Vince Toye, the Head of Community Development Banking at JP Morgan Chase, is on the front lines of the housing affordability crisis in the United States. With 3.8 million housing units needed, the shortage of affordable housing continues to grow. This presents a significant challenge for developers, public agencies, and nonprofit organizations. However, alternative financing solutions and creative building opportunities are emerging, calling for attention from all stakeholders.
Collaboration between the public and private sectors is crucial in preserving and creating affordable housing. Federal tax credit programs such as low-income housing tax credits (LIHTCs) and historic tax credits (HTCs) incentivize the private sector to develop and preserve affordable housing developments. LIHTCs provide a tax incentive to construct or rehabilitate affordable housing for low-income households, while HTC funding restores historically significant buildings and creates construction jobs. Involvement from the public sector is critical to facilitate the construction of affordable units.
The demand for affordable housing extends beyond low-income households to middle-income renters, often referred to as the “missing middle”. These households earn 80% to 100% of the area median income (AMI) and face challenges affording market-rate rental housing without government subsidies. Programs focused on developing and preserving housing with rents between traditional affordable and market-rate housing are needed to bridge this gap.
Community Development Financial Institutions (CDFIs) play a vital role in extending financial support to underserved communities. JPMorgan Chase provides philanthropic capital, financing, resources, and expertise to CDFIs to help them lend to small businesses and fund local community projects. CDFIs use their local connections and expertise to support affordable housing, community facilities, and small businesses that contribute to thriving neighborhoods, creating jobs and addressing economic and social inequalities in under-resourced areas.
Collaboration across private and public sectors is essential in tackling the housing crisis. Building workforce housing, developing supportive housing, and working with CDFIs are all important steps in addressing the affordable housing shortage. Every unit of affordable housing built is a positive contribution to creating thriving neighborhoods. New alternative financing solutions and tools will be crucial in ensuring that everyone has access to a reasonably priced place to call home.
In conclusion, the housing affordability crisis in the United States requires a unified effort from all stakeholders. Vince Toye and JP Morgan Chase are working to drive transformation in communities, one affordable unit at a time. Through collaboration, innovative financing solutions, and a focus on supporting underserved communities, progress can be made in addressing the growing shortage of affordable housing units in the country.
