Affording a Home

Hard though it may be to believe, the United States does have a severe housing problem at a time when Americans have never been better housed, and home ownership is at an all-time high.

Millions of low- and even moderate-income families are having trouble finding homes and apartments they can afford near the places they work. At least 13 million Americans have critical, unmet housing needs, estimates the US Department of Housing and Urban Development (HUD). And some 4.9 million families pay more than half their income for shelter. The demand for low-cost rental housing has doubled over the past 10 years.

For many people, income has simply not kept pace with climbing prices for homes and apartments - particularly in fast-growing metropolitan areas with restrictive zoning. These people might be school teachers in Silicon Valley, sales clerks in New York City, or office cleaners in Seattle.

Many people just find jobs elsewhere, take second jobs, or live farther from work and commute long distances. Many local and state governments try to help out by requiring communities to work with developers to build "affordable" housing - often over the objections of more affluent neighbors. And private banks eager to be community players offer special loan rates for low-income customers.

The Bush administration, and particularly HUD Secretary Mel Martinez, took a much-needed step March 20 with a significant expansion of the Federal Housing Administration program to insure mortgages and thus stimulate construction of new housing where it's most needed. HUD plans to add $1 billion to the program.

At the same time, the department should continue the ongoing reorganization of public housing policy. Too many federally funded projects became high-rise slums. HUD's long-range plans call for the demolition of 61,000 public housing units. They're scheduled to be replaced by 42,000 new units designed to mix poor and moderate-income tenants. HUD is counting on federal incentives for private builders to further boost the supply of low-income housing.

Chief among those incentives is the low-income housing tax credit. It's effective in encouraging builders to enter the low end of the market, but this, too, needs expansion. It hasn't kept up with rising construction costs.

Increased home ownership is the Bush administration's centerpiece for housing policy. One idea is to let low-income families save part of the rent vouchers issued by HUD and use the money as down payment for a new home.

At least 15 states are using some of the funds available under the federal welfare reform law to help poor families find better housing. Typically the funds are used to bolster family savings for down payments.

But Washington and the states have to keep clearly in mind the millions of such families who will continue to rent. The availability of affordable rentals is crucial. Many cities face the dilemma of urban gentrification forcing up rents and thus forcing out low-income tenants.

Nonprofit groups are increasingly important players, too. And many faith-based groups may eventually receive federal funds for housing under a Bush initiative.

While a slowing economy may loosen tight housing markets in some areas, the need for more low-income housing will remain, demanding more teamwork among all the players trying to meet this need.

(c) Copyright 2001. The Christian Science Monitor