What must we do to get our affordable housing plan right?

A plan to tally Miami-Dade’s affordable housing needs impresses us, but we question what assumptions will shape the results.

County Commissioner René Garcia’s detailed proposal reported on Miami Today’s front page last week is impressive because it looks holistically at a vital problem that has to date been dealt with piecemeal, almost unit by unit. Sen. Garcia seeks quantified specifics to reach achievable solutions. That’s commendable.

But what assumptions will underlie the study? How will it determine “need” rather than “desire”? Everyone desires better housing at lower cost, but how much of the total desire to get more housing for less money is a need in which government should play a role?
A quick refresher: the measure out of the county Recreation, Culture and Community Development Committee is asking the mayor to develop a five-year, nine-element housing plan within a year and revise it annually.

Elements include how much housing we will have for current and future residents, an inventory of all current workforce and affordable housing that shows a shortfall from needs, how our housing is distributed among income levels, and programs to meet the housing need.
The study is herculean and will consume vast time to do it right. But, exactly what is right?

To quantify the shortfall, the study’s formula will roughly be total housing demand minus current supply equals need, or shortfall.
The survey Sen. Garcia conceives would total current housing and potential new supply, which will reveal availability. But will adding potential population growth to our current population as the measure suggests necessarily total the demand for housing? Myriad other factors come into play. How we account for those factors will alter the equation.

A report by Josh Zumbrun in the Wall Street Journal over the weekend clarifies that point in a similar quest. Mr. Zumbrun looked nationally: how many homes does the nation as a whole need – what is the national housing shortfall? He cited five studies, each with its own assumptions, that produced disparate answers.

The National Low Income Housing Coalition says the US is short 7.3 million housing units. Realtor.com said the shortage is 6.5 million. Mortgage-finance company Fannie May says the gap is 4.4 million. Policy group Up for Growth says the shortage is 3.8 million units. And real estate consultant John Burns Research and Consulting says the gap is just 1.7 million.

That’s a huge range, the last one less than 25% of the first. Mr. Zumbrun attributes the spread to elements that each study considered and then how they were calculated.

Realtor.com said all population growth equates to need for single-family homes, ignoring condos and apartments. Up for Growth says household formation rates are lower than in the past so there must be a housing shortage, yet now people stay longer in school, marry later and have children later, all of which delay family formation. Assumptions determine need levels that vastly differ.

So, what factors will county researchers use to determine need? Will they look at high rental rates and determine how many residents cannot afford those rents – and, if so, will they also note that rents across the nation just fell from a year ago and are the lowest in 13 months? And will they assume a continued fall in rental rates or a future rise due to inflation? If so, what inflation levels will they assume – high like last year or lower like today?

To determine affordability, pivotal is how many residents will be at work and at what wage levels. Unemployment here at 1.7% is lowest in the US. Florida minimum wage levels rise yearly and wages have been rising virtually across the board. What does a study assume when assessing a five-year housing need?

After all, we now have places for everyone to live if they can afford it. So, are more or fewer people going to be able to afford what is available today and will be available in five years? How much income will it take to rise from the ranks of those actually needing housing and not having it to those simply desiring better housing but already adequately housed?

Those assumptions all factor into estimated shortfalls in affordable and workforce housing. No doubt we have a shortfall and will have one in five years. But will need expand or shrink, and by how much? Those figures are crucial in drawing a holistic plan.

Government need not worry about demand – what people desire – but it must tally the need for housing that people cannot find or afford.
Demand is the business of business, which is capable of serving all who can afford to better themselves. Government’s role is to find ways to fill needs of those who cannot help themselves.

Questions this study might target in addition to those Sen. Garcia has admirably outlined are:

■What determines an adequate housing unit?

■How far will housing be from the jobs we expect in five years?

■How do housing and transportation intersect? Housing near jobs is more affordable than the same housing cost plus the cost of transportation to work.

■How will changing incomes affect affordability of housing?

The study Sen. Garcia seeks is vital to set policy and generate concrete county and community actions. But the assumptions are the key. As computer scientists say, “garbage in, garbage out.” The numbers coming out will be only as good as the facts we feed in.