These days, it seems like everybody’s talking about housing. That should be good news for advocates working to focus the federal government and the media on how to remake the crazy quilt that passes for a national housing policy.
But the sheer volume of talk about “stabilizing sagging markets” is no substitute for sustained examination of what ails the housing landscape. The housing bust drawing all the attention obscures the chronic crisis that has worsened during the Bush years and forms the subtext for the grievous injuries inflicted by predatory lending: the shortage of affordable rental housing.
Thanks to the world of pain flowing to Wall Street and international markets from the subprime meltdown, hardly a day passes without housing-related stories making headlines. Google “economy” and “housing,” and you get thousands of articles reporting the toxic effects of the U.S. mortgage mess on corporate titans, banking institutions, big and small investors, retailers, and, of course, new and existing housing sales.
There’s a whirl of rescue activity afoot in Washington. As Thanksgiving recess approached, Congress was readying a spate of legislation aimed at protecting borrowers from predatory-lending practices, regulating mortgage brokers, and modernizing the Federal Housing Administration to allow more holders of subprime loans to refinance with government-insured loans. The Federal Deposit Insurance Corporation has proposed a plan to prevent future mortgage defaults by freezing introductory rates on adjustable-rate loans for borrowers who live in the home and have not yet become delinquent on their payments. And lately, some pundits are predicting that housing will be a front-burner issue in a presidential election campaign that until recently was thought to be defined by the Iraq war.
In the shadows beyond the media and political spotlight are the one in three U.S. households — approximately 37 million — that live in rentals. The consequences of this peripheral vision problem are dire: The stock of decent, affordable private rental housing is shrinking and the cost of rentals relative to the earnings of low- and moderate-income households has soared. According to Harvard University’s Joint Center for Housing Studies, almost nine million low- and moderate-income renter households spent more than half their earnings on housing in 2005. Couple these alarming trend lines with the increased demand for rentals from homeowners defaulting on their mortgages, and it’s evident that focus on one part of the housing picture alone will never produce a coherent approach to ending Americans’ social and economic insecurities.
Creative solutions on affordable housing aren’t flowing from Washington officialdom. The passing of the Bush administration may bring new policy priorities. But housing advocates and their partners in the private sector and the philanthropic world can’t wait for a new occupant in the White House to make change—they must drive it.
Spurred by that perspective, the MacArthur Foundation recently put an additional $150 million toward the target of preserving and improving at least 300,000 units of affordable rental housing. The initiative includes $35 million in awards to 10 states and localities for innovative public-sector preservation initiatives, to be selected in a national competition, as well as more funds for low-cost loans to housing organizations engaged in affordable rental acquisition, renovation, and preservation.
By making the full scope of the rental crisis visible in the national consciousness, as well as turning communities around the country into laboratories for solving the problems, MacArthur hopes to catalyze “widespread and systematic policy reforms that make preserving affordable rental housing much easier, faster, and less costly to do.” The ultimate goal is to bring the loss of affordable rentals to zero.
If our policymakers had this zero-tolerance view — instead of the zero-sum mentality that expects a loser for every winner — the national focus might begin to shift toward realizing social and economic equity for all.
Forty years ago, Sen. Robert F. Kennedy spearheaded legislation to create the nation’s first community development corporation, Bedford-Stuyvesant Restoration in Brooklyn, N.Y. This issue of Shelterforce marks that milestone by examining the CDC movement at 40, exploring its changes, challenges, and innovations.