Findings from the 2025 J-Term Harvard Federal Housing Policies DC Trek
A Joint Student-Led Initiative by the Harvard Kennedy School (HKS) and the Graduate School of Design (GSD)
Date: January 6-7, 2025
Application Deadline: January 1, 2025 11:59PM
Policy Trek & Findings
Over the course of two days, 30 participants navigated the largest snowstorm Washington, D.C., has experienced in five years, seamlessly adapting to a mix of virtual and in-person meeting formats. Across 12 meetings, they engaged with stakeholders from diverse agencies and organizations, including the White House, Congress, the U.S. Department of Housing and Urban Development, the U.S. Department of the Treasury, the Rural Housing Service at the U.S. Department of Agriculture, the Federal Reserve Board, the U.S. Interagency Council on Homelessness, the National Low Income Housing Coalition, and the National League of Cities.
We have aggregated the insights and notes from these meetings into three comprehensive sections: the origin of the housing crisis, current challenges, and proposed solutions. Please scroll down the webpage for detailed information on each section.
This trek served as a critical foundation for the upcoming symposium, where we will synthesize our findings and invite trek speakers to share their perspectives with a broader audience.
Trek Findings: Origin of the Housing Crisis
A. Housing Deficit and Its Role
The U.S. faces a shortage of 4.5 million homes, with housing demand consistently outpacing supply.
Housing is both a fundamental human right and a driver of economic productivity, enabling proximity to workplaces and stability for the financial system.
B. Historical Shifts in Housing Dynamics
1. Financialization and Commodification
Early Foundations: Housing has long been the most valuable asset for American families, serving as a cornerstone of wealth-building. The financialization of housing gained momentum in the mid-20th century with the creation of Fannie Mae (1938) and Freddie Mac (1970). These institutions facilitated mortgage securitization, which provided liquidity to lenders and expanded access to homeownership.
Acceleration Post-1970s: Over time, housing transitioned further into a financial asset rather than a basic necessity. This shift was marked by the widespread securitization of mortgages into mortgage-backed securities (MBS). Initially designed to stabilize the housing market, this mechanism prioritized speculative investment, encouraging the construction of housing for profit rather than need.
Consequences: While MBS lowered borrowing costs and spurred construction, they also fueled speculative investment. Substandard housing and risky lending practices proliferated, laying the groundwork for systemic vulnerabilities that would later culminate in the 2008 financial crisis.
2. Shift in Perception of Housing
From Necessity to Investment: By the late 20th century, housing was increasingly viewed as an investment vehicle. Buyers were motivated not just by shelter needs but by the prospect of wealth accumulation through home appreciation.
Artificial Demand: This speculative mindset created artificial demand, driving housing prices to levels detached from local economic realities. The speculative bubble was sustained by easy access to credit and risky lending practices, particularly subprime mortgages.
3. The 2008 Financial Crisis
Bubble Burst: The speculative bubble ultimately collapsed, triggering widespread foreclosures and a sharp decline in home values. Homeowners and financial institutions alike faced massive losses, and the housing market entered a prolonged downturn.
4. Post-Crisis Protectionism:
Protective Reactions: In the aftermath, many homeowners became highly protective of their properties as their primary or sole financial asset. Local zoning boards, dominated by homeowners, resisted policies that might reduce property values, such as higher-density housing or affordable housing developments.
Long-Term Effects: The crisis exacerbated an already growing supply-demand mismatch. Construction slowed significantly, while the financialization of housing entrenched wealth concentration among large property owners, contributing to the affordability crisis seen today.
Local governments and zoning boards tightened supply to preserve property values, favoring single-family zoning and restricting higher-density housing.
This exacerbated the housing shortage, particularly in high-demand areas.
C. Current Housing Market Dynamics
Supply Constraints: Developers focus on luxury housing due to regulatory burdens and higher returns, leaving affordable housing underbuilt.
Systemic Wage-Housing Mismatch: Median wages fail to meet housing costs.
Demographic Shifts: An aging population and smaller household sizes drive demand for diverse housing types, intensifying the deficit.
