Groundwork Housing Summit: New Directions in Housing

On May 8, Groundwork hosted "Creating Home: A Summit Exploring Policies, Practices, and Promising Solutions" where author and Founding Director of the Nowak Metro Finance Lab at Drexel University, Bruce Katz presented challenges and innovative solutions to the U.S. housing crisis.

Can Northwest Arkansas rise and grapple with the housing challenges facing our region?

That is the question that Bruce Katz, founding Director of the Nowak Metro Finance Lab at Drexel University posed at Groundwork’s first-ever housing summit this past May 8.

Serving as the keynote breakfast speaker for the half-day summit, Katz shared key insights from a national effort to address the housing issues facing municipalities across the United States.

Understanding the Housing Crisis

Housing issues are not unique to our region.

The U.S. is experiencing a housing crisis, characterized by a substantial disparity between incomes and housing affordability. This crisis has led to a nationwide increase in homelessness, with a shortfall of four million housing units exacerbating the situation. Additionally, 45% of renters are spending more than 30% of their income on housing. The urgency of this crisis has prompted experts like Katz to advocate for immediate and multifaceted solutions, including significant zoning reform.

Key Issues and Challenges

Katz emphasized that zoning reform is a precondition, and zoning regulations must change to deliver the housing options needed to serve Northwest Arkansas’ current and projected populations. At the same time, Katz explained, zoning is not the sole problem to address the housing crisis.

First, on a federal level, there is a division of responsibilities where policies, practices and products sit with federal, state and local municipalities. This means that “everyone’s in charge so no one is in charge.” This fragmented approach often leads to inefficiencies and delays in addressing housing needs, exacerbating the existing housing crisis.

The second issue Katz addresses is that there are financial misalignments between public and private sectors. Furthering financial complications, Katz explains that various, "systems have created a maze of intermediaries bloating costs.” This misalignment and the resulting complexity significantly increase the cost of housing development, making it more difficult to create affordable housing options.

He also mentioned that since purchasing existing properties is more profitable than constructing new ones, large-scale investors are acquiring vast amounts of residential properties – a trend occurring nationwide, including in Northwest Arkansas.

Finally, in what Katz deemed as fossilization, programs built for a different time and different problems have not been updated and have little ability to adapt to today’s problems and the current population. This lack of modernization in housing programs hampers their effectiveness, leaving them ill-equipped to address contemporary housing challenges and meet the needs of today’s population.

Solutions and Innovations

Katz introduced a new housing framework, and strategies that are coming up across the U.S. to include goals and actions that focus on land, construction, capital, regulation and delivery.

Northwest Arkansas is not alone in trying to solve the housing crisis. “Somewhere, someone is innovating.” To address this issue effectively, it is essential to identify successful strategies from other regions and tailor these solutions to fit the specific needs of Northwest Arkansas.

As a polycentric region, Northwest Arkansas needs coordination and a regional approach to maintain quality of life. Without unified efforts, the disparate development patterns could lead to inefficiencies and exacerbate housing and infrastructure issues.

The housing crisis must be addressed at all levels of government. To tackle this issue on a national scale, Katz is launching a National Housing Task Force, which includes several elected officials and bank leaders. This task force will serve as a bipartisan resource, focusing on identifying and scaling local innovations. By sharing their findings on a federal level, they aim to facilitate nationwide changes. This approach will enable state and local municipalities to adopt and scale successful efforts, tailoring solutions to the specific needs and conditions of their community, and ultimately leading to more effective and sustainable housing policies across the country.

Preparing for Future Growth

Addressing the housing crisis requires a multifaceted and coordinated approach, particularly in Northwest Arkansas where the urgency is pressing. As growth continues, it is imperative to proactively address housing challenges. As Katz stated, “The growth is coming. So, you’re either going to deal with this or ignore it...Get ready. Get prepared. And then respond.” Embracing this proactive stance will ensure that the region is well-equipped to handle its evolving housing needs and enhance the quality of life for all who call NWA home.