Affordable Housing in Crisis


In
September, as Bush administration officials and economists touted
the impending rebound in the U.S. economy, thanks in large part
to the strength of the country’s housing market, the Census
Bureau reported that the ranks of poor in the U.S. increased to
34.8 million in 2002. The percentage of people living at the poverty
rate (a gross understatement of the cost of living in the U.S.)
now stands at 12.4 percent and is adding fuel to the growing fire
of this country’s affordable housing crisis. Currently in the
U.S., a family of four making less than $18,400 is considered poor,
regardless of whether the family lives in high-cost areas, such
as New York city or San Francisco, or on a farm in Kansas. 

The
National Association of Realtors valued the median price of a home
in the U.S. at $168,900 in April 2003. Research shows that, in most
areas of the U.S., it takes roughly double the federal poverty level
to provide a family with basic necessities like food and housing,
according to the National Center for Children in Poverty. The future
of poverty in the U.S. is bleak. Over 20 percent of children under
the age of five live in poverty—the highest child poverty rate
of any fully industrialized nation. 

Also
in September, the Mortgage Bankers Association of America—
the real estate industry’s leading Washington lobby—reported
that the rate of default on federally assisted mortgages to low-income
households reached a record 12.59 percent. Delinquencies and foreclosures
of Federal Housing Authority-backed loans generally result in low-income
families losing their homes and their credit standing, thereby ensuring
added difficulty in securing future housing. The rate, a 12-year
record, highlights the growing divide between the rich and poor.
Finding adequate housing and keeping it, has increasingly become
a daily burden for families in the U.S. 

A
lack of affordable housing is the root cause for homelessness in
the U.S., according to the National Coalition for the Homeless.
Affordable housing advocates estimate that 14.4 million families
in the U.S. have critical housing needs, meaning that they spend
over half their income on paying for rents and mortgages. As of
2000, 3.5 million people in the U.S. were homeless and the number—a
gross underestimation—is steadily growing.  

The
history of federally-backed housing initiatives dates back to the
1920s and reached a highpoint during the New Deal era. Back then,
government and private investment in social programs such as housing
was seen as “for the greater good” of society. The mainstream
stigma now attached to public housing programs, housing projects,
and low- income neighborhoods gained speed in the late 1950s and1960s
when the idea of “urban ghettos” became popularized. 

Ghettos,
which had once served as transitional neighborhoods for immigrant
groups, became associated with inner city crime and poverty. Around
the same time, European influence on architecture in the U.S. gave
way to luxury high rise apartments and homes. Construction costs
began to rise. The federal government detracted money away from
housing programs during decades of recession. Public and affordable
housing initiatives have steadily lost govern- ment backing (and
real estate industry interest) since. 

The
erosion of federal housing assistance has helped perpetuate the
cycle of poverty in this country, according to the North Carolina
Low Income Housing Coalition. Under- funding by the government has
been accompanied by a trend towards de-federalizing the entire program
of affordable housing assistance. Under the Bush administration,
this de-federalization in favor of state-run housing programs has
escalated. Critics of a state-run policy of helping low-income and
poor families secure housing point to inequity and unaccountability
issues that would likely arise. Wanting to avoid a firestorm of
negative publicity surrounding many of its initiatives, the Bush
administration has created a seamless PR machine replete with “feel
good rhetoric,” according to Rep. Maxine Waters, a California
Democrat. 

Reflecting
the traditional disconnect between what the Bush administration
says and what it does, the president has proposed massive cuts to
federal housing programs even as it aggressively pushes forward
with its public relations campaigns promoting minority home ownership
and housing affordability. Mockingly labeled Blueprint for the American
Dream, and America’s Home Ownership Challenge, these campaigns
have consisted of nothing more than a series of press releases and
church and community hall appearances by Department of Housing and
Urban Development officials touting growing housing opportunities.
Housing activists doubt the sincerity of the Administration and
its housing arm HUD. The “challenge” and the “dream,”
which share the goal of increasing the number of minority-homeowners
by 5.5 million by the end of the decade, have been lambasted by
affordable housing advocates as unachievable in the wake of Bush’s
policies. 

Under
this Administration, HUD has been reluctant to share information
and work with community-based and national organizations in relieving
the housing problem in the U.S., advocates say. “We’ve
never come across a HUD so tight-lipped about its policies,”
says Kim Willis, a policy analyst with the National Low Income Housing
Coalition. Willis says that HUD hasn’t even detailed how much
money it has in its coffers and repeatedly refuses to do so. The
unnecessary secrecy surrounding HUD even translates into its communiqués—its
spokespeople are forbidden from allowing their names to appear in
news stories. 

