Throughout the Bush recession and the ensuing jobless recovery, the one consistent source of good economic news has been from the housing market. The value of the average home increased 6.48 percent in the 12-month period ending on March 31, and it is up a hefty 38.04 percent over the past five years. This continuing strength has given homeowners a cushion in the value of their assets during an era of declining stock portfolios. It has also provided construction jobs during a catastrophic period for employment in the manufacturing sector.
This has been good news for families who own homes. But the millions of Americans who rent their homes -- a disproportionately poor, disproportionately young group -- face an increasingly bleak situation. A new report released Monday by the National Low Income Housing Coalition (NLIHC) reveals that the national housing wage (the amount of money per hour a full-time worker would need to make in order to rent a two-bedroom apartment on less than 30 percent of his or her income) for 2003 stands at $15.21, a 3.75 percent increase over 2002. Overall, the housing wage has increased 37 percent since the coalition began collecting comprehensive data in 1999.
The report comes out just four days after members of the Senate Appropriations Committee joined their House colleagues in endorsing the Bush administration's request to cut funding for the housing vouchers program -- the federal government's main means of addressing the issue -- by providing $900 million less than the Congressional Budget Office estimates will be necessary to continue the program at its current level.
As a result, more than 100,000 vouchers authorized by current law will go unfunded in the coming year. This will swell the ranks of the roughly 5 million households that, according to the most recent census data, must choose between spending more than half their incomes in rent and utilities or living in seriously substandard accommodations.
The new federal stinginess comes at a time when states and local governments, which typically must balance their budgets each year, are cutting funds for housing programs in order to compensate for falling tax revenues and rising demands for expenditures on homeland-security-related tasks. As a result of funding cuts, "Shelters are closing their doors," according to Zelna Joseph, a representative of N Street Village, a group providing services to homeless women in the Washington area, who spoke Monday at the unveiling of the NLIHC report. At the same time, she said, rising housing costs and disappearing jobs are increasing the demand for services. Also at the press conference, Gerry Creedon of the Virginia Interfaith Center for Public Policy noted that "half of the people in shelters in Virginia are employed" -- underlining the extent to which housing is increasingly out of reach for low-income families.
Unsurprisingly, the least-affordable parts of the country are the metropolitan areas around places such as San Francisco, Boston, New York and Washington, but rural America is feeling the squeeze as well. In West Virginia, America's cheapest state for housing, the local housing wage is 171 percent of the minimum wage. Even in sparsely populated states where land should be relatively cheap, rents may be high simply because few rentable units have been constructed. Alaska and New Hampshire, for example, have the seventh- and eighth-highest housing wages, at $16.75 and $16.49 per hour, respectively. An Alaskan household -- either a single person or a couple -- would need to work a total of 94 hours per week at the state's minimum wage ($7.15) to rent a two-bedroom apartment, while a family or single person in New Hampshire (where the minimum wage is $5.15) would need to put in 128 hours to rent a similar apartment.
Still, the housing crisis is largely an issue for the more tightly packed blue states, making it unlikely that the Bush administration will experience a change of heart and come to the rescue with a generous supplemental budget request. Of the 52 jurisdictions surveyed for the NLIHC report (all 50 states plus Puerto Rico and the District of Columbia), eight of the 10 most expensive went for Al Gore in 2000. Nonvoting and very poor Puerto Rico took the cheapest slot, followed by 19 Bush states in a row.
With the federal government unsympathetic and local budgets sharply constrained, progressives might take the opportunity to re-evaluate some regulatory measures that have proven popular in left-leaning areas and have aggravated the housing problem.
While a misguided ballot measure to drastically curtail building heights in Berkeley, Calif., failed last November, that city and many others continue to counteract laudable affordable-housing initiatives with zoning laws that send market prices through the roof and impede the construction of new housing. This August saw a typical, if unusually high-profile, incident, in which ABC News anchorman Peter Jennings led the charge to get the New York City Landmarks Preservation Committee to block the construction of a new 14-story apartment on the Upper West Side. His campaign is supported, as such things often are, by local liberal state legislators. Commissions and boards of this sort that allow well-off homeowners to protect the "character" of their neighborhoods at the expense of construction that would bring prices down for everyone else are all too common in the United States.
To be sure, such restrictions do not always directly block the creation of housing that would be affordable for low-income families -- it's unlikely, to say the least, that any minimum-wage workers would have been moving in across the street from Jennings. But by capping development in high-income areas, such efforts force builders to put expensive housing elsewhere, which in turn leads to the waves of gentrification that push the working poor farther and farther from centers of employment and transportation. In the worst-case scenario, it pushes them out of housing altogether, onto the streets and into overcrowded shelters.
Eliminating barriers to new housing construction need not imply giving in to forces of suburban sprawl. Indeed, the Portland, Ore., metropolitan area, which features America's oldest and toughest major sprawl restrictions, has found ways to increase housing supply that, according to a recent Fannie Mae Foundation study, have allowed the area to limit growth without experiencing higher housing prices than the rest of the nation during much of the period studied. Zoning reforms are no panacea -- and no substitute for funding voucher programs and public-housing projects at an adequate level -- but they would help, and they wouldn't constitute a further drain on limited local resources or be dependent on the goodwill of the Bush administration.
Matthew Yglesias is a Prospect writing fellow.
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