As you well know, the need for affordable housing in the state of California is severe. In fact, according to the National Low Income Housing Coalition’s 2017 study, a California household must earn $30.92 per hour (working 40 hours a week) to afford a 2-bedroom home without paying more than 30% of their income. Just last year California’s 2-bedroom affordability was at $28.59 per hour. While the affordable housing crisis isn’t anything new, two new bills aimed at housing development and affordability has made its way up the ranks.
When it comes to architecture trends, micro-apartments are all the rage. It’s hard not to be impressed when you see a 420-square-foot apartment transform into 6 functional rooms, accommodate 12 person dinner parties, and house 2 overnight guests. The question is, will it affect the multi-family industry? With New York’s city council approving the development of their first micro-apartments (against the 400-square-foot apartment minimum) in an attempt to experiment with affordable housing options, it’s safe to say it soon will be. That being said, no one will start renting out micro-apartments until some necessary changes are made.
A Significant Impact to Affordable Rental Housing
The state of New Jersey has introduced a bill that would significantly impact affordable housing across the state. Senate, No. 1585 is seeking to establish guidelines for creditworthiness determinations concerning government subsidized housing programs. The new restriction is intended to aide applicants who have poor credit history so their chances of receiving government assistance are improved.
Any algorithm that factors FICO and other risk models into the final decision would be prohibited. The language contained in the proposed bill is ambiguous enough that it appears that more than just the standard FICO score would be affected. Companies who rely upon a standardized model to assist their leasing agents in making objective decisions would be required to modify their criteria, or remove it all together.