US Housing Policy

Overview of America's Housing Crisis and Proposed Solutions

• A bold federal program for social housing construction is crucial to alleviate America's housing affordability crisis.
• The program aims to develop millions of new affordable housing units in opportunity-rich neighborhoods.
• 21.8 million households in the U.S. spend at least 30% of their monthly income on rent, highlighting a persistent housing affordability issue.
• Among these, 11.2 million households allocate at least 50% of their income to rent, facing a severe cost burden.
• Approximately 48% of the 45 million households that rent are considered cost-burdened due to high rental expenses.
• The high costs of healthcare and education have led to increased student debt, cutting into funds available for housing.
• The search for affordable housing frequently results in renters residing far from their workplaces, often in substandard housing.
• Economic insecurity can lead to frequent relocations, which disrupts children's education and hinders building social communities.
• As early as the late 19th century, the squalor in urban tenements, such as those on New York's Lower East Side, alarmed social reformers.
• Initial attempts by state legislatures and city officials to regulate rental housing through minimum standards proved ineffective.
• Philanthropists and reformers experimented with different building designs to improve living conditions, leading to the concept of "philanthropy plus five percent".
• While these efforts resulted in better housing, the units were still unaffordable for families living in poverty.
• Reformers faced a market failure where the market could not meet societal housing needs, regardless of potential investor returns.
• The Great Depression caused mass unemployment and homelessness, giving rise to makeshift encampments known as "Hoovervilles".
• The housing debate in Washington centered on whether housing should be a right ensured by government or a matter for the private market only.
• A compromise was reached that favored private market actors, with the federal government subsidizing low-income rental construction managed by PHAs.
• The federal government also became involved in structuring housing finance, supporting entities like Fannie Mae and Freddie Mac.
• This policy approach led to a 66% homeownership rate in the U.S.
• The current affordability crisis affects not only those in poverty but also millions of households with stable, moderate-wage employment.
• These households earn too much for traditional public housing but not enough for adequate private housing.
• A new federal social housing program is suggested to address this issue, with a $50 billion investment over five years, to construct hundreds of thousands of affordable rental units.
• HUD would offer grants and low-cost financing through the HOME Investment Partnerships Program.
• The constructed units would be transferred to local PHAs or nonprofits to operate, relying on rental payments for sustainability, unlike traditional public housing that depends on ongoing subsidies.
• The Center for American Progress proposes that Congress allocate $50 billion over five years to address the growing deferred maintenance backlog in existing public housing.
• It also suggests Congress provide $25 billion over five years to expand the supply of public housing units for extremely low-income households.
• An additional $25 billion over five years should be used to expand the Housing Choice Voucher (HCV) program for immediate housing support.
• Collectively, this $150 billion proposal aims to provide lasting benefits to working Americans facing a severe housing crisis.
• This program has the potential to boost macroeconomic growth by enabling people to move to areas with economic opportunity.
• The U.S. housing system is divided between politically influential homeowners who benefit from federal programs and a stigmatized class of low-income renters in public housing.
• The intention is to address this imbalance and ensure access to safe and healthy housing for all Americans.
• Social housing would break this long-term trend and promote a more equitable housing structure.
• The Roosevelt Administration initiated the nation's first public housing under the New Deal via the Public Works Administration.
• States were encouraged to form local PHAs to administer housing subsidies through the Housing Act of 1937 (Wagner-Steagall Housing Act).
• New Deal-era financial support produced the first public housing, though initially segregated by race.
• The Roosevelt Administration's National Housing Act of 1934 established the Federal Housing Administration (FHA) to provide mortgage insurance.
• The Federal National Mortgage Association (Fannie Mae) was created in 1938 to create a secondary mortgage market.
• Mortgages prior to federal intervention were short-term with large down payments and interest-only payments.
• Long-term fixed-rate mortgages became the norm post WWII due to stability and liquidity in the home market.
• There was political debate over the role of the federal government to help low income housing in the 1930's and 1940's.
• Post WWI, many Western European countries developed large social housing projects which sparked advocacy for affordable housing.
• The Housing Act of 1949 allocated $1 billion for urban redevelopment and slum clearance (urban renewal), impacting black communities and leading to building demolition.
• Moderate-income families' housing demands were unmet as noted by Congress in 1961.
• Project subsidies and private sector production to stimulate affairs housing came from Section 8 in The Housing Act of 1974.
• The Section 8 program was later reformed to offer vouchers directly to households.
• The LIHTC program was established in 1986 to provide tax credits for affordable real estate development.
• $13.5 billion that is spent on the LITC program each year from U.S. Treasury.
• From 1987 to 2022 roughly 53,000 projects have been made and or preserved that have affordable units.
• A 15 year requirement is to set affordable requirements in place.
• Around 324,000 LIHTC units would end their 15 year range from 2024-2029.
• There are a number of LIHTC units located in depressed areas.
• Median income from areas is not a factor in unit targeting during LIHTC time.

• 2.3 million rental leases are subsidized for around >32 billion/year with the HIV program.

• there are only about 1 of every 4 households with vouchers.
• Waiting lists for homes that are to be used with vouchers in 2012 was roughly 2.76 million families.
• Insufficent federal housings are mostly targeted towards private market actors.
• Insufficent federal investment in housing is especially skewed towards private market actors.
• $3.2 for funds has been appropriated to HUD in 2023 to provide grants to finance rehab and repair.
• Funds appropriation should annually be increased to $10 billion.
• By modernizing equipment it can create carbon.
• $25 billion should be appropriated by Congress to create traditional public housing unites and enhance HA programs.
• Social housing was basically a welfare state from the 1940's-1970's in Western Europe.
• Roughly 30% of social housing has accumulated in the netherlands.
• Low percentages accumulate in western Europe with a population of around 20%
• France has created over 4.5 million social housing units with 40% and 50% for the rest and renters in paris.
• A 1% percent payroll tax was done in France by roubaix-tourcoing.
• 0.45 percent payroll tax is now charged for salaries and wages.
• Firms with 50 or more workers use this tax.
• Paris uses "droits de pre and emption" or right of pre-emption.
• To split it Viennas social housing in now financed by non- profits and state funds plus 1% payroll tax.
• This creates around $250 million for the city to use.
• Recertification is not available for a signature on housing contracts.
• The netherlands is a strong sector of social housing with around two thirds worth of housing owned by woningcorporaties.
• Short term loans and a long amortization period of 40-50 years is available for units financed.
• AHOF- Affordable Housing Opportunity Fund leads national leaderships with support coming from Montgomery county.
• For rental properties and income the private sector offers adequate housing to use federal funds.
• Local PHA or nonprofits are made to establish rental and subsidy funds.
• The project costs can be covered for 5 years at $50 billion per year with HUD overseeing the PHA.
• PHA/Non profit's allow tenant associations without any interference and approves expenditures tied to capital reserve fund.
• From the great depression a new approach to housing was developed.
• Federal government must establish affordable housing for all citizens.

Explores the evolution of U.S. housing policy, from Fannie Mae's role in the mortgage market to urban redevelopment programs. Examines the shift from pre-federal involvement mortgages to long-term, fixed-rate mortgages. Discusses the goals of advocates for social housing and the factors contributing to homeownership growth after World War II.