How the pandemic fueled the current housing crisis in US cities

BURLINGTON, Vt. – Nearly all of the nation’s housing challenges are on display in the unlikely pandemic boom town of Burlington, Vermont: Skyrocketing housing costs. Chronic homelessness. Too few homes to rent or buy.

And an influx of new residents that arrived during the pandemic – a mix of remote workers, wealthy second-home owners and retirees. The population spike local leaders long yearned for is colliding with decades of failed housing policies.

Mayor Miro Weinberger says that if his city isn’t smart, this is just the beginning. He’s been waging a sometimes lonely campaign to raise the profile of housing issues during his decade-plus in office. But he’s been hamstrung by red tape and sticky housing politics – most prominently with a giant piece of dirt nicknamed “the Pit” that sat empty for years as the city got wrapped up in a messy development project that finally got off the ground last year.

“We’re going to have a lot more people here, and if we don’t embrace housing abundance these issues are going to get more and more acute and we’re going to increasingly become a place where only people with very high financial means or huge government supports can afford to live,” says Weinberger, a Democrat who worked on affordable housing for a decade before being elected mayor.

“That’s not a good future.”

Weinberger is one of 50 mayors POLITICO has assembled in 2023 to shine a light on the challenges their communities face and offer lessons they’ve learned on the job. Throughout the year, members of the inaugural Mayors Club — one from every state — will share their perspective on key issues that weigh on them and their peers, in both surveys and interviews. We’ll hear directly from leaders who are far from Washington’s corridors of power, representing cities and towns big and small, urban and suburban.

The latest topic we asked the Mayors Club about: Housing and homelessness.
Their responses underscored that many Americans continue to struggle to rent or purchase homes – a long term problem worsened by a pandemic that turned the U.S. real estate market upside down. Housing costs continue to be the main driver of inflation, rising twice as fast as everything else, and putting home ownership out of reach for many. A lack of affordable homes throughout the U.S. poses a profound crisis for local elected officials – and threatens the viability of the communities they lead.

Here’s what our mayors told us:

• More than 70 percent said their cities need “significantly more” housing.
• There is a huge lack of affordable midmarket and workforce housing in the U.S. In some places the need for middle class housing is even greater than the demand for low-income, affordable housing.
• A lack of funding and the limited availability of land are the biggest barriers to building more housing.
• The solutions proposed by most mayors: encourage construction of more affordable housing units, offer tax incentives to private developers and convert existing buildings into low-cost housing.

“It’s just the new reality,” said Mayor Hailey Morton Levinson of Jackson, Wyoming, another small city that experienced a huge uptick in people purchasing luxury homes during the pandemic.

Jackson is now home to the most expensive zip code in the nation.Teton County, which includes the city, has the highest income disparity in the U.S. In 2022, the average price for a single-family home in the county was $5 million. Two years prior, it was about half that amount.

The high cost of housing compromises residents’ ability to live and work in their communities in Jackson and throughout the country, said Levinson, a Democrat. Leaders are particularly concerned about how the influx of wealthy residents is making it more difficult for service sector employees to live within Jackson. That’s why the city is relying more on workforce deed restrictions in new construction to set aside a percentage of units for renters who work locally.

“If you don’t have those that can invest in the community and stay for the long term, what does that mean for our kids or the next generation?’” she said.

Lured by a quiet pace of life, as well as a thriving arts and recreation community, out-of-staters – nicknamed “flatlanders” by locals – have flocked to Vermont over the past few years, some escaping overcrowded Covid-19 hot spots in cities up and down the East Coast. More than 7,300 people came to Vermont from April 2020 to July 2022 – a population spike of 12 percent, according to the U.S. Census Bureau.

It’s a sharp change for a state that has long struggled to retain residents to balance an aging, shrinking workforce.

Now, the people have arrived. There’s just not enough attainable homes to rent or buy.

