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M R EP O RT | 39 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T ORIGINATION THE LATEST Could the Solution to Affordability be Found in Europe? The idea of public housing is one that is beginning to gain steam. A ffordability concerns continue to have a stranglehold on the U.S. housing market. CoreLogic and S&P's latest Case-Schiller Index found that home prices rose 3.8% in December 2019, which is an increase from the prior month's 3.5%. Additionally, the Census Bureau reported the average sales price of a new home in January 2020 was $348,200—7.17% higher than the December 2019 estimate of $324,100. However, a report by National Public Radio (NPR) sug- gests a possible solution to the affordability crisis may be model- ing public housing that is used in Europe. The idea is also gaining some traction. Maryland Delegate Vaughn Stewart (D) is introducing legisla- tion to create the state's first "social housing" program. In Washington D.C., Will Merrifield, a candidate for an at-large seat on the D.C. Council, has made European-style public housing a pillar of his plat- form, the NPR said. The NPR adds that Presidential candidate Bernie Sanders has of- fered support to the idea. NPR's report said social housing is still a "radical concept" in the U.S., where government-funded housing is at times associated with crumbling apartment towers, and occasionally, filled with crime and poverty. "First constructed as segre- gated housing for low-income Americans during the New Deal era, many public housing projects were reserved for poor African Americans systematically shut out of the housing market. As condi- tions worsened in public housing, the federal government pulled out, leaving local authorities with enormous maintenance backlogs and residents in unsafe conditions," NPR said. The report continues by saying since the end of World War II, public housing in D.C. and the rest of the nation has been "reserved for poor residents." Peter Gowan, a Senior Policy Associate with Democracy Collaborative, said public housing has never had a working financial model. "Public housing in the United States was designed to fail," Gowan said. "It was designed to be segre- gated, it was designed to be low- quality. Where a few public housing authorities tried to do it very well, it was disinvested from later on." According to NPR, the D.C. Housing Authority faced deferred maintenance costs of more than $2 billion on more than 6,600 public housing units. Affordability concerns and tight- ening inventory could lead to one of the most competitive homebuy- ing seasons in memory, according to a report by Redfin. Redfin previously reported that home listings fell 11.4% annually in January—the biggest decline since March 2013 and the sixth straight month of declines. "Low mortgage rates have brought buyers back to the hous- ing market, but a lack of listings means buyers are having to com- pete with one another to secure a sale and lock in a mortgage rate," said Daryl Fairweather, Redfin Chief Economist. "This competi- tion pushes up prices, which means that even though buyers can get a good deal on a mort- gage now they are often paying a higher sticker price." The San Francisco Bay Area was found to be the most com- petitive city in the nation, with agents estimating more than 90% of homes had multiple officers. San Francisco has a median-home price of more than $1 million.