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As housing prices soar nationwide, a growing number of Americans are unable to find affordable housing. Experts say that the problem has reached a crisis point, and is harming the welfare not only of individuals and families, but of communities and the economy at-large.
Since 2012, housing prices have increased by 53 percent, according to the Federal Reserve Bank of St. Louis. Unfortunately, salaries have not kept pace. The Joint Center for Housing Studies at Harvard University reports that 18 million Americans commit more than 50 percent of their income toward a safe place to live.
America needs 7 million units of affordable housing, according to a March 2019 National Low Income Housing Coalition report, which also found that no state has enough affordable rental inventory.
“America’s housing affordability crisis isn’t restricted to cities on the East and West coasts. Families in rural, suburban and urban areas in all 50 states are sacrificing necessities like food, healthcare and education in order to make rent or mortgage payments,” said Brandee McHale, president of the Wells Fargo Foundation. “Only when people can afford to live in their neighborhoods can communities thrive.”
Recognizing the extent of the problem, nonprofits, think tanks and corporations are stepping in to find solutions that will unlock housing options for more Americans and reduce the cost burden of housing. One large-scale effort underway is being spearheaded by Wells Fargo and the Wells Fargo Foundation. Drawing on its resources and expertise, the company is working in collaboration with public- and private-sector organizations to develop and implement new solutions in communities of need, and is committing a $1 billion philanthropic investment through 2025.
The $1 billion will be used to address multiple facets of the U.S. housing affordability crisis, including homelessness, available and affordable rentals, transitional housing and homeownership. Beyond this commitment, programs that increase financial literacy among individuals and create small business growth for local entrepreneurs round out an overall strategy to help people and communities find more financial stability.
This new philanthropic strategy comes on the heels of previous efforts designed to secure affordable housing for more Americans. Since 2012, Wells Fargo has provided charitable grants for homebuyers and homebuyer education through its philanthropic NeighborhoodLIFT, and other LIFT programs in collaboration with NeighborWorks America, creating more than 22,000 homeowners — the majority from low- and moderate-income households — through over $475 million in down-payment assistance grants. In addition, 10-year lending commitments are in place to help more than 170,000 African American and Hispanic individuals purchase homes.
“Financial stability starts with a place you can afford to call home, but to help more people find that, it’s going take all of us looking more holistically at the spectrum of housing needs,” McHale said.
As markets all over the country struggle with high housing prices, policymakers, advocates, philanthropists and nonprofits will need to work together to find long-term solutions that will help millions of Americans meet their most basic needs.