The rental vacancy rate in Chittenden County, home to Burlington, hovers at less than 1 percent. Meanwhile, the median home sale price has more than doubled in the last five years, hitting $615,000 in May.

“This has become a popular place to live,” said Michael Monte, CEO of the Champlain Housing Trust, an organization that develops affordable homes. “It has exacerbated the pricing. It has no value to anybody to have housing be so expensive. It just doesn’t make sense.”

That’s why Weinberger, Burlington’s mayor for more than a decade, knows the city must dramatically increase its housing stock. He’s been pushing for the city and state to ease permitting regulations to speed development and encourage multi-use properties with a mix of affordable and mid-market housing.

“We have a serious, acute housing problem,” said Weinberger. “It’s been building for decades. The problem is fundamentally a housing supply problem that is not entirely but in large part a function of Burlington and Vermont being way too hard to build homes in.”

Complex and restrictive land use laws are to blame, according to Weinberger. He has worked to streamline the city’s permitting process to make it easier on developers and is currently exploring how to change zoning regulations to allow for more “missing middle housing” within existing neighborhoods, such as duplexes and cottage courts.

Before he entered politics, Weinberger’s career was spent in housing, starting with his first job out of college working for Habitat for Humanity. That experience is what began to show him how a lack of housing is often the root of all other problems for a city.

“I was a little bit of a lonely voice pushing for more housing when I first got elected,” he said. “There’s been an enormous sea change over the last eleven years in terms of people’s understanding of how fundamental this issue is to so much.”

Vermont Gov. Phil Scott, a Republican, signed legislation this year that aims to hasten the pace of housing development by removing some permitting requirements developers have complained impede projects and allowing higher density development. But some critics like affordable housing advocates say the law doesn’t go far enough to wipe out unnecessary mandates, like entirely eliminating parking minimums instead of simply easing them, and represents modest progress.

Local housing organizations and leaders have pursued multiple campaigns to build more houses in Chittenden County. The latest goal set in 2021 is to construct 5,000 new homes over the next five years, with 1,250 of those homes being permanently affordable.

A fitting metaphor for Burlington’s development headaches can be found in its central downtown, the location of a stalled major project that’s become a visual and political albatross.

In 2014, a deal was struck between a private developer and local leaders to build Burlington’s CityPlace, a development intended to revamp its shopping and residential core. It was the kind of dense, mixed-use project that housing experts rally behind, with its 400 apartment units, 80 of which are designated as affordable based on percentage of median income.

But it failed to get off the ground for years as it was mired in legal troubles, financial uncertainty, design changes and a rotation of different developers. A giant dirt patch has sat largely untouched for years in the middle of downtown Burlington — dubbed “The Pit” by locals.

After lengthy wrangling between various developers, the mayor and the city council, construction finally began last year and it is slated to be completed in 2025.
Weinberger stands firm that pursuing the development was the right move for Burlington. When finished, it will be the city’s largest property tax parcel and stands to bring in hundreds of thousands in annual tax revenue. Weinberger pointed out that, despite the criticism, Burlington is protected from financial risk thanks to negotiated agreements with the developers.

But he said he feels his biggest mistake is not clearly communicating with the public that a development project of that scale would likely be subject to setbacks and delays.

“I don’t think I brought the whole city along to understand that’s what’s going on here.”

Beyond Burlington, some want to see attention paid to other parts of the state to ease pressure on the housing market in its largest city. Richard Watts, director of the Center for Research at the University of Vermont, wants the state to encourage new residents to live in downtowns throughout Vermont, noting there are more than 250 small towns. Making them more enticing to newcomers would involve investing in arts and culture as well as rolling out a state-supported remote work program, he said.

“We absolutely need to grow,” Watts said. “We need to grow in multiple ways, not just adding people who can compete in the housing market but folks from all different types of backgrounds.”

“Bring your job here but don’t necessarily move to Chittenden county,” he said.

San Diego’s homelessness crisis is nearly at a breaking point.

