Understanding the New Landscape of Workforce Housing in 2024

As 2024 unfolds, I find myself grateful to be part of a community actively addressing workforce housing. This year is pivotal for urban and community development, with innovative policies emerging to meet unique challenges. These changes are not just shaping the sector; they're offering a mix of opportunities and challenges for everyone involved. As a resident witnessing these efforts, I feel a sense of optimism and a duty to stay engaged and informed.

Key Developments in Workforce Housing

• Policy Shifts in Financing: The Federal Housing Finance Agency (FHFA) has adjusted the multifamily volume cap for Fannie Mae and Freddie Mac, now exempting loans for workforce housing properties from these caps. This move is expected to encourage investment in affordable housing, helping middle-income workers access suitable living options.
• Infrastructure and Workforce Challenges: Initiatives like the Housing Supply Accelerator, a collaboration between the National League of Cities and the American Planning Association, are emphasizing the link between housing supply, infrastructure, and workforce issues. Repurposing underutilized infrastructure and focusing on transit-oriented development are among the strategies being used to boost housing supply.

NAR's Tax Policy Initiatives for Housing Market Improvement

The National Association of REALTORS® (NAR) has adopted tax policy recommendations to address the housing shortage and ensure fair taxation in real estate transactions:

• Temporary Tax Credit for Home Sales: NAR is advocating for a tax credit for long-tenured single-family homeowners who sell to owner-occupants, potentially adding 640,000 homes to the market.
• Estate and Gift Tax Reform: NAR supports repealing the federal estate and gift tax regime while retaining the step-up in basis for inherited assets. If repeal is not possible, NAR seeks a revised tax regime aligning estate assets tax rates with long-term capital gains rates and opposes taxation on unrealized gains upon death.
• Capital Gains Tax Policy: NAR is pushing for a capital gains tax system that accounts for inflation, aiming to encourage capital formation and turnover without unfair taxation on inflationary gains.
• Property Renewal Incentives: NAR advocates for policies to facilitate property renewal, like allowing demolition costs to be added to the basis of new constructions on the same land.

Durango, Colorado's Workforce Housing Initiatives

Durango is actively pursuing several initiatives to address workforce housing:

• Gauge Apartments Partnership: Collaborating with Gauge Apartments, Durango has introduced the "Leasing for Locals" rental subsidy program, targeting the "missing middle" workforce.
• Housing Innovation Division Initiatives: The division is crucial in developing affordable, attainable/workforce, and market-rate housing units, with an annual goal of around 310 units for permanent residents.
• Specific Housing Projects: Projects like the Residences at Durango, Gauge Apartments, and Animas City Park Overlook Townhomes are part of a broader strategy to provide housing across different income levels.
• Strategic Operating Actions: Durango is focusing on mixed-income demographics, exploring funding opportunities, and supporting housing types through various incentives and partnerships.

Understanding the Implications

• Impact on Affordability: The FHFA's policy changes are expected to increase affordable rental options, particularly in high-cost urban areas.
• Boosting Housing Supply: Aligning infrastructure development with housing needs and incentivizing the sale of single-family homes for owner-occupancy are anticipated to positively impact housing supply.
• Challenges and Opportunities: Despite promising developments, high construction costs, zoning regulations, and community resistance remain significant barriers, presenting opportunities for innovative solutions and public-private partnerships.

The year 2024 is a critical juncture in the workforce housing landscape, with new policies enhancing affordability and addressing infrastructure and workforce challenges. This period is ripe for collaboration among stakeholders to foster a balanced and accessible housing market.

Stay tuned for more updates like this, and feel free to reach out for personalized advice on the housing market!

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