Affordable Housing Solutions for Low-Income Families in the US

Introduction: The Scope of the Affordable Housing Crisis

This paper presents a research proposal aimed at determining what can be done to help low-income families obtain affordable and accessible housing. It presents the current issue, a literature review of the problem, a methodology section recommending a research method, and a conclusion.

Throughout the nation, America's poor are facing a serious affordable housing shortage. Not only are there too few housing units available for those below the poverty line, but the housing that does exist is often out of the price range of those who need it most.

"The affordable housing is the most urgent, only in the sense that the people who can afford less are way more vulnerable," said Jane Blumenfeld, Los Angeles city principal planner (Garcia, 2003). "If you make $100,000, even though there's a housing shortage, you can find an apartment. If you make $20,000, there are not many places that you can afford" (Garcia, 2003).

Many factors contribute to the problem, according to experts, including lack of land, lack of funding, and lack of public support. In the meantime, low-income and poverty-level families scramble to figure out where to go or how to live. The cost of failing to provide affordable, accessible housing to low-income families falls on taxpayers across the country — through shelter provision, lost educational opportunities for children, children entering publicly funded foster care when parents can no longer provide for them, and health costs for family members battling the elements without a stable place to live.

"Cities, starting with the city of Los Angeles, have an aversion to approving new housing on available parcels of land," said Bruce Karatz, chairman and chief executive of KB Home (Garcia, 2003). "They talk a good game, but when it comes down to it, they prefer development of commercial uses that will generate sales tax revenues rather than trying to solve the shortage of housing. And that's the fundamental problem" (Garcia, 2003).

One major obstacle to low-income housing is lack of public support. Most low-income housing sets a baseline of 30% of one's income as the rent, meaning that residents pay 30% of their income to live there. Neighbors often object to such housing alternatives being built in their area and insist that developers take their plans elsewhere. This leaves limited available land for housing units that are already not being built quickly enough or in large enough numbers to accommodate current need.

The cost of maintaining such housing is another consistently voiced concern. "Once you lower rents to 30% of income, what happens is that you barely get enough money to pay for the maintenance of the building," said Neelura Bell, program director for the Los Angeles office of Local Initiatives Support Corp., a group that helps builders of affordable housing secure financing (Garcia, 2003).

The need for affordable and accessible housing for low-income families across the nation is growing. San Francisco has an estimated 14,000 people living on the streets because of the lack of affordable or accessible housing. In addition, an estimated 21,000 families without affordable homes are staying with relatives or facing eviction as their rents go unpaid. That number can be multiplied throughout the nation's urban areas and rural pockets (Palm, 2005). This research proposal aims to target the low-income population and determine what it will take to help them secure affordable and accessible housing.

Background of the Problem

Affordable and accessible housing for people on low incomes is becoming a crisis. Land in America is becoming scarce, prices continue to rise, and low-income individuals find themselves increasingly unable to purchase or even rent affordable housing.

Options are particularly limited for the rural elderly (Maher, 2000). Those with chronic disabilities need health care, personal care, and social services that often exceed the capacity of rural communities to provide, particularly for low-income seniors (Maher, 2000). Many are forced to relocate or are unnecessarily institutionalized in more restrictive and more costly nursing homes (Maher, 2000). State Medicaid programs lose millions of dollars as a result of paying for more advanced nursing home care before it is actually needed (Maher, 2000). This lack of non-institutional, long-term care services in many rural areas may explain why nursing home residents from rural areas tend to be younger and less disabled than their urban counterparts (Maher, 2000).

Families are another large population in need of affordable and accessible housing at the national level. The government supports and owns many public housing projects across America; however, the number of units available falls far short of the number needed. In addition, the cost of maintenance and upkeep is often not feasible, causing public housing projects to become run down and undesirable as places to live.

According to HUD (2006a, p. 26), in the third quarter of 2005, national homeownership rates for all households stood at 68.8%, while minority households were at 51.2%, revealing a nearly 18% gap. Rental vacancy rates were at 9.9% versus homeowner vacancy rates of nearly 2%, showing a significant shortfall of nearly 8% (HUD, 2006a, p. 26; Thornton, 2005). Median rent was $922, reflecting a 10% decline from the previous year (HUD, 2006a, p. 19; Thornton, 2005). In comparison, the 2006 Department of Housing and Urban Development's maximum fair market rent limits at the 60% level of county median income — which in Dane County, Wisconsin, was $988 for a two-bedroom unit (Wheda, 2005b; Thornton, 2005). Nationally, the apartment absorption rate was at 65%, a 27% decline from the previous year (HUD, 2006a, p. 19; Thornton, 2005). Conventional fixed-rate 30-year mortgages stood at 5.76%, a 2% decline from the prior year (HUD, 2006a, p. 21; Thornton, 2005). According to HUD (2002c), an average of approximately 1,300 Low Income Housing Tax Credit (LIHTC) projects and 90,000 units were placed in service each year