California has the country’s highest rate of homelessness, and in San Diego the number of people without permanent shelter jumped by 14 percent just this year. There are more than 5,000 people experiencing homelessness in the coastal city, about half of whom do not have any shelter at all. There are more than 10,000 homeless people in San Diego county, an increase of 22 percent from last year.

Combating homelessness is the “number one issue” for the city, San Diego Mayor Todd Gloria, a Democrat, said in an interview.

California’s “sunshine tax” explains why it’s one of the most expensive states to live in – many people are drawn to its warm weather, sunny beaches and sprawling suburbs. The average cost of a home in San Diego was $910,000 in May 2023.

Those steep housing prices are against the backdrop of extreme income inequality: a recent San Diego neighborhood-by-neighborhood analysis found a median income of $41,520 in the poorest part of the city compared with a median income of $78,980 in the city overall – a gap that’s increased since 2015.

“We’re trying to address it from all directions, but the problem is enormous, it’s complex, it’s the thing I spend the most amount of time on,” Gloria said.

What’s happening in San Diego is the story of how skyrocketing housing costs coupled with factors like drug addiction, lack of access to mental health services and an unstable job market has left more people living on the streets across the country. And it’s become a politically hot topic in recent elections as candidates blame each other for the mounting problem.

In California, Gloria and neighboring mayors have sparred over the right way to address the issue. Coronado Mayor Richard Bailey claims his city has no homeless population in part because of its zero tolerance policy on encampments. The Republican mayor has gone after Gloria’s “Housing First” plan as a failure that has only heightened its challenges.

San Diego’s homelessness support network is buckling under the stress of thousands of people, many of whom travel from other parts of the county. The city has 57 percent of the San Diego region’s homeless population and 85 percent of its shelter beds. Many of its neighboring cities are seeing increases in homelessness but don’t have the capacity to support those people, Gloria said.

“They are counting on our compassion and goodwill in my city to clear up their problem,” he said. “That’s untenable. I’m trying to apply pressure on other cities to step up and do their jobs.”

Deep political divisions among county leaders are getting in the way of solving the problem of homelessness, said Donnie Dee, CEO of the San Diego Rescue Mission, a nonprofit homeless shelter and recovery center.

“Until we as a county begin to see this regionally and less locally, I don’t know that we’ll ever be able to find a better solution,” Dee said.

Since Gloria took office in 2020, the city’s shelter capacity has increased by 70 percent, with five new shelters opening in 2022 alone. But while leaders have had success placing people into beds, they can’t keep up with the rising rate of homelessness. For every ten people who are placed into housing, 13 others become homeless, according to the Regional Task Force on Homelessness.

Much of the homeless population lives in downtown San Diego. A recent count by the Downtown San Diego Partnership found a record 2,100 people living on sidewalks and in vehicles. That burgeoning population prompted the San Diego City Council in June to pass a controversial ban on homeless encampments on public property.

Supporters of the ban, which passed 5-4 and was signed by Gloria, say it will improve public safety and encourage unsheltered people to use city services. But opponents counter that it’s cruel to force people off the streets and criminalize homelessness when there’s not enough availability in shelters. If people refuse to leave public property, they may be arrested.

The law is set to take effect 30 days after the recent opening of a city-run safe sleeping site that gives about 150 people a place to camp along with free meals, access to restrooms and showers. A second site is scheduled to open later this year.

A longer term proposal San Diego is pursuing involves the purchasing of three hotels and an apartment complex to convert into permanent housing for the homeless with wraparound services.

The $153 million plan has been criticized by some leaders like the neighboring Coronado and El Cajon mayors for its steep cost. It would be paid for by a combination of city and state funds. Gloria acknowledged that the purchase is expensive but reflective of the market.

“This is a high cost housing environment, it’s obviously why we have this problem,” he said. “Let’s not criticize solutions that actually end people’s homelessness.”