Ignoring our Urban Housing Needs
In the aftermath of the foreclosure crisis, the federal government has focused on stabilizing the housing market by assisting homeowners that are facing foreclosure. On The New Yorker's financial page, James Surowiecki explains that the Obama administration has not been very successful in its attempts. Comparing the administration's approach with that of Congress, Surowiecki writes:
"The Obama Administration has done better, rolling out a seventy-five-billion-dollar mortgage-modification program, which offers mortgage servicers financial incentives to renegotiate loans. So far, it's managed a couple of hundred thousand mortgages, but that's been dwarfed by the rising number of foreclosures."
It is encouraging that the Obama administration is making these efforts. The foreclosure crisis is not just harming those who have lost or are in the process of losing their home, but also entire neighborhoods and communities that are experiencing declining property values because of the number of foreclosed properties in the vicinity. As this op-ed in the New York Times argues, we should not "blame the victim" of the housing crash.
But what is also needed is a revamped effort by the federal government to assist those who rent their homes and are also finding it more difficult to pay for basic necessities. In the top ten largest U.S. cities, more than fifty percent of households are renters. Renters in these cities are faced with crushingly high rent burdens. In New York, the private rental market is hurting those families that have seen rents continually rise while paychecks have shrunk. As a result, over 500,000 New York City families pay more than half of their household income in rent.
The federal programs targeted at renters are insufficient. In many cities, waiting lists for Section 8 rental vouchers are half a decade long. At the same time, HUD is distributing grants to local governments to demolish public housing to make way for developments that have fewer units than the previously existing public housing projects. Additionally, federal programs related to rental housing focus almost exclusively on the very low-income end of the rental market. But middle-class renters in cities are also hurting. And while federal policy currently goes out of its way to assist middle-income homeowners and aspiring homeowners, it does practically nothing to help those who currently rent.
Rental housing is mostly an urban issue. The Obama administration has pledged to examine all areas of federal policy that affect urban areas to see if the current policies are effective or if they are actually harming cities. While efforts to expand homeownership certainly have their place in our federal housing policy, efforts to assist renters have so far been the missing link. After all, when a family can barely cover rent and keep food on the table, how are they meant to save enough money for a down payment for a home?