As the Head of Community Development Banking at JP Morgan Chase, Vince Toye recognizes the increasing need for affordable housing in the United States, with a shortage of 3.8 million housing units. Finding ways to expand inventory presents a major challenge for developers, public agencies, and nonprofit organizations. However, alternative financing solutions and creative building opportunities are emerging, calling for attention from stakeholders.
Collaboration between 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) help incentivize the private sector to develop and preserve affordable housing developments. The involvement of the public sector in providing capital, project tax exemptions, or rezoning is essential in facilitating the construction of affordable units.
The demand for affordable housing extends across economic status, including middle-income households known as the “missing middle.” These households earn 80% to 100% of the area median income and face challenges in affording market-rate rental housing without qualifying for government subsidies. Programs focusing on developing and preserving housing with rents between traditional affordable and market-rate housing, without the use of subsidies, are needed to bridge this gap.
Community Development Financial Institutions (CDFIs) play a crucial role in providing financing to underserved communities. JPMorgan Chase supports CDFIs with philanthropic capital, traditional financing, resources, and expertise to help them lend to small businesses and fund local community projects. CDFIs use their local connections and expertise to financially support affordable housing projects and small businesses in under-resourced areas, contributing to neighborhood development and addressing economic and social inequities.
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 ways in which stakeholders can contribute to addressing the affordable housing shortage. Alternative financing solutions and tools will be crucial in ensuring everyone has access to affordable housing. Every unit of affordable housing built has a positive impact on creating thriving neighborhoods and addressing the housing affordability crisis.
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