023.

    “We believe this greater willingness to live farther from the … workplace may be an indication that some workers are feeling more secure about their remote work situation … or their ability to find another job if their current employer were to change its policies,” wrote the researchers, in a summary.

    This is good news for remote workers during a time of crushingly low levels of home affordability.

    Remote and hybrid work may be here to stay. Or, it’s here long enough for people to buy or rent a new home because of it, the researchers found.

    Despite the demands by leaders of some prominent companies that workers need to head into the office or head out the door, the share of fully remote and hybrid workers has remained surprisingly constant in the post-pandemic era, according to the study.

    In the first part of the year, 35% of respondents worked fully remote or worked a hybrid mix of some time at a workplace and some time at home. That was only slightly down from 36% in 2021.

    While the share of workers going to a work site or office every day was unchanged at 49% in both 2021 and in 2023, the share of people working fully remote ticked up to 14% this year from 13% in 2021.

    Homeowners continue to be slightly more likely to work from home than renters. And those with more education and higher incomes are also more likely to have a work-from-home situation, which is consistent with 2021, the study found.

    Only 30% of lower-income people, earning 80% of the area median income, could work remotely or hybrid in 2021, and that dropped to 27% by this year. Meanwhile 42% of upper-income people, those making 120% of the area median income, were able to work from home in 2021 and that number did not change in 2023.

    Lower-income people — who are in most need of access to lower-cost housing, found further away from a city’s core — are also those least likely to work remotely, according to the survey.

    With housing affordability taking a hit over the past few years as rents rose, home prices stayed elevated and mortgage rates soared to a 22-year high, it is not surprising that “affordability” was the top factor for people when picking a new home, at 36%. This was a big jump from 2014, the last time the question was asked, when the top consideration was “neighborhood” at 49%.

    Homeowners and renters both showed growth in prioritizing “affordability,” but the increase was greatest among renters, shooting up from 21% in 2014 to 46% in 2023.

    “The change in preference for renters is truly remarkable, since not only did it more than double, but it represented a complete reversal of the relative importance of neighborhood cited by consumers as the top consideration in 2014,” wrote the researchers.

    In addition, despite the talk about moving for more space, “home size” as a factor for picking a next home was unchanged and still outweighed by “affordability.”

    “The striking shift toward affordability as the top consideration among overall survey respondents for their next move substantiates the need of households to find ways to manage around the significant rise in mortgage rates, home prices, and rents of the past few years,” the researchers wrote.

    And this is impacting where people look for a home and what they prioritize when they are searching.

    “Home affordability may also be a reason why we saw an increase in remote workers’ willingness to relocate or live farther away from their workplace, particularly given that, historically, a shorter commute to denser job markets was considered a premium amenity,” the researchers wrote.

    The suburbs are increasingly where people want to be, the report found, which is part of an ongoing trend since 2010. And that share has grown between 2021 and 2023.

    The researchers say the change to the housing market brought about by remote workers holds broader implications for the link between housing and the labor market.

    The growing share of remote-working renters and homeowners willing to live farther from their work location gives employers access to a wider labor market, which could be useful if a downturn in economic activity led to greater rates of job loss.

    “Having access to a larger labor market may also reduce the adverse effect on local home prices when a major employer or industry contracts,” the researchers wrote.

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  • ‘This is a war’: Californians seek affordable housing alternatives | CNN Business

    ‘This is a war’: Californians seek affordable housing alternatives | CNN Business


    Los Angeles
    CNN
     — 

    At 26, Ixchel Hernandez has become the defender and protector of her family’s modest apartment. In the two decades they’ve lived in their Los Angeles home, the family of four has successfully fought against multiple attempts aimed at pricing and, ultimately, forcing them out.

    “We are human beings with the right to live in our home, and that’s just frankly what every person… in every home and [in] every building should know … they have the right to have their own space, to have their home,” Hernandez said.

    But, across the country, affordable housing is becoming increasingly rare to find. The lack of housing inventory coupled with inflation and zoning inequalities have priced out most families, especially those who start with little-to-no capital of their own.

    Ixchel’s parents moved to the United States from Mexico in hopes of giving her and her brother opportunities and a safe environment. Her father, Jose Hernandez, never wanted to give the family’s various landlords a reason to evict them over the years, and he dreamed of owning his own home one day.

    “Thank God we never failed to pay our rent,” he said. But in order to keep up with rising rents, both parents worked and even opened up their home to another family for a brief time. Ixchel remembers six people crammed into their one-bedroom apartment.

    “It shouldn’t have to be that way where you’re kind of fighting for space or you’re going to have to move so far out of LA to be able to have a home,” she said.

