Is prioritzing homeownership a “sacred cow?”
October 14th, 2009By Sara Wolfson
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| Liberty Harbor Townhomes in Jersey City Originally uploaded by Hoboken Condos |
Facing budget shortfalls, Washington, D.C. is making cuts to homeless services to the tune of some $20 million. But the District isn’t alone in either the problem or the solution — San Fransisco is also reducing shelter and employment service funding by nearly $3 million. The homeless are finding life in Minneapolis more difficult as well. Advocates say that the homeless everywhere are finding it more difficult to get the help the help they need.
It isn’t merely that there are more people who need assistance in rough times. It’s also that the government continues to prioritize the dream of buying that home with a white picket fence over the dream of making sure everyone has a place to call home.
In this week’s Citiwire column, Neil Peirce says that the federal government needs to stop treating homeownership as a “sacred cow,” one heavily subsidized with homeowner tax credits. The federal tax credit for first-time homeowners goes blindly to all first-time buyers — regardless of whether or not they need it to afford a home or would have bought without it.
Peirce suggests its perhaps a good time for the feds to recognize that renting is a good solution for many people, particularly the increasing over-65 population and young, single adults just out of college — and that $15 billion in tax credits are offered at the expense of assisting those who can’t even afford to rent:
While the ranks of renter households have been increasing rapidly – by 1 million alone in 2007, by one count – the supply of available rental units has shrunk dramatically, partly because of foreclosures, abandonment and demolitions of older apartment complexes.
In time, the natural dynamics of the market will trigger new construction and likely correct the most serious shortages. But that leaves a huge equity issue, posed by Sheila Crowley, president of the National Low Income Housing Coalition:
“Affordable housing for the lowest income people has been in short supply for a long time; the housing bust and the recession have only made it worse.”
The situation has been exacerbated, housing expert John Kromer reports for Planetizen, by the last two decades’ unprecedented decline in units subsidized by the federal government. A prime reason: demolishing rotting and dangerous older public housing projects. They’ve been replaced by much more desirable “Hope VI” and other lower-density projects offering a mix of sales and rental units – great for livability and safety and a boon for cities, but sharply contracting overall supply.
Plus, the recession has forced a big squeeze in the federal government’s so-called “Section 8″ program of housing vouchers that help local agencies provide very low-income families with leasing assistance in the private market. The vouchers generally fill the gap between 30 percent of a family’s income and the rent they have to pay.
But Washington appropriates a finite number of dollars for the vouchers. With unemployment and poverty rising in the recession, there’s a severe pinch. Examples: cutbacks by the Monterey (Calif.) Housing Authority mean some tenants will have to pay up to 60 percent of their income for housing. The Birmingham, Ala., authority has cancelled 300 recent vouchers, threatening many families with evictions.
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