The National Catholic Review
The Editors
As the search for housing by poor people grows more desperate year by year, the phrase lack of affordable housing has assumed a mantra-like quality. The title of a recent report by the National Low Income Housing Coalition, Out of Reach, in itself tells the story: the cost of rental housing is indeed beyond the reach of the majority of low-income wage earners. In only four counties in the nation, the report states, can workers who earn the federal minimum wage afford the cost of rent and utilities for a modest one-bedroom apartment.

Approximately six million low-wage earners now pay 50 percent or more of their income for rent. Federal affordability guidelines set 30 percent of a household’s income as the maximum it should pay for housing costs. To pay more requires cutting back on other necessities. Joblessness, low salaries and other problems related to poverty can easily topple individuals and families into homelessness. The present levels of homelessness are described in another recent report, the U.S. Conference of Mayors’ Status Report on Hunger and Homelessness, a 27-city survey released annually in December. Many homeless people are turned away even from shelters because of a lack of space.

The mayors’ survey also notes that among the most prominent causes of homelessness are mental illness and substance abuse, both made worse by a lack of needed services. Budget cuts stand out as a primary culprit for the shortage of help for mentally ill and addicted homeless people; now, with states facing rollbacks in Medicaid coverage, the situation is likely to worsen. Several of the cities, moreover, listed prisoner re-entry as a primary cause of homelessness. Former offenders return to their communities only to encounter legal barriers that block access to affordable housing.

The mayors’ report also comments on growing requests by low-income families for assisted housing. Aggravating shortages in this area is the current shortfall of Section 8 housing vouchers, which help low-income families find housing in the private rental market. For many, moving into such housing has been the first step out of poverty. Yet there are too few vouchers to meet the need: only about one-fourth of eligible families receive assistance.

Now the Section 8 program faces significant funding reductions. Douglas Rice, director of housing and community development policy for Catholic Charities USA, told America that with Congress under pressure to reduce federal spending in both discretionary and entitlement programs because of the burgeoning budget deficit, the Section 8 program faces not only funding cuts but also measures that could limit its focus on the neediest renters. Among these is the possible elimination of voucher rules that give priority to extremely low-income households and those with incomes below the poverty line. We expect that to be part of this year’s budget proposal, Dr. Rice said, and yet all the data show that the most significant affordable housing needs exist among these extremely low-income householdsthose with incomes below 30 percent of the area median income.

In a nation as rich as ours, it shocks the conscience that homelessness is increasing and that the supply of subsidized housing is falling further below the level of need. A Harvard study has shown that there is a gap of four-and-a-half million units between the number of affordable housing units available and the number needed for low-income households. The production of new affordable units for very low-income households is sorely needed.

And yet, contrary to popular perception, most government housing subsidies go to the highest income households, not to the lowest. According to the White House’s Office of Management and Budget, for example, one federal subsidy for homeownersthe mortgage interest deductionwill cost the federal treasury almost $70 billion in 2005. That is twice the cost of the entire annual budget for affordable housing programs administered by the Department of Housing and Urban Development. This balance should be shifted in favor of the neediest households. But the president’s proposed budget goes in the opposite direction. According to the National Low Income Housing Coalition, housing for people with disabilities is to be cut in half, and substantial cuts in public housing and housing for persons with AIDS are also mandated. As President Bush begins his second term, he should focus more of his conservative compassion on the needs of the most vulnerablethe homeless and those for whom housing assistance is essential if they are to progress toward self-sufficiency.

Comments

Robert E. McNulty | 3/7/2005 - 7:33pm
I think you may have to find another way to finance affordable housing rather than the interest paid by home owners. The inflated $70 billion you cite as a "subsidy" is not net. The lending institutions and individuals who receive the interest pay taxes thereon.

Have you considered how such deductions could be eliminated if for some reason they should. If you did it now, millions of people would find they could not afford their homes. The real estate business would be a catastrophe, the building industry wiped out and household suppliers decimated. You would, I fear, have a revolution on your hands.

Can you imagine a way to eliminate such deductions even over time? Why stop their, wipe out the auto industry too be eliminating that interest deduction.

Michael McGreevy | 2/16/2007 - 1:20pm
Regarding your editorial, “More Homeless, Less Housing” (2/28): Notwithstanding the need for more affordable housing, and with due appreciation for your heartfelt exposé of the needs of the homeless, I find your description of the deduction for mortgage interest as a “housing subsidy” for the highest income households to be, quite frankly, stupid.

I chose the latter word purposefully. Your willful ignorance of economic matters is apparent for all to see. Seek thee a monastery; public life is too complex for you to grasp.

Robert E. McNulty | 3/7/2005 - 7:33pm
I think you may have to find another way to finance affordable housing rather than the interest paid by home owners. The inflated $70 billion you cite as a "subsidy" is not net. The lending institutions and individuals who receive the interest pay taxes thereon.

Have you considered how such deductions could be eliminated if for some reason they should. If you did it now, millions of people would find they could not afford their homes. The real estate business would be a catastrophe, the building industry wiped out and household suppliers decimated. You would, I fear, have a revolution on your hands.

Can you imagine a way to eliminate such deductions even over time? Why stop their, wipe out the auto industry too be eliminating that interest deduction.

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