    To purchase a house in more than 75% of the nation’s most populous cities, an average family needs to spend at least 30% of their annual income on housing. In cities like Miami, New York and Los Angeles, that number surges to more than 80% of an average family’s annual income.

    Home ownership for the Hernandez family, and so many others, has felt like a fading American dream. That is until they discovered a Civil Rights era approach that helps promote home ownership, particularly among minority groups, who are disproportionately impacted by the affordable housing crisis. It’s called a Community Land Trust, or CLT.

    The Hernandez family at their home.

    “We’re operated by residents who actually live in our building… [as well as] folks from the communities that we’re serving,” said Kasey Ventura of the Beverly-Vermont Community Land Trust. “My interest in this work, outside of just preserving housing and affordable housing, is preserving culture in a community.”

    A CLT is essentially a nonprofit organization that buys the land on which a building sits, thereby allowing a community’s residents to collectively manage it. Some residents eventually choose to form a co-op with their neighbors and take ownership of their buildings, renting the land.

    The Hernandez family and their neighbors embraced the concept. This year they joined the Beverly-Vermont CLT, one of at least five in Los Angeles and more than 200 nationwide. The process requires neighbors to meet regularly over several months before ultimately unanimously agreeing on various terms so as to finalize the trust. Ixchel now sits on the board of her building’s management; it’s in the final stages of ownership transfer to the co-op.

    “What’s important is that we’re now owners!” said Ixchel’s mother, Guadalupe Santiago. “But it’s also important to remember it was not easy,” her father cautioned.

    “It may not seem like a lot to a lot of folks that have money or come from money,” Ixchel said. “[But] we are just as much trying to build that generational wealth.”

    According to 2019 figures, the United States was roughly 3.8 million homes short of what was needed to house families. That is more than double the number from a decade earlier. California has the largest housing deficit of any other state, requiring an estimated million more homes to meet housing demands.

    “We don’t necessarily view housing as a need that everybody should have. And that’s key… in this work,” said Kasey Ventura, who helps run the Beverly-Vermont Community Land Trust in Los Angeles.

    While CLTs are a solution, Ventura admits there are — and should be — other affordable housing options to adequately address the crisis.

    In Southern California, there is growing demand for construction and rental of ADUs, or Accessory Dwelling Units. Also called “carriage homes,” the converted garages or newly built smaller structures sit adjacent to existing homes and are on the same property. The mostly studio or one-bedroom apartments provide a more affordable option to many who prefer to live or work in areas that might otherwise be too expensive.

    Others have advocated for utilizing unoccupied homes. There are dozens of vacant houses, in some cases, sitting just a few blocks from several homeless encampments lining many Los Angeles sidewalks. However, efforts to transform them into affordable housing in some neighborhoods have proven controversial among existing homeowners.

    Another route undertaken by some companies is Employer-Assisted Housing. Although they have only finished a portion of what they initially pledged, in recent years corporations like Google, Meta and Apple have promised to spend billions of dollars on some 40,000 new homes in California. The initiative began in order to combat soaring home prices in the Bay Area, while also recruiting and retaining talent who needed more affordable housing options, along with a shorter commute to the office.

    “Just to be able to be like, ‘Okay, I’m gonna wake up, take a walk down the street and come to work.’ I mean that’s awesome!” said Matthew Johnson, an employee of Factory_OS in Vallejo, California, which already plans to provide workforce housing options to its workers in the coming years. However, unlike other companies, Factory_OS employees will build their own homes.

    In a space once used to build US Navy submarines during World War II, Larry Pace now operates Factory_OS outside San Francisco. He co-founded the company with Rick Holliday to address the worsening housing shortage.

    Matthew Johnson working at Factory_OS.

    “That we’ve repurposed a building that was once for instruments of war, [so as] to [now] create affordable and supportive housing…. I don’t know how much cooler that can be,” said Pace.

    Factory_OS puts homebuilding onto an assembly line and produces fully finished modular units within two weeks. From insulation and drywall to flooring, fixtures and paint, all of it is prefabricated within the confines of the factory before it’s trucked to a site for assembly.

    “We’ve created an IKEA for the manufacturing of homes,” said Pace. “Then we put the pieces together.”

    When hoisted by a crane and stacked like sophisticated Legos, the modular units combine to make entire apartment buildings. Pace maintains there are massive cost-savings and huge efficiencies in moving homebuilding into a factory setting compared with on-site construction.

    “We’re building houses for the people who need them, for the people who have been struggling to be able to support their families or pay rent or pay bills,” said Johnson, as he placed support beams for a roof of one of the units.

    The 38-year-old Factory_OS employee and father of five was once homeless, and he said he often thinks about the families who will one day live under the roof he’s assembling. w

    “Every morning I wake up, I’m grateful… that I come home from work and there are my kids waiting for me,” said Johnson.

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