Housing and Low-Income Americans

The timing could not have been more appropriate: On the first day of the annual conference in Washington, D.C., of the National Low Income Housing Coalition, the Department of Housing and Urban Development released its report to Congress on worst-case housing needs. The title itself goes to the heart of the issue: Rental Housing Assistancethe Worsening Crisis. The coalition, made up of over two dozen grass-roots organizations around the country, serves as a collective voice for low income Americans facing this worsening crisis in their ever more difficult search for an affordable place to live.

Among the report’s findings is the fact that 5.4 million renter households are experiencing worst-case housing needs. That is, they are either paying over half their income on housing alone or are living in housing that is severely inadequate. It may come as a surprise to better-off Americans that many of the worst-case households are made up of working families; employment is no longer a guarantee of housing affordability as rents on the open market soar to new highs. Exacerbating the problem is the steady shrinkage of units that are both available and affordable for low-income renters. Nor is the problem confined to cities. According to the report, families classified as very low income are especially liable to face worst-case needs when they live in the suburbs.


The keynoter at the March 27-29 conference was Andrew Cuomo, secretary of the Department of Housing and Urban Development. In commenting on the newly released report, he observed that 1994 marked the first time that the number of new public housing units fell to zero, a situation that reflects Congress’s basically unfriendly stance toward HUD. The absence of new public housing production has been a factor in creating the increased level of worst-case needsa cruel shadow to the strong economy, as Mr. Cuomo put it, made all the more cruel by the fact that it is this same strong economy that has driven up rents around the nation to levels far beyond the reach of many low income home seekers.

Another pressure on America’s poorest housing seekers was the enactment of the 1998 Quality Housing and Work Responsibility Act. In an effort to ensure greater income diversity in public housing, the law mandates that at least 40 percent of newly available public housing units must go to families with incomes less than 30 percent of the area’s median income. The remainder of newly vacant units are to be reserved for families closer to the middle income rangethose below 80 percent of the medianrather than for the very poor. The new ratio mandated by the 1998 law thus still further curtails housing opportunities for those who can afford the least for rent. Victor Bach, director of housing policy and research at the Community Service Society of New York, said during the conference that because of the law, in New York City alone between 10,000 and 16,000 public housing units for the very poor will have been lost by the year 2010. He sees the law as largely an attack on public housing, which, to his mind, has been basically successful.

In an effort to help resolve the dilemma faced by low-income renters, HUD provides a certain number of Section 8 vouchers. Recipients pay between 30 and 40 percent of their income toward rent, and the vouchers pay the rest. On the same day that Mr. Cuomo spoke to the several hundred people attending the N.L.I.H.C. gatheringa varied mix of low income renters, organizers, poverty lawyers and representatives of public housing authorities and religious groupshe also held a press conference at which he commented on the new HUD report. With him at the press conference was Robert Greenstein, director of the non-profit Center on Budget and Policy Priorities. Mr. Greenstein, along with Mr. Cuomo, emphasized that vouchers represent the best way to address the present shortfall in affordable housing; they give the prospective renters the mobility to move to areas where job opportunities may be more promising and educational possibilities for their children better.

But as both pointed out, the number of vouchers falls far short of the need. Largely through Mr. Cuomo’s efforts before Congress, in each of the past two years more have become available. As part of the budget for fiscal year 2000, Congress allotted 60,000. In his budget proposal for 2001, moreover, the President has requested 120,000: 18,000 for the homeless, 32,000 for people leaving welfare for work, 10,000 for the production of new units and 60,000 for the untargeted population. But no assurance exists that funds for the requested 120,000 will be forthcoming; as Mr. Cuomo said, last year he had hoped for 100,000, but received only the 60,000 instead.

Even with vouchers in hand, though, not all are successful in finding landlords who will accept themsometimes for discriminatory reasons, but also because of the tight rental market. In addition, in parts of the country where rents have soared, owners of so-called project-based Section 8 properties who have contracts with the federal government to reserve a set number of units for voucher holders, may decide to opt out of the program when their contracts expire. Once free of the contracts that helped pay for their buildings, the owners can then charge market rents, which may be much higher than the value of the vouchers. Looking for higher profits, other owners are choosing to prepay the mortgages on their buildings, which is allowable once their properties have reached their 20th birthdays. In an effort to slow the rate of opt-outs and prepayments, HUD can now authorize enhanced vouchers that approach the fair market ratebut they may still be less than what owners demand.

