Fears of recession have many people worried. Subprime lending and the ensuing foreclosures debacle are blamed for the stumbling markets and growing housing crisis. But blaming subprime loans and foreclosures for provoking the crisis obscures the real cause: our nation’s lack of a plan to meet the housing needs of its residents.
Routine underfunding of the U.S. Department of Housing and Urban Development is another visible example of this lack of a plan. HUD’s current $2 billion shortfall means the agency will not have enough money to maintain its supply of subsidized housing.
In the private market, the gap between the nation’s housing availability and the public’s housing needs has widened. For example, the conversion of affordable rental housing into unaffordable condominiums has displaced thousands of renters and increased property taxes.
Unfortunately none of the presidential candidates has acknowledged the increasing unaffordability of America’s housing. In 2005, according to a study by the Joint Center for Housing Studies, more than 37.3 million U.S. households paid more than 30 percent of their income for housing.
These high housing costs lead to an estimated three-quarters of a million people being homeless every night; about half of them are children.
With this nation’s wealth and resources, should we not aspire to a goal of ensuring that everyone has decent, accessible and affordable housing?
Housing is far too important to the health and well-being of the nation to be left exclusively to the whims of the market. Government leadership is needed to develop a multifaceted housing plan that balances home ownership and the development and preservation of rental housing.
A sound housing policy would do the following:
*Increase the supply of rental housing, which provides homes to many low- and moderate-income households, through increased incentives such as property tax reductions; expand the nonprofit housing sector, which develops and manages affordable housing, keeps costs down and maintains long-term affordability
*Increase oversight of lending practices with limits on exploitative subprime loans.
