Introduction to Social Housing in the United States
In the last few years, a new term has emerged in housing circles in the United States – “social housing.” As a new political administration enters the White House and traditional funding streams for affordable housing – such as the Low Income Housing Tax Credit and Community Revitalization Act spending – are potentially re-thought, it is important to examine other housing models that might provide new ways of financing affordable or attainable housing.
What is Social Housing? A Definition
So what is social housing? As described by a report from the Terner Center at UC Berkeley: “Social housing is typically understood as housing that serves lower or moderate income households and is financially assisted in some way by the government. Social housing frequently sits on land contributed by the public sector, with rents affordable to low- and/or moderate-income households and built-in tenant protections. Social housing typically serves a mix of incomes, which helps to cross-subsidize the development. While it has historically been used as a synonym to the American term “affordable housing,” its contemporary usage typically implies something distinct from the more deeply subsidized affordable or public housing model in the US.”
Social Housing vs. Public and Affordable Housing Models
As described, social housing is explicitly not the same as “public housing” or “affordable housing” as we know it traditionally in the United States. While most developments financed with Low Income Housing Tax Credit dollars have a requirement for 75-80% of the finished units to be “affordable” and provided only to those making a certain income, social housing models often have a mix of tenants at very different income levels. This mix of incomes means that social housing developments may more closely resemble developments built with inclusionary zoning requirements (e.g., where a developer is required to set aside 10-30% of a building’s total units for low-income residents).
Why is Social Housing Gaining Attention?
The Benefits of Social Housing: Key Hypotheses
So why is social housing so exciting? And why is it exciting right now? Here are a few hypotheses:
1. Funded at the State or Local Level
Because social housing is cross-subsidized by rents at all levels, including a portion at market rate levels, fewer government financial subsidies may be required and allow local or state governments to fund housing developments which would not otherwise be built.
2. Mixed-Income Residents and Community Impact
Perhaps housing advocates are focused on social housing as a way to not only build more units, but also help those buildings better reflect residents from all parts of a community. Raj Chetty’s research has demonstrated how children benefit from moving to high-opportunity neighborhoods; however, an Urban Institute study examined the benefits of mixed-income developments for low-income families and concluded further research was needed.
3. Perpetually Affordable Housing
Social housing, unlike developments funded by the Low Income Housing Tax Credit program, are generally funded to provide perpetually affordable housing – whereas LIHTC units often lose their affordable protections after a 15-30 year period. This perpetual affordability could make social housing more attractive to housing advocates.
Real-World Examples: Social Housing in Action
We have been lucky at Ivory Innovations to support several innovators with solutions close to the social housing movement. The Housing Opportunities Commission of Montgomery County’s Housing Production Fund (IP ‘24) has been lauded as one of the first examples of social housing at scale in the United States. And Trust Neighborhoods’ Mixed Income Neighborhood Trust model (IP’22) helps community organizations proactively preserve affordable housing units in neighborhoods facing rapid price / rent growth.
Conclusion: The Future of Social Housing
We look forward to more housing advocates, public officials, developers, and others exploring this model and enabling the creation of more housing for more people from all walks of life.
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