US poor hit by housing crunch

This is an aspect of the US housing crisis that does not seem to gain many headlines. There are billions upon billions of dollars available to wage war in Iraq and Afghanistan but precious few dollars to help poorer Americans to solve their housing problems.


'Lack of "opportunity"' rent:

McClatchy Washington Bureau

Posted on Fri, Jul. 13, 2007
Nation's poor hit by housing crunch
Tony Pugh | McClatchy Newspapers

last updated: July 13, 2007 07:35:20 AM

WASHINGTON — Growing numbers of the nation's poorest households are
using more than half their earnings for rent while waiting years for
federal housing assistance that may never come.

The phenomenon is largely playing out in urban and suburban locales,
but has exploded recently in rural areas as coveted rental assistance
becomes harder to get due to high demand and scant funding from
Congress.

The lack of affordable homes for poor families is the nation's No. 1
housing problem and undermines the stability and security of families
and communities nationwide.

A new report by the Department of Housing and Urban Development
describes the startling growth of the problem since 2003. It found
that 6 million impoverished households used most of their monthly
earnings for housing or lived in substandard conditions in 2005.
That's an increase of 16 percent, or 817,000 families, since 2003.

The number of rural families facing this dilemma grew by 51 percent to
nearly 1 million households over the same two-year span.

At the same time, these struggling households saw their average
monthly incomes decline while their average rent payments increased.

Despite the considerable squeeze and growing need for help, these 6
million families received no federal rent assistance from HUD. In
fact, federal housing assistance reaches only about one in four
income-eligible households.

There's simply not enough to go around, in part because for many years
the Bush administration and a compliant Congress have diverted money
from housing and other domestic programs to pay for tax cuts and the
war in Iraq and Afghanistan.

"There definitely has been a diminution of federal support for
low-income housing in recent years," said Nicolas Retsinas, director
of the Joint Center for Housing Studies at Harvard University.
"Clearly, it says there are other priorities, and this is not on the
short list."

The lack of assistance, soaring rents, slow wage growth and a
shrinking inventory of affordable apartments have made it nearly
impossible for millions of low-income renters to adequately house
their families.

"If you're not one of the lucky 25 percent to receive assistance,
you're very likely to have a very high rent burden or live in
substandard conditions or in overcrowded conditions," said Sunia
Zaterman, executive director of the Council of Large Public Housing
Authorities. "The demand for assistance goes significantly unmet."

In fact, a family with only one full-time minimum-wage earner can't
afford a standard two-bedroom apartment anywhere in the country, the
Harvard study found.

"We're reaching crisis dimensions in many communities," said former
HUD Secretary Henry Cisneros, who now chairs CityView, a Santa Monica,
Calif., company that helps finance and develop affordable housing.

"It's just unreasonable to expect that suddenly we're in an era where
50 percent of a family's budget can be spent on housing. I don't think
anyone who looks at the way families are living in America can justify
that, not even this administration."

Rosalinda Santana, 23, a single mother of two in East Hartford, Conn.,
lost her hotel housekeeping job after taking two weeks off to care for
her sick son because she couldn't afford a babysitter.

While she looks for work, she's putting the bulk of her $563 monthly
unemployment insurance check toward her $750 rent. Santana applied for
a slot in the "Section 8" Housing Choice Voucher program, the nation's
primary rent assistance program for low-income families. But she faces
a two- to three-year wait because program funding hasn't kept pace
with demand.

Santana's landlord has been patient about her unpaid rent, but she and
her children could end up back with relatives in New York City if she
doesn't find work soon.

"I would be in a 14-story building in the projects, in a small
cluttered two-bedroom apartment with my grandmother and five other
cousins," she said. "I left New York City to give my kids a better
life, and I don't want to go back to living in a crappy situation. I
feel like if there's help out there, I should be able to get it."

While some view housing assistance as welfare for the poor, the
nation's largest housing subsidy by far is the federal mortgage
interest tax deduction. It's projected to provide U.S. homeowners an
estimated $75.6 billion in tax breaks this year. Most of that relief
will go to higher-income families.

Voucher recipients, most of whom are elderly or disabled, pay 30
percent of their earnings for housing and utilities — an average of
$280 per month — while the government subsidizes the balance of
housing costs up to a specified amount.

But long waiting lists for the program are common nationwide. In
Washington, D.C., the waiting list tops 56,000 people. Miami housing
officials have reviewed applications from only 4,000 of the 40,000
people on its waiting list.

Philadelphia's waiting list stood at 30,000 when it was closed in
2000. Nearly seven years later, some 5,500 people are still waiting.

