Money is Policy JRT Housing-Money 4-26lores | Page 6

n For our nation’s lowest-income families,
For our nation’s
lowest-income
families, the lack
dropping to a 50-year low in the second
the lack of affordable and available rental quarter of 2016. The homeownership
homes has reached crisis levels (See rates for younger households, a traditional
Figure B). The supply of affordable rental source of strength for the housing market,
homes is also woefully inadequate to have also registered precipitous declines
meet the explosion of new demand that (See Figure C). 4 Due to increased land and
is just around the corner. construction costs, market-rate apartment
n Following the collapse of the homeowner-
of affordable ship market, mortgage credit conditions
and available loan debt is at all-time high. Rising rents
developers are unable to reach people with
incomes less than the area median.
have tightened considerably. Student
rental homes has are consuming ever-growing portions of
reached crisis of families to save. These factors, com-
household budgets, diminishing the ability
bined with more than a decade of income
levels.
and wage stagnation, have put homeown-
ership out of reach for large segments
of the U.S. population who are unable to
meet current underwriting standards and
accumulate sufficient funds for a mortgage
down payment. The national homeowner-
ship rate now stands at 63.7 percent after
F i gure B
At a time when housing is in such dire
shape, it is incumbent upon us to take stock
of the current situation. A key part of this
assessment must be examining how federal
housing dollars are spent. After all, where
the federal government puts its limited
resources tells us a lot about what our
current housing priorities are.
Low-Income Renters Far Outnumber the
Supply of Affordable and Available Units
Millions
20
15
10
5
0
Affordable/
Extremely Low-income
Available Units
Renters
Very Low-income
Renters
Affordable/
Available Units
Source: Adapted from Joint Center for Housing Studies of Harvard University, The
State of the Nation’s Housing 2016 (2016), Figure 29. Notes: Extremely (very) low-income
households earn no more than 30% (50%) of area median income. Affordable is
defined as housing costs of no more than 30% of household income on a unit size-
adjusted basis.
6
Access to safe and affordable housing has
long been recognized as a critical part of
America’s social compact with its citizens. In
1949, Congress set forth as a national goal
the “realization as soon as feasible” that every
American family should have a “decent home
and suitable living environment.” 5 Over the
past several decades, the federal government
has devoted considerable resources and
energy to achieving this objective. Comprehen-
sive legislation has been enacted, programs
have been initiated, and money has been
spent. But, unfortunately, despite significant
federal efforts, achieving the goal of a well-
housed America is more elusive than ever.
But are these priorities the right ones? Are
we addressing the most urgent problems
and doing so in the most effective way pos-
sible? Is the limited pool of federal housing
funds benefiting those families who are
most in need of help? More specifically,
are these funds assisting renters who face
severe housing cost burdens? And are they
helping families who wish to secure the
benefits of homeownership by becoming
homeowners for the first time?
Money is Policy: How Federal Housing Dollars Are Spent