Today’s affordability gap: Part 2, what
[Continued from yesterday’s Part 1.]
Yesterday’s post examined Michael Grunwald’s Washington Post essay on the silent crisis in housing affordability that is moving in to the nation’s middle and upper-middle income neighborhoods, to say nothing of what it is doing to those at the lower end of the scale:
Today, for every one of the 4.5 million low-income families that receive federal housing assistance, there are three eligible families without it.
Only Dorothy gets the subsidy; the others miss out
The result of housing 1 in 4 of those whose income we deem worthy is that 3 in 4 must fend for themselves:
Egan, man of many hats and qualities
It sounds odd, but the victims of today’s housing crisis are not people living in “the projects,” but people who aren’t even that lucky. Some liberals dream of extending subsidies to all eligible low-income families, but that $100 billion-a-year solution was unrealistic even before the budget deficit ballooned again.
Whether it was or not, when Congress enacted its hundred-billion-plus deficit-bumpers — the tax cuts and the Medicare prescription drug benefit — without touching housing, our short-term financial fate was sealed:
So even some housing advocates now support time limits on most federal rent aid. The time limits included in welfare reform 10 years ago were controversial, but studies suggest they’ve helped motivate recipients to get off the dole. And unlike welfare, housing aid is not a federal entitlement, so taking it away from one family after a few years would provide a break for an equally deserving family.
“It’s a no-brainer,” says David Smith, an affordable-housing advocate in Boston. “You can’t sustain the internal contradiction of no limits [for families].”
Point of clarification regarding the internal contradiction between welfare and housing policy. If you time-limit welfare, which is an entitlement, then it is intellectually contradictory not to time-limit housing assistance, which is not an entitlement and is de facto rationed.
It’s just an internal contradiction
I say this for two reasons:
· Intellectual consistency. Both housing and welfare are income supplements designed to create stable family environments and enable people to work themselves to self-sufficiency. If time limits are an integral element of one form of assistance, especially one that is available to all who qualify, how are they unjustifiable for another, one too scarce to go around?
· Transferring the mandate. Imagine a welfare recipient who does not currently receive housing assistance. As the welfare benefits run out, does he or she not become a priority applicant for housing? Doesn’t that shift what should be a Labor/HHS mandate to HUD?
Back to Grunwald:
Smith and many local housing officials also think that the strict income limits for most federal housing aid serve as employment disincentives, while concentrating poor children in projects without working role models. Rents are usually set at 30% of income, so the lowest-income families pay virtually nothing, and as Smith points out, “it’s economic suicide for them to get a job.”
The poverty trap is real. Although our trap is less severe than Britain’s, every time I do the math it comes up negative.
Start with a single-parent, on welfare, with several children, receiving Section 8. Calculate her rent contribution and her net take-home. Then assume she gets a job: pay for day care, cancel the welfare assistance, take out her W-2 payroll deductions, and boost her rent by 30% of the gross. You will find that the minimum hourly wage she needs to make, just to match her previous take-home, is $10-14 — more than she’s likely to earn in her first job.
As impossible as Seagal acting
(By the way, that’s not an argument for raising the minimum wage; the job-breakeven levels are much higher. And because markets are reactive, pumping more housing earning power into the system would lead swiftly to higher rent. In fact, the housing-assistance poverty trap is even worse in
But the vast gap between the number of low-income families eligible for subsidies and the number served suggests that tinkering with the current system would not come close to solving the crisis.
It will take more than tinkering. If we’re going to time-limit assistance for needy families, then we must at the same time make it possible for them to succeed.
That means aggressive commitments to offer a hand up — actually, many different hands up — such as:
· Job training, and job placement
· English literacy
· Day care, preferably on-site at the apartments or close thereto
· Family planning and birth control
All that is a story for another day, however. Back to Grunwald:
And the problems extend well beyond low-income families, which is why communities such as
The root of the problem is the striking mismatch between the demand for and the supply of affordable housing — or, more accurately, affordable housing near jobs. Fifteen million families now spend at least half their income on housing, according to Harvard’s Joint Center for Housing Studies; many skimp on health care, child care and food to do so.
Others reduce their rents by overcrowding, which studies link to higher crime rates, poorer academic performance and poorer health;
When local housing is too expensive, one’s choices are:
1. Pay too much
2. Consume less than one should
3. Live somewhere cheaper, very far from one’s job
Those are the only three choices.
Which door do you pick?
Other workers are enduring increasingly long commutes from less expensive communities, a phenomenon known as “driving to qualify.” In the past five years, 88,000 Fairfax County families have moved elsewhere in the region, according to a George Mason University study; when Fairfax housing officials gave me a tour recently, they told me many of their employees now drive a full hour from Warrenton in Fauquier County. The media officer interjected that she drives nearly two hours each way from
This creates all kinds of lousy outcomes — children who don’t get to see their parents, workers who can’t make ends meet when gas prices soar, exurban sprawl, roads clogged with long-distance commuters emitting greenhouse gases. “I don’t think we’re creating strong communities by forcing people into their cars four hours a day,” says Cathy Hudgins, chairwoman of the housing committee for the Fairfax County Board of Supervisors. Affordable housing also helps make communities competitive; it’s not clear how
Moderate-income families aren’t able to buy Lamborghinis or Armani, but they can buy cars and clothes. So while it’s obvious why they can’t afford McMansions, it’s not so obvious why they can’t afford decent housing. They demand it. Shouldn’t the market supply it?
Can we leave it to market supply and demand?
[Continued tomorrow in Part 3.]