About 1.8 million families get rent assistance through the voucher
program, which is administered by local housing authorities.
Recipients' average household income is about $12,000.

But despite a growing need, Congress hasn't funded an expansion of
voucher recipients since 2002. And lawmakers underfunded the program
by $570 million in 2005, leaving vouchers used by roughly 80,000
families without funding.

The shortfalls and funding changes enacted since 2004 have resulted in
150,000 fewer families being in the program, experts say.

Utilization rates for vouchers have been declining in recent years, as
public housing agencies hold rather than issue unused vouchers because
of funding uncertainties.

"Many have tried to accumulate funding reserves rather than assist
more families in order to reduce the risk that they will be caught
short in the future," said Douglas Rice, a housing policy analyst with
the Center on Budget and Policy Priorities, a liberal think tank.

Making matters worse, Retsinas estimates that 200,000 affordable
apartments — in which tenants pay less than 30 percent of their
income
for housing and utilities — are lost in the U.S. each year.

For every new affordable housing unit constructed, two are demolished,
abandoned or become condominiums or expensive rentals, according to
the John D. and Catherine T. MacArthur Foundation.

Nearly 375,000 U.S. apartments have been converted to condominiums
since 2002, according to Real Capital Analytics, a New York real
estate consulting firm.

Other affordable apartments are lost when building owners opt out of a
HUD "Section 8" program that guarantees rent payments to owners who
lease to low-income tenants. More than 118,000 HUD-subsidized
apartments have been lost that way since 1997, 600 alone in Washington
since October.

When the owner of Dorothy Paul's HUD-subsidized townhouse in D.C.
decided in 2002 not to renew his subsidized-housing contract, Paul
tried to buy the home for $106,000, which was the fair market price at
the time. But the owner balked at the deal just as property values
took off throughout the city.

Five years later, Paul is still in litigation to enforce the original
sale agreement, but the home could now fetch well more than $400,000.
That's much more than Paul can afford.

The owner is trying to evict Paul so he can renovate and sell the
property in the open market. As her legal battle drags on, her rent
has soared to $1,200 a month, which eats up well over half of her
income as a hair stylist.

If evicted, Paul fears she'll be forced to leave the neighborhood and
city she loves.

"All I can do is keep fighting until they say it's over. I don't know
what else to do. I can't afford to stay in D.C. I just really believe
that I'll get justice," she said.

Federal funding for housing assistance reached 10.2 percent of
non-military discretionary spending in 1998, a 36-year high. But it
fell to 7.7 percent of federal spending last year, a 16-year-low.

House Democrats are moving to address the problem. On Thursday, the
House of Representatives was expected to consider legislation by Rep.
Maxine Waters, D-Calif., to revamp and increase funding for the
voucher program. The bill would add 100,000 families to the program
over five years.

And on July 19, the House Financial Services Committee will hold a
hearing on proposed legislation to create a national housing trust
fund to build, preserve and rehabilitate 1.5 million affordable
housing units over 10 years.

HUD Secretary Alphonso Jackson has called on cities and states to
loosen development and zoning restrictions that delay or block the
construction of affordable housing units. But housing advocates
generally give the Bush administration low marks for providing little
relief to struggling renter families.

While housing assistance accounts for just over 1 percent of the
federal budget, the voucher program consumes nearly half of HUD's
budget, up from 36 percent in 1998.

The Bush administration has tried for several years to eliminate and
replace the program with new initiatives.

HUD officials said the changes would contain costs and streamline the
program. Critics said the moves would cut program funding, jeopardize
tenant rights and increase their out-of-pocket costs. Congress never
implemented the changes.

HUD now wants to lift a longstanding cap on the number of families
that can be served in local voucher programs.

Doing so would free about $840 million in unspent voucher funds that
housing agencies accrued from funding changes and conservative
distribution and would allow more people to be served, said Orlando
Cabrera, HUD undersecretary for public and Indian housing. Rather than
increasing program funding, Cabrera favors giving housing authorities
more flexibility to tailor the program to their needs.

"Instead of trying to provide greater flexibility, the argument
invariably goes to 'Oh, gee, no, it's not enough (money).' Well, wait
a minute. It is enough. Let's look at these caps (on voucher
recipients). Let's give these housing agencies greater flexibility to
act," Cabrera said.

But the administration's 2008 budget proposal provides no inflation
adjustment even though the program relies on private market rents,
said Linda Couch, deputy director of the National Low Income Housing
Coalition.

The HUD proposal "deserves a serious look," said Rice of the Center on
Budget and Policy Priorities, but not until the program's funding
formula is changed and stabilized, giving struggling agencies a chance
to rebuild their programs.

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