Shelterforce Interview: Raphael Bostic, HUD Assistant Secretary for Policy Development and Research

Bostic, now in his second turn at HUD, is known for his extensive work analyzing the roles that credit markets, financing, and policy play in furthering economic access for all.

Rental and homeownership are always discussed as the two types of housing, but what about a shared-equity model, such as community land trusts and limited equity co-ops?

These models have been around for a while, and the scalability has always been the challenge. How do you get a consistent funding stream to serve this in a way that yields returns and provides some degree of an exit strategy that the private capital markets are comfortable with? We haven’t found that. As we go forward, that that’ll be a real challenge and a question.

We’re willing to work with whoever is out there to really try to make sure that the shared-equity model works and that people who use it get housed well. It’s good that their performance has been stronger than it has been for other segments of the marketplace.

Roughly 65 to 75 percent of low-income rental housing is private and unsubsidized. What kind of policy can HUD develop that helps people living in those private units and what’s the role of PD&R in developing that policy?

The first challenge is really just to understand what’s going on in that segment. A lot of the data on rental markets, particularly at the detailed local and neighborhood levels, is focused on higher end rental. A key role that PD&R plays is just to try to get some intelligence about what’s going on in various segments of the marketplace.

In thinking about helping people deal with challenges in that market, there are two options you have: The first is to deal with it on the supply side, which is to preserve affordable units, to build more affordable units, and to make sure that the production infrastructure, in terms of financing and the like, functions in such a way that we can get to affordability. There’s another piece, which is improving our building technologies. If we can build faster and cheaper, then the rents that are required for a developer to get adequate returns are lower. Investing in how we build and how fast we build is something that my office has some responsibility over.

On the demand side, I think, clearly, the relationship between labor markets, job availability, and community-based amenities are things that are going to really help because on some level you’re going to have to deal with income and try to get people in much more stable life positions if we want them to have that kind of stability on the demand side.

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