Housing is back in the political limelight

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http://www.tallahassee.com/mld/democrat/news/opinion/3595824.htm

Sun, Jul. 07, 2002

Housing is back in the political limelight

By Neal Peirce

WASHINGTON POST

A cascade of new polls and housing surveys underscores the point - local,

state and federal governments are about to come under much greater pressure

to help people find affordable homes.

Housing, for example, now trumps every other issue for working class

families in the country's larger metro areas, according to a survey by

pollsters Hart and Teeter for the Fannie Mae Foundation.

Forty-one percent of such families (with total incomes up to $54,000 a year)

identified lack of affordable housing for low- and moderate-income families

as a big problem.

Checking a sampling of all Americans, the Hart-Teeter poll found 65 percent

believe local government should be helping to make housing affordable, while

59 percent endorse federal action.

For decades, it seemed otherwise: Once the housing needs of World War II

vets were taken care of and a modest number of government housing subsidy

programs for the poor got enacted, the great American middle class lost

interest in the issue. Scandals associated with Department of Housing and

Urban Development-run programs gave the whole idea of subsidized housing a

bad aroma.

Anyway, who could arouse a middle class pampered by federally supported

mortgage guarantee programs, plus the generous, politically sacrosanct home

mortgage interest deduction on personal taxes?

But now conditions are shifting decisively. Rentals and the prices of homes

now cost so much while the production of affordable housing units lags so

badly that more and more Americans worry deeply about getting a roof over

their heads.

The bipartisan, congressionally chartered Millennial Housing Commission

recently confirmed that Americans - in general - are among the best-housed

people on earth. Homeownership stands at a historic high of 67.8 percent.

But the commission pinpointed deeply troubling signs. Working full-time no

longer guarantees access to decent housing. About 28 million Americans spend

more than 30 percent of their income on housing. Homeownership for blacks

and Hispanics lags 27 percent behind the national average.

In late June, Harvard's Joint Center for Housing Studies confirmed and

amplified the best-and-worst-of-times picture. With " rock-solid home prices

and historically low interest rates, " housing last year helped the U.S.

economy start a quick recovery from recession and the impact of Sept. 11. In

fact, inflation-rate-adjusted home prices soared 5.7 percent in a single

year, continuing a seven-year surge.

All that's great for people who own houses. But it's bad news for virtually

everyone else - especially low-income Americans. Housing is our biggest

lifetime expense, but Americans' incomes are dividing wildly. Average yearly

income of the lowest-paid 20 percent of us is now $10,500, accounting for 4

percent of all money earned in the country.

Meanwhile, the average income of the top 20 percent of households has risen

to $145,600. Those families get 55 percent of all the country's household

income. The wealthiest are overwhelmingly white and over 55 - many with

comfortably paid-off mortgages.

Look ahead and prospects for housing affordability seem even dimmer.

Hispanics, blacks and other minorities - precisely the groups so

hard-pressed to afford housing now - are expected to account for almost

two-thirds of the projected 23 percent in American households in the next 20

years.

And, notes Harvard's Joint Center, we're dividing geographically too.

Mobile, white-collar whites are leaving older cities and suburbs in

significant numbers, spearheading movement into rural and small-city areas

where new technology and manufacturing firms are setting up shop.

That leaves millions of struggling, lower-income whites behind even as

minorities, with natural increases and immigration, now account for an

absolute majority in 48 of America's 100 largest cities.

Result: Notwithstanding revival in many inner cities, urban America is

getting a predominance of housing-deprived families. Rack up another evil,

if you will, to " sprawl " development.

Even if we could somehow justify sprawl as an inevitable American

phenomenon, we know the American Dream is in peril of turning sour when

growing millions of us can't afford decent shelter - even with a full-time

job. Or if they own a home, face defaults and foreclosures for lack of

ability to pay.

Increasingly, that suggests political constituencies to be tapped: would-be

homebuyers, employers who can't find classes of workers who live within

reasonable commuting range and millions of us concerned the that American

promise of opportunity for everyone is dissolving.

Localities will have to require and deliver much better housing mixes.

States and the federal government will have to subsidize more. It sounds

expensive, and difficult.

But if the pollsters are right, this is an American crisis whose solution

can't be postponed much longer.

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Neal Peirce's e-mail address is nrp@....