As affordable housing vanishes for low- and middle-income Americans, lawmakers in many states are looking for ways to encourage new construction. The country’s lowest earners are increasingly at risk because the private sector cannot meet their need for housing without government aid. But federal funding has been stagnant, the effects of the Great Recession linger; and growing income disparity has left many states and cities with an influx of people in search of affordable homes. Housing advocates say states and cities need to do more to ease the housing crunch, such as finding new ways to finance construction or demanding that developers price some of their new apartment units below market value. Some have responded in novel ways. Portland, Oregon, established a transient lodging tax that charges 11.5% per AirBnB reservation and funnels that money into a housing trust fund that can be used for land acquisition and other capital costs. The tax has raised $1.2 million for housing projects since 2014. New Jersey and Massachusetts require developers to price some new units below market rates through inclusionary zoning policies.
Source: Stateline, 1/29/16, Low-Income Housing