July 10, 2008

Affordable Housing Isn't Cheap

But It's Important.

by Ed Lazere, DC Fiscal Policy Institute Executive Director.

In the race to build new affordable housing faster than it disappears from the private market, it’s hard to stay even, let alone get ahead. The challenges are many, starting with the huge gap between incomes and housing costs in DC. A family earning $20,000 can afford only $500 in rent, according to HUD standards. Where in DC can you find housing so cheap? Considering that lots of residents don’t even earn this much, it’s no surprise that more than 40,000 low-income DC households spend half or more of their income on rent.

DC’s economic turnaround has only fueled the housing crisis. The growing popularity and gentrification of many DC neighborhoods has pushed housing prices higher and higher, creating a dwindling pool of housing affordable to the poor.

Add to that the fact that housing is the area where federal help is most limited, and you’ve got a big problem. Just one-fourth of eligible households nationally get federal housing aid.

The District is doing a lot to support affordable housing, but it’s not enough. Monies flowing into DC’s housing trust fund are falling (because deed taxes that are dedicated to it are declining). This means the trust fund cannot do enough to help tenants purchase their buildings or to help non-profit housing developers build new housing.

Also, the city’s 2006 housing task force called for 15,000 new rent subsidies over 15 years — which can help very low income households find decent housing. That requires about $12 million every year in new housing funding, but the 2009 budget has only $2 million to expand the Local Rent Supplement Program. This has forced some would-be projects to be moth-balled.

Helping families earn more — through better job training and other means — can do a lot to make housing more in reach. But that alone is not enough; the working poor will always be with us.

In the end, fighting the private market forces that push housing prices up and make affordable housing disappear takes initiative — helping tenants buy their building rather than letting it go condo – and money. There is no cheap solution.

Ed Lazere is the Executive Director of the DC Fiscal Policy Institute, which conducts research on tax and budget issues that affect low- and moderate-income DC residents.

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