Mennonite Central Committee seeks to address housing needs across the United States, refurbishing houses in Appalachia and advocating for just housing practices for those still struggling after hurricanes Katrina and Ike. But until the recent economic crisis, many of us took housing for granted.
The need for safe, affordable and permanent homes is no longer something we can ignore. This new understanding has highlighted some of our society’s weaknesses and can point us toward practices that care for our neighbors and ourselves in the future.
In 2008 the Troubled Asset Relief Program (TARP) granted up to $700 billion to purchase debt from banks and companies facing bankruptcy and simultaneously allowed the government to purchase shares of the companies.
More recently, the Obama administration extended tax credits to homeowners and first-time homebuyers. Now, first-time buyers will receive up to $8,000 in tax credits, and eligible homeowners up to $6,500, if they enter into a contract by April 30. Homeowners can refinance mortgages with lower interest rates and more manageable payments.
This effort and similar legislation took some of the edge off of the mortgage crisis. Housing indicators are improving and economists say we are headed out of the recession. More people are confident that they will keep their homes and have a permanent place to live. Congress is considering legislation to form the Consumer Financial Protection Agency, to ensure that harmful practices do not continue.
Although the recession is deep and homeowners continue to feel strain, there are hopes for relief and protection. The results may not be as positive for individuals and families with low incomes. For them, the housing crisis only heightened the struggle to find and keep affordable, safe and adequate housing.
A Brief History of U.S. Housing Policy
Housing assistance in the U.S. arose during the Great Depression, with the U.S. Housing and Community Development Act of 1937. The legislation designated government funds for building public housing, simultaneously creating jobs in the local area.
Since then, public housing agencies (PHAs) have rented units to low-income residents. In 2008 there were 1.16 million available public housing units, an inadequate number for the amount of need. In some areas, applicants can be on waiting lists for up to 10 years.
Public housing units were often built far from basic services such as jobs, schools, banks, hospitals and public transportation. The resulting lack of mobility disproportionately affected communities of color.
In an attempt to address these problems, Section 8 voucher-based programs were created to increase integration into mixed-income neighborhoods. Vouchers allow a tenant to purchase a unit in the private market by subsidizing a portion of the rent.
These subsidies are either project-based (given to an owner who maintains a unit specifically for low-income housing), or tenant-based (subsidizing any private unit with certain limitations). In 2008, there were 3.47 million Housing Choice vouchers available.
Although the Section 8 programs help many individuals and families integrate into mixed-income, higher opportunity areas, inadequate living conditions in public housing continue, largely because of chronic underfunding for maintenance and upkeep.
Currently, about 100,000 affordable apartments are built each year, but under-funding means that for every unit built, two public housing units are lost to deterioration, abandonment or conversion.
In 1992 HOPE VI was enacted in an attempt to permanently address these problems by demolishing the worst public housing projects and building mixed-income communities in their place.
Although the project initially mandated that one low-income unit be built for each destroyed, this standard was eventually dismissed in the name of expediency. Since 1995, 165,000 public housing units have been demolished without replacement. HOPE VI became notorious for displacing tenants, creating long waiting lists and tedious screening of applicants for the new homes.
Our Current Situation
Of the major housing assistance programs, Section 8 may be the most successful in alleviating poverty and providing low-income households with some social mobility.
However, Section 8 increases the number of renters in the market without simultaneously creating more units. In the wake of the recession, increased foreclosures have pushed former homeowners into the rental market, and have left many habitable homes empty while awaiting completed foreclosure.
The important successes of Section 8 do not negate the effect it has on the market. In order for the program to be as successful as it could be, affordable units which are both accessible and adequate for low- and extremely low-income households need to be integrated throughout a city.
Further, the pressure on private owners of affordable housing is high. The increased demand for affordable units has pushed the fair market value of many rentals above the maximum payment allotted from PHAs. The option of higher profit creates an incentive for an owner to leave the program rather than renew a contract. Each year, 10,000 to 15,000 units are lost due to owners’ exits.
The needs of the housing market run through almost all areas of our society, but the effect has been most profound on those who were in need long before the recession. Low-income renters have desperate needs that are not addressed by most of the legislation passed to address the recession.
For example, in 2008 alone, it is estimated that $144 billion in tax breaks were given to homeowners. The recent tax cuts contribute to this number. Although there are more homeowners than renters, these funding priorities are unbalanced and shameful when compared to the $46 billion entire budget for low-income housing programs.
Unbalanced aid from the government prioritizes the needs of banks and homeowners over renters and low-income families, concentrating wealth for the upper- and middle-class. Since renters and low-income families are disproportionately people of color, these policies systemically contribute to race, sex and class discrimination.
As Christians, we can ask for a shift in priorities. Several pieces of legislation have been introduced to provide funds for the National Housing Trust Fund (NHTF). The NHTF is a permanent fund meant to build, preserve and rehabilitate housing units. Ninety percent of the funds must be used for rental housing. By increasing the number of available units, programs like Section 8 would be more successful in alleviating poverty by providing homes, safety and greater opportunity.
The need for more balanced aid is great. Homeowners and renters have an equal need for shelter, comfort, safety and the confidence of a permanent home. This is not reflected by legislation that addresses homeowners’ needs while neglecting lower-income households.
We have the resources to ensure that all who live in the United States have secure dwelling places. As a church, may we pray and act for a home for everyone.
