Affordable housing programs have fallen lower and lower on Congress' priorities list over the last decade. But the sub-prime mortgage crisis offers a silver lining: the potential for the less-well-known problem of affordable housing to piggyback on the attention given to its more glamorous cousin. For example, a measure of the recent housing bill allows local housing authorities to purchase foreclosed homes to provide affordable housing. It's a start, but real improvement will require broader efforts. What is needed for more affordable housing -- attention and funding -- will come only when its challenges are linked with policy challenges like climate change, crime, education, and economic development.
According to the Department of Housing and Urban Development (HUD), there are 6 million households that qualify for the full extent of government affordable housing assistance, though many fewer will receive it. This is the largest number of households with worst-case housing needs since the government began counting in 1990. These families earn 30 percent of the Area Median Income (approximately $20,000 or less per year) and are eligible for HUD programs that subsidize their rent beyond 30 percent of their income per month. However, there is a shortage of available units -- in D.C. alone there are 22,000 people on the Housing Authority assistance wait-list; multiyear wait-lists exist in most cities. Households that earn up to 80 percent of the Area Median Income -- about $50,000 per year -- also have trouble finding affordable housing and are helped along with tax credits and other indirect subsidies, like inclusionary zoning.
The last major government initiative in public housing was the HOPE VI program, passed in 1993 under President Bill Clinton, which funds the demolition and rebuilding of these projects as mixed-income communities. This program, virtually eliminated in funding cut-backs last year, is part of a package of policy tools that includes rent vouchers, tax incentives for developers, zoning regulation and direct public subsidies that has created a wide, and confusing, approach to supporting affordable housing. These programs have also seen resource problems; HUD's housing subsidies for 2008 are underfunded by billions of dollars.
"There's a perception that public housing [is] being dealt with, when it actually isn't," Conrad Egan, head of the National Housing Conference, a coalition of affordable housing organizations, said. "The capital funding that's needed to renovate and recapitalize is about 30 billion in the hole."
We know the need, but what we don't know about these policies is just as problematic. There has not been the funding to support comprehensive research into the efficacy of the variety of programs that provide affordable housing, according to experts in the field. Given the variety of policy-making tools available at all levels of government, liberals need to realize that fixing this problem will not be an easy undertaking.
"The one thing we've shown conclusively is building a large public housing development and isolating it in a poor, racially segregated neighborhood is bad," Susan Popkin, a housing expert at the Urban Institute, said.
Reporting on the issue has been woefully inaccurate. A recent Boston Globe story examining Sen. Barack Obama's relationships to publicly subsidized real-estate developers discredits public-private partnerships, but those familiar with the programs disagree. Martin Abravanel, a former director of policy at HUD, says that public-private partnerships shouldn't be judged by one bad experience and that these institutions can be successful depending on the maintenance of a steady funding stream. The tenant organization at Grove Parc, the development central to the story, released a statement saying the Globe article missed the real problem -- HUD budget cuts and the destruction of public housing.
Another recent story in The Atlantic argues that failing government housing programs lead to rising crime in the surrounding suburbs as low-income residents are forced out of inner-city projects, but experts disagree with its final conclusions. Popkin, who was quoted -- or, in her words, "abused or misused" -- in the story, told me that a host of other indicators could point to the crime pattern identified in the story. Her research shows that most voucher users moved to neighborhoods with "dramatically" lower crime, where youth-delinquency rates dropped, and that there is no evidence that voucher users committed crime. She also testified to the efficacy of housing vouchers: "There has been a national study done [that] the effect of having a voucher for welfare populations has reduced homelessness by 75 percent," she said.
Popkin regrets that the piece missed the real failure of these policies: not that they increase crime but that the hardest cases -- seniors, the mentally ill, people with criminal records -- were unable to take advantage of the program.
Popkin favors the mixed income developments like those in Portland, Oregon, which feature units that range the spectrum from public housing to market-rate and first-time homes. The development also includes retail and office space, as well as schools. This focus on building community, with its shades of New Urbanism, could be the future of affordable housing development. One ambitious mixed-income project is in the District of Columbia, where the city is funding HOPE VI projects that lost federal funding in the budget cuts.
But for truly comprehensive housing revitalization, the federal government has to fund these programs. Obama has a relatively ambitious housing plan that includes funding community-based housing programs, the creation of a new $500 million affordable housing development fund, and continued support for affordable housing tax incentives. Sen. John McCain does not mention affordable housing on his Web site, and his staff did not reply to requests for comment on his housing policy.
Bill Kelly, president of Stewards of Affordable Housing, a coalition of nonprofits that operates 80,000 apartments in 48 states, says the key to raising awareness is linking affordable housing to other issues, such as climate change. Kelly says affordable housing in urban centers can help contain the environmental costs of commuting. Affordable and assisted housing in mixed-income communities also have the ability to improve educational outcomes, as studies continue to show that the economic milieu is a leading indicator in successful education outcomes.
"Affordable housing, public housing particularly, although it seems to be on the interests of most mayors in the country, hasn't caught the Congress' interest," Michael Kelly, director of the D.C. Housing Authority and president of the Council of Large Public Housing Authorities, said, stressing the need to link housing to its results. "When I mention the revitalization of the neighborhoods here in the District, what that translates into is new supermarkets and new revitalized schools -- less public safety issues."
Further, as the sub-prime mortgage crisis continues to intensify, more pressure will be brought to bear on an already overburdened rental market as foreclosures force families from their homes. Bill Kelly notes that there is "a lot of overblown rhetoric about homeownership, and the fact is that rental housing is people's homes. We need to recognize that." Though affordable housing is a different problem from predatory lending and the fallout of the sub-prime mortgage crisis, the two challenges exacerbate each others' difficulties. It is harder to start new public-private development projects -- now a key source of resources during the federal-funding drought -- with lenders so leery to make new deals in the current economic environment.
Kelly and other practitioners recognize that the key to increasing the resources for affordable housing and the way to build affordable housing is one and the same: Remember the people.
"An important piece of it will be to change the focus from boxes that people get shelter in to housing as a platform in which they lead their lives," Kelly said. "We need to start telling the stories of the people that live in this housing."