The Contributor: A Few Questions with Marshall Crawford

A Few Questions with Marshall Crawford

By Judith Tackett, originally published in The Contributor  – January 3, 2024.

The Contributor spoke with Marshall Crawford, an affordable housing expert who has served as President and CEO of The Housing Fund, a Community Development Financial Institution private nonprofit revolving loan fund, since 2017.

The Housing Fund is dedicated to providing affordable housing options, financial education, and resources to support homeownership and community development activities throughout Tennessee. Specifically, The Housing Fund provides access to capital to for-profit and nonprofit developers who want to build affordable housing and offers programs to help individuals and families access affordable housing opportunities.

How do you define housing affordability in the context of your work?

Housing affordability refers to the ability of individuals or households to comfortably cover housing expenses such as rent or mortgage payments without compromising other basic needs like food, healthcare and education. HUD’s cost-burden ratio, which was established in 1981, refers to the guideline that suggests that households should spend no more than 30 percent of their income on housing costs. I believe a policy change altering the cost-burden ratio to 20 percent could potentially increase the number of affordable housing opportunities available to low-income households. By reducing the portion of income allocated to housing, more people might qualify for affordable housing programs alleviating financial strain for many families. I believe this change could also impact landlords and the housing market, potentially affecting rental prices and housing affordability in some areas.

Today the economic environment is significantly different than in 1981 or even in the early 1960s. Most mortgage ratios allow for a higher debt-to-income ratio in the context of providing affordable housing. It means offering homes that are reasonably priced and within financial reach for low-to-moderate-income individuals and families. So, the real essence is, we need to change that ratio. That ratio was established in a different economic environment and today we need to make policies that adhere to the environment that we’re dealing with, especially from an economic standpoint.

What can be done at the local level to address this issue?

Everything starts locally. The people who are in Congress represent local constituents. The local advocacy has to be strong, showing that federal policy changes need to be made.

Are there already local advocacy efforts underway?

Not dealing with the issue around the cost-burden ratio. There are several local efforts around the country trying to address things such as the Low-Income Housing Tax Credit (LIHTC) policy [and] the New Markets Tax Credit policies. But there isn’t any form at a local level that is really trying to address this situation around the cost-burden ratio that prevents a lot of people from being able to qualify.

What are three successes in Nashville’s affordable housing efforts you would like to highlight?

Number one is the Affordable Housing Task Force. Some of the recommendations that have come out of this are very strong. Having community leaders come together to really think about this particular issue is good. So, I think establishing task forces by utilizing local practitioners to really provide a perspective around this is a good thing. That’s one success.

Another success is the establishment of the Barnes Housing Trust Fund. The Barnes Housing Trust Fund is a dedicated resource for affordable housing and supports the nonprofit developers and the nonprofit housing practitioners to be able to get resources to continue to provide affordable housing and sustain affordable housing. So, the creation of new affordable housing is very important, but the preservation and the sustainability of existing affordable housing units is as equally if not more important.

And then I would say, a third success is the utilization of the community investment tax credits. The local financial institutions have stepped up to the plate and been able to provide capital to the nonprofit developers and the nonprofit housing agencies in utilizing the community investment tax credits where they gained access to capital. I think the utilization of that and the partnership between financial institutions and nonprofit entities has been a great success in being able to have additional resources for the creation and sustainability of affordable housing units.

What are some of the things you think the city and community can do right now to speed up the process of addressing affordability issues?

First let me say that the housing development system does not work [for] the people that need it the most. There is an equity problem in our city, and everybody knows it. The growth of the city benefits a certain population, and we need to do something about that. The decision makers responsible can do something about it. But they must convince the community that it is a sound economic opportunity.

NIMBYism can’t continue to win out when so many people are unhoused and homeless. There are many people who do not have the income to afford an increase in rent payments and still cover their basic needs. When people oppose a housing development, they show up to voice their opinion while those who are fine with it stay home. We need the supporters of affordable housing development to show up to public meetings and communicate their support.

I’m encouraged by the current direction of the city as outlined by the report provided by the Affordable Housing Task Force. However, there are several approaches cities and communities can take to address the affordability:

One, review and address the zoning laws to allow for diverse housing options and increase density in certain areas.

Two, invest in programs that support affordable housing developments such as subsidies or tax incentives or the Community Land Trust.

Three, encourage public-private collaboration with private developers to create mixed income housing projects.

Four, I would say being intentional. We have to essentially be intentional about preserving existing affordable housing units through renovations and rehab or legal protections against conversions to market-rate housing, provide incentives for developers to build affordable housing such as reduced fees or streamline approval processes.

Finally, we need to be focused on creating housing near public transportation to reduce the [commuting] cost and increase accessibility.

In the homelessness sector, we have observed that increasingly nonprofit providers get into the housing sector becoming developers, landlords, and/or master leasers. What are some key partnerships you recommend they establish before getting too far into housing development?

Let me first and foremost say that the housing development process is not easy to navigate. Having experienced professionals on their team will make it easier. Housing providers can collaborate with various entities to address homelessness. They can partner with government agencies, nonprofits, and community organizations to offer housing solutions, support services, and funding. Such partnerships foster a holistic approach to tackling homelessness by combining housing with the essential support services that currently exist.

Collaborating with experienced individuals is the key to all of this. A lot of people say, ‘Hey, I want to get into development.’ But they don’t have the experience of the professionals on their teams that will allow them to be able to do it in a way that is cost effective, that is safe and that is effective.

In your estimation, has the housing affordability situation changed a lot since the Affordable Housing Task Force released its report in 2021?

The current economic environment has altered housing affordability and housing availability not only in Nashville but across the entire country. Here in Nashville, the growth has really caused a challenge. The cost to obtain housing is a whole lot more. Interest rates have definitely had a significant impact on the opportunity to borrow capital and then the willingness of financial institutions to provide that capital. So, it has caused some major challenges in being able to effectively provide housing affordability and to [meet the] rates that the Task Force has indicated [are needed]. We need about 53,000 units by 2030. Well, we’re only seven years away from 2030. And with the current economic environment the way that it is, it’s going to be even more challenging to meet those numbers.

Anything else you would like to highlight?

Nashville has a very strong nonprofit housing provider industry. With the development of the Alliance [for an Affordable Nashville], which is comprised of 10 nonprofit organizations working on housing, this city could definitely move the needle on affordable housing. More advocacy and more support for nonprofit organizations will be critical to be able to meet and address the housing affordability issues whether that’s on the rental side or the homeownership side. But we need to have the resources, the buy-in and the commitment from those who support the nonprofit sector.