“Radical” Ideas for Reformulating U.S. Affordable Housing Policies

Summer, 2011; Source: Shelterforce | All nonprofits concerned about housing and community development should be aware of Shelterforce magazine. It basically functions as the journal of record for the nonprofit CDC sector. (Disclosure: I have written for Shelterforce off and on, and several years ago, was on its editorial committee.) The latest issue offers six “radical” ideas for shaping housing policy, some of which ought to spur debate not just on their own merits, but for what nonprofits could and should be able to do with these recommendations.

Perhaps the most important “radical” proposal comes from Alan Mallach. His article takes on American housing policies that “have focused disproportionately on…using public funds to create a housing stock of units dedicated to lower income occupancy, separate from the private market.” But most lower income people live in private market housing, so this policy, while providing some good housing “for a small percentage of America’s low-income families…does nothing for the rest, while the effect of that housing on their neighborhoods is uneven and often problematic. We have created an affordable housing lottery that benefits only a handful of eligible households—many of whom could find decent housing in the private market without public help.”

His interesting point is that public-sector subsidies for lower-income homeownership end up going “to families who would have become homeowners anyway, while much of the rest goes to poor candidates for homeownership. . . . Few net stable new homeowners are created.” As an alternative, Mallach recommends building a “robust system” of counseling and education services to help people become homeowners, make home improvements and repairs, and provide assistance to families at risk of losing their homes.

“The more we do that,” Mallach says, “the greater the benefits—social as well as financial—for all lower income homeowners, not just the select few who win the public money lottery.”

Mallach questions why low-income housing tax credits, the major source for building new rental housing, are allocated state-by-state according to population rather than targeted to the areas where new rental developments will help rather than harm the local housing market. In addition, he calls for more assistance to “mom and pop” landlords who own one- to four-unit properties that could be upgraded for much less cost than building new rental apartments.

Mallach’s ideas as well as those of the other contributors to this issue of Shelterforce merit debate in the nonprofit sector regarding the place of nonprofits might in a radical reconceptualization of U.S. housing policy.—Rick Cohen