Vouchers used to be valid for five years, but Congress has now mandated that they hold only one year’s validity, after which they must be renewed. So far this has been done, but the requirement to renew them year by year causes anxiety among many tenants, emphasizing in their minds the precariousness of their living arrangements. Situations regarding vouchers, moreover, can vary according to geographic region. Arlene Lahti, a housing organizer for the Minnesota Senior Federation’s Northeast Coalition, said during the conference that in her home town of Duluth, property owners are quite willing to renew their Section 8 contracts for voucher holders; the city’s relatively weak economy has led many job seekers to migrate 150 miles south to Minneapolis-St. Paul, where the chances for employment are higher. Housing in Duluth is therefore more accessible. The booming economy in the Twin Cities, on the other hand, has led to soaring rents, which tempt landlords to opt out of their contracts or prepay them for the sake of greater financial gain on the open market. According to an advocacy group in Minneapolis, in the Twin Cities areawhere the rental vacancy rate is about 1 percentonly one in nine would-be renters who receive vouchers is successful in finding qualifying housing.

Adding to the frustration of voucherholders is the fact that vouchers typically expire after 120 days if unused. Although one-time recipients can reapply if unsuccessful in using them, the tightness of markets in places like Minneapolis inevitably dampens their hopes. HUD’s Center for Community and Interfaith Partnerships is currently engaged in a campaign to encourage faith-based organizations to play a role in assisting voucher holders with housing search assistance and other forms of counseling, as well as reaching out to landlords to encourage them to take part in the Section 8 program.

In other parts of the country where older low income housing projects are locatedlike the high rises built in the 1960’sdemolition of aging projects has also substantially reduced the stock of affordable units. A pervasive refrain at the conference centered on the theme that demolition has been excessive, even when vouchers and other relocation arrangements have been made available to displaced tenants. Lynne Ide, associate director of the Connecticut Housing Coalition, said that for many people, public housing represents what she termed an ark in the flood. And yet six city mayors in Connecticut, she added, are inimical to public housing and would like to decrease the number of units in their localities because of a negative attitude toward poor people in general. In addition, some of the pressure for demolition comes from developers, who see in the properties slated to be torn down an opportunity for re-development for lucrative commercial use.

The latter scenario is also true of Chicago, which faces a major loss of public housing. One of the largest of the high-rise projects facing demolition, Cabrini-Green, is just blocks from Lake Michigan. The land on which it stands is consequently desirable for potential development for upscale usagea circumstance not lost upon city officials. Daniel Lindsey, a Chicago attorney with the National Center on Poverty Law, acknowledged in an interview during the conference that many of the units in projects of this kind are vacant and in bad condition and should be torn down; but others, he said, are repairable. The large-scale loss of units will make it still harder for needy families in Chicago to find a place to live.

If HUD’s report on worst-case housing needs makes the affordable housing situation seem downright bleak, the possibility for beneficial change is potentially at hand in the massive surpluses that have accrued at both the state and federal levelspartly because of welfare reform and partly because of the economy itself. How those surplus funds will be used remains to be seen. Congress should commit itself to using substantial portions to create more bricks and mortar subsidized housing to a degree that might at least approximate the amount created during the Carter administration. Vouchers alone, especially given the small numbers currently available and the barriers to their use, cannot solve the worsening crisis described in the report.

A modest brightening of the picture may lie at hand in the $5 billion in excess revenues from the Federal Housing Administration’s mortgage program. The President announced in early March that he was instructing HUD to devote these funds to affordable housing, rather than let them be absorbed into the federal treasury. Used in this way, the $5 billion would be a step in the direction of realizing Congress’s own 1949 assertion that our housing policy should lead to a decent home in a suitable living environment for every American family. Attainment of that goal is still far in the futurethough as speakers at the conference observed, the goal is an achievable one. What is needed is the political will, and that must begin with a commitment on the part of a Congress reluctant to take the concrete steps needed to address a problem that grows worse year by year. So far Congressional legislators have not shown themselves inclined to demonstrate this kind of will. Non-profit advocacy groups like the National Low Income Housing Coalition keep reminding them that they should.

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