Lingering Effects of 2008:
Local housing departments remain under-resourced.
Construction labor shortages and regulatory inefficiencies persist.
D. Federal and Local Role
Federal programs like LIHTC and Section 8 are underfunded and insufficiently integrated with local policies, failing to address affordability at scale.
While housing is a deeply local issue, federal financing and policy frameworks are critical for scalable solutions.
E. Broader Implications
More than 90 percent of Americans live in counties where median rents and house prices grew faster than median incomes from 2000 to 2020.
Effective housing policy requires integrating financing, construction, tenant protections, and climate resilience while fostering collaboration across federal, state, and local levels.
Note: These notes are an aggregation of observations and insights shared by trek participants, organized and summarized using AI tools. While every effort has been made to ensure accuracy and coherence, there may be unintended errors or omissions. For any corrections or clarifications, please feel free to contact us at hksxgsdhousingpolicytrek@gmail.com.
Trek Findings:
Current Challenges
A. Overarching Issue: Supply Shortages
The predominant issue driving the U.S. housing crisis is a lack of supply, compounded by systemic inefficiencies and financialization trends.
B. Specific Challenges
1. Rural Areas
Rapid Growth and Gentrification: Telework and tourism drive demand, straining limited housing stock.
Changing Demographics:
Growing Latino populations and multigenerational households require diverse housing options.
Aging populations need accessible and specialized housing.
Affordability and Outdated Stock: Rising prices and inadequate housing exacerbate affordability issues, particularly in tribal areas.
Capacity Gaps: Local nonprofits and governments often lack resources and expertise to address housing challenges effectively.
Rural Homelessness: Distinct from urban homelessness but shares similar challenges, requiring tailored solutions.
2. Urban Areas
Aging Infrastructure: Multifamily housing requires remediation and modernization.
Labor Shortages: A lack of skilled construction workers hinders housing production, even with rezoning.
Regulatory Misalignment: Conflicting state, federal, and local policies create barriers.
Infrastructure Deficiencies: Delays in essential infrastructure investments (e.g., roads, wastewater systems) stall development.
Financial Constraints: Many cities lack funding and expertise to manage housing projects effectively.
3. Zoning Reform and Local Resistance
Restrictive Policies: State and local zoning laws restrict density and supply, creating a “land-use oligopoly.”
Community Opposition: NIMBYism is observed among people across the political spectrum, with concerns ranging from preserving community character to skepticism about urban planning initiatives and their broader impacts.
Misconceptions:
Concerns about school overcrowding and traffic dominate public resistance.
Modest increases in density could stabilize school enrollments and improve fiscal health.
Parking Minimums: Outdated parking requirements increase costs and hinder walkability.
4. Federal Housing Policy Challenges
Program Limitations:
LIHTC, Section 8, and Opportunity Zones foster affordable housing but lack the scale to address shortages.
LIHTC often favors large developers and struggles with affordability compliance.
Federal Limitations:
Minimal involvement in zoning and density reforms.
Rising rental costs strain the Section 8 program, making it harder to renew vouchers.
Policy Disincentives:
Concerns about section 8 reducing benefits as household income increases, discouraging upward mobility.
5. Climate Change Impacts
Insurance Costs: Rising premiums due to natural disasters make homeownership less affordable.
Uninsurability: Properties in high-risk areas face canceled policies and declining values.
Displacement: Natural disasters destroy housing stock and force relocation, exacerbating shortages.
Economic Burden: Climate-related costs disproportionately affect low-income families, further straining affordability.
6. Homelessness
Rising Rates: Despite $4.1 billion in federal spending, homelessness increased by 18% due to rental market pressures, natural disasters, and insufficient resources.
Misunderstandings of “Housing First”: Public misconceptions about providing housing without preconditions undermine this proven stabilizing strategy.
Key Themes
The housing crisis is deeply rooted in systemic supply shortages, exacerbated by financialization and resistance to reform.
Federal programs lack the scale and cohesion needed to address local challenges effectively.
Climate change and homelessness are critical cross-sectoral issues, demanding integrated solutions.
Political and public opposition across ideological divides continues to impede progress.
