WASHINGTON, DC - If ever the nation needed to change public policy related to affordable housing production, it is now. Decent rental housing for workers with incomes in the bottom third of the economic pyramid has been in short supply for decades. Today, with tens of millions of families unable to afford homeownership, the need to increase rental housing supply is even more acute. Like infrastructure investment, renewed federal investment in affordable rental housing yields economic and environmental benefits, in addition to being socially equitable and providing dwellings for those with limited means.
Boosting the availability of affordable rental housing would help revive the construction and real estate industry, putting hundreds of thousands back to work designing, building and managing affordable dwellings. And it would stimulate the sales of construction materials and equipment, household appliances, and residential goods and furnishings.
Prudent rental housing investment can produce new, green buildings, as well as lead to the reuse, rehabilitation or expansion of existing properties, likewise part of the strategy for making America greener. And a revitalized national housing policy can exemplify "smart growth" principles by ensuring that federal funds are invested in housing served by infrastructure.
After World War II, building rental housing for the less affluent was considered akin to building infrastructure. Many thought access to decent, affordable shelter was a fundamental right, a matter of national policy and commitment to America's workers. Establishing the Department of Housing and Urban Development in 1965 underscored that commitment.
Starting more than half a century ago, Congress enacted federal subsidy programs to spur production and help low-income housing tenants. Until 1981, tens of thousands of new, below-market-rate units were built annually, thanks to these programs.
With low-interest loans and grants, mortgage insurance and rent subsidies, state and local government housing agencies, nonprofit sponsors and private developers eagerly undertook projects. Although some were poorly conceived and badly managed, many were successful. Unfortunately, the public heard much more about unsuccessful housing efforts than successful ones.
The national mood changed abruptly with the 1980 election of President Ronald Reagan, whose agenda included pulling the federal government substantially out of housing subsidies. Federal housing policies and programs of the 1950s, '60s and '70s were phased out. As funding was eliminated, HUD's very existence was questioned.
For the past quarter-century, the federal government's role in producing affordable housing has been marginal. It doles out housing rental vouchers to a small percentage of needy families. It offers tax credits to private individuals and partnerships willing to invest in housing for low-income residents. And HUD's "Hope VI" program, adopted in 1992, succeeded in helping a few public housing authorities rebuild their most severely distressed projects.
Yet regrettably, none of these activities significantly increased affordable housing supply. In fact, the inventory of affordable housing has been steadily shrinking. Favorable market conditions and the end of financial subsidy contracts enabled owners of well-located projects to convert subsidized, low-income housing units to market-rate condominium or rental apartments.
Of course, there is a long-standing national policy generating an enormous housing subsidy: the tax deduction for home mortgage interest. It promotes homeownership and saves homeowners money, but it does nothing for renters. Let's now do something for renters as well as for the country. Revive the economy by investing in infrastructure, but also revive the nation's commitment to producing sustainable rental housing that families can afford.
Source: WashingtonPost.com