Under the Obama administration, officials at the Department of Housing and Urban Development have said they want a more balanced housing policy for low-income families that doesn't neglect renters just to expand homeownership. That goal was reflected in Obama's budget, and the Center for Budget and Policy Priorities found today that the president's proposed increase in funding for vouchers in the program formerly known as Section 8 would be enough to renew all vouchers for those who currently hold them:
The added funds are needed primarily for two reasons. First, approximately 50,000 new vouchers that Congress has funded in recent years for homeless veterans and other groups will be renewed for the first time in 2011. Second, because of continued high rates of unemployment and weak wage growth, the gap between tenant incomes and housing costs is likely to widen this year and next in spite of the general weakness in the housing market. This pushes up voucher costs, which cover the difference between 30 percent of tenant incomes and the rental costs of modest apartments.
For about a decade, low-income housing policy in the U.S. has tilted toward finding new ways for low-income families to find homes. Good, sane programs that helped participants save toward a down payment and qualify for good mortgages existed, but only alongside all the predatory lending practices and risky financial instruments that helped spur the financial crisis (of course, low-income families were not the only consumers of these products).
The point of homeownership is to make families and neighborhoods more stable, but the high-rate of foreclosures in the wake of the large push toward homeownership has done the opposite of that. Now the rental market, long neglected, is likely to be overwhelmed. Low-income housing advocates have called for more balanced policies that protect renters and expand rental properties, too. After all, a stable renter this year is a stable homeowner in future years.
-- Monica Potts