Why
would an agency dedicated to fostering community-building and improving
the quality of life of people in the U.S. take such a contentious
stance in sharing information while simultaneously lauding its own
efforts? The answer is simple. Many of the Administration’s
housing policies are not being implemented. Meanwhile, the Bush
PR machine promotes the image of his “compassionate conservatism”
by showing a ruling class government that pretends to be interested
in the working class. 

Congress
and housing advocates are quick to point out that despite the PR-blitz
surrounding the Administration’s commitment to the fight for
affordable housing, not one new home buyer has been created from
the campaigns. 

Since
President Bush took office, the home ownership gap between whites
and African Americans increased from 26.1 percent to 27.3 percent
and from 26.4 percent to 28.3 percent between whites and Hispanics,
according to Census Bureau statistics from early 2003. 

The
Administration has yet to implement two of its key housing-assistance
initiatives. Two and a half years after the government authorized
a bill allowing low-income families to use housing vouchers to pay
for a down-payment on their homes, there is no federal record of
this plan in action. HUD, in true form, insists that the program
is up and running, according to the House Financial Services Committee
in a June 2003 report. The Single Family Tax Credit, which would
offer home builders tax incentives to develop in low-income communities,
has been systematically excluded from Bush’s tax cuts. This,
despite the fact that it was Bush who proposed the idea in 2002. 

Further
Cuts Proposed 

Bush
plans to escalate his assault on public housing next year. For its
proposed 2004 housing budget, the Administration wants to eliminate
HOPE VI, a demolition and revitalization program for the country’s
most decrepit and dangerous public housing units. While a controversial
program because families are displaced while their homes are torn
down and rebuilt, HOPE VI’s benefits have prompted even its
harsh critics to rally support for its inclusion in the HUD budget.
The government has spent about $4.5 billion on the program over
the past decade, a small amount when compared to the $1.3 trillion
in tax breaks the president has enacted. 

President
Bush also wants to slash the funding allotted to a popular housing
assistance program, Section 8 housing vouchers. Housing vouchers
are intended to bridge the gap between the cost of housing and the
incomes of low wage earners. Bush’s proposed cuts to the housing
voucher program represent the first time in the program’s 29-year
history that an Administration would break the federal government’s
longstanding commitment to renew all vouchers in use, according
to the National Low Income Housing Coalition. Currently, 1.7 million
low-income families use housing vouchers to help pay for their homes. 

“The
Administration is under funding such programs in order to dismantle
them,” Willis says. According to her organization’s estimates,
Bush’s proposed $12.55 billion for housing vouchers represents
a shortfall of $1.26 billion and would put 180,000 families at risk
of losing their homes. 

“The
Administration’s proposed FY2004 HUD budget represents a 63
percent reduction since the last year of the Ford Administration,”
according to the National Coalition for the Homeless. 

In
addition to the proposed cuts, Bush has proposed major changes to
the organization of the program, wanting to move it from a federal
to block grant program with spending for it at the discretion of
states. Critics argue that since housing costs have increased much
faster than the rate of inflation, block granting the voucher program
would almost certainly result in devaluing it. 

While
the Bush administration and HUD rationalize the cuts in housing
programs as necessary to fund its wars, affordable housing advocates
say it is Bush’s deep tax cuts of 2001 that are shrinking federal
resources. The Bush administration’s tax cut on dividends would
render housing programs like the Low Income Housing Tax Credit under-funded.
The housing tax credit grants breaks to developers who build affordable
housing and is responsible for the preservation of 110,000 affordable
housing units every year. Without incentives to build, investment
in housing production that relies on the low income housing tax
credit will dwindle, says Sheila Crowley, president of the National
Low Income Housing Coalition. The issue of these tax credits solidifies
the fact they will help only the wealthiest people in the U.S. 

The
fate of Hope VI, vouchers, and the entire $31.8 billion proposed
HUD budget now lies in the hands of Congress. Both Congressional
Democrats and Republicans have vowed to fund HOPE VI and have proposed
more money than the Administration for the housing voucher program. 

“The
hypocrisy of the Bush administration is just staggering,” said
Rep. Waters in June after the Administration marked it National
Home Ownership Month. “Feel good rhetoric about the importance
of home ownership is being used as a smokescreen to hide the fact
this Administration is starving federal housing programs.”
 


Chhandasi Pandya
is a journalist based in New York.