SAVI Reports - Page 15

It may also go to replacing critical systems in existing low-income housing. It can even go to tenant-based rental assistance or down payment assistance, in which individual low-income families use it to offset the cost of their rent or down payment on a home. Interdependence Between Affordable and Subsidized Housing Subsidized housing is meant to correct for market inefficiencies in the housing market. For individuals, it helps address the gap between their income and a fair market rent; for neighborhoods, it can counter the effects of disinvestment to revive a functioning market. Nevertheless, subsidized housing has shortcomings as a policy tool. The goals of individual assistance and neighborhood revitalization can work at cross-purposes. If the goal is to provide families with safe, decent, and affordable housing, at best those resources will be focused on where individual families choose to live and have little concentrated impact on any given neighborhood. At the same time, resources invested in creating a robust housing market could result in the displacement of other families if rents accelerate past an individual family’s ability to pay (a process commonly referred to as gentrification). 7 Because these tools are tied to national politics and the national economy, they can be subject to cuts by Congress, often at a time when they may be most needed. During recessions, when people are most likely in need of housing assistance and 7 local governments are most likely in need of financial support, Congress may be motivated to reduce spending on these programs to reduce its deficit. From the perspective of generally addressing affordability issues within regions, housing subsidies are simply inadequate to widely impacting the regional housing market. There is not, and is unlikely to ever be, enough housing subsidy to make meaningful amounts of affordable housing available to all low- and moderate-income families. Even if there were enough subsidies to achieve that goal, there may be powerful reasons not to do so. A considerable amount of wealth in a region is reflected in real estate. Reducing the value of residential real estate throughout the area would substantially reduce its wealth (as households’ most valuable assets erode), and a majority of homeowners would have mortgages for homes that were suddenly worth less than the amount they owed. While housing subsidies are not a useful tool for broadly addressing supply or demand issues in a way that impacts a region’s affordability, subsidies may make a In existing research, there is no commonly recognized definition or threshold for gentrification, and there is disagreement about h ܁єՔɥѥ̸((((