Note: These notes are an aggregation of observations and insights shared by trek participants, organized and summarized using AI tools. While every effort has been made to ensure accuracy and coherence, there may be unintended errors or omissions. For any corrections or clarifications, please feel free to contact us at hksxgsdhousingpolicytrek@gmail.com.
Trek Findings:
Crisis Solutions
A. Overview
Housing solutions generally fall into two categories (some can address both):
Supply-Side: Increasing housing availability through streamlined zoning, modular housing, and funding new developments.
Demand-Side: Programs such as down payment assistance for first-generation homeowners and renter tax credits to improve affordability.
B. Policy Solutions
Federal Housing Programs:
Low-Income Housing Tax Credit (LIHTC): The largest federal affordable housing tool, though complex and favoring larger developers.
Challenges: Affordability compliance periods ending, fluctuating tax credit values, and insufficient federal support for land acquisition.
Proposals: Simplify processes, increase funding, extend affordability periods, and pilot demonstration projects.
Other Federal Programs: Section 8, Opportunity Zones, National Housing Trust Fund, and HUD-VASH.
Zoning Reform:
Federal infrastructure funding should require state-level zoning reforms to unlock housing supply.
The "Pro-Housing" initiative aims to tackle local barriers to housing development.
Balancing Renter and Homeowner Support:
Current policies disproportionately subsidize homeownership.
Future strategies may introduce renter tax credits and utilize public land for housing.
C. Additional Solutions
Public-Private Partnerships:
Collaboration with entities like Kaiser Permanente and the Urban Land Institute (ULI).
Cities leverage federal funds (e.g., ARPA) to support modular housing and provide gap financing.
Homelessness Solutions:
Housing First: Stable housing paired with voluntary services, proven effective for veterans.
Scaling Challenges: Resource limitations and workforce shortages.
Innovations: Trauma-informed design, low-barrier housing models, and enhanced crisis response systems (e.g., diversion programs and emergency shelters).
Gentle Density and Missing Middle Housing:
Development of two-to-twenty-unit buildings to create community-focused, affordable housing.
Simplifying approval processes to reduce delays and support smaller developers.
Education to Combat NIMBYism:
Address public misconceptions about affordable housing’s impact on property values and infrastructure.
Federal advocacy can support zoning reform and empower local leaders with data-driven solutions.
Innovation in Housing:
Modular Housing: Lower costs, climate resilience, and efficiency, but facing regulatory and perception barriers.
AI Applications: Streamline zoning, demographic mapping, and mortgage underwriting while ensuring equitable outcomes.
Adaptive Use of Underutilized Properties:
Converting empty office spaces and hotels into housing, as seen during the pandemic.
Housing Finance Innovations:
Policies to curb speculative investments and promote first-time homeownership.
Interest rate collars and financial tools to expand supply and reduce costs.
Rural Housing:
Focus on workforce housing for middle-income earners (e.g., teachers, first responders).
Build local capacity and implement innovative financing strategies.
D. Broader Considerations
Collaboration: Effective solutions require coordination across federal, state, and local agencies, with active engagement from public, private, and nonprofit sectors.
Legislation and Advocacy: Bipartisan recognition of the housing crisis highlights opportunities for systemic change through strategic advocacy and innovative policies.
Note: These notes are an aggregation of observations and insights shared by trek participants, organized and summarized using AI tools. While every effort has been made to ensure accuracy and coherence, there may be unintended errors or omissions. For any corrections or clarifications, please feel free to contact us at hksxgsdhousingpolicytrek@gmail.com.
2025 Federal Housing Policies DC Trek
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Learn & Discuss
Explore the successes and challenges of policy implementation, gain insights into the current administration’s housing policy e orts, and discuss what the future may hold under the next administration.
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Understand Federal Collaboration
Explore how the legislative and executive branches of government work together to shape housing policies like Section 8, LIHTC, and Opportunity Zones and coordinate with state and local governments for e ective implementation.
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Address Housing Challenges & Opportunities
Delve into pressing issues such as a ordability, rural and urban housing, health and environment, climate resilience, social housing, and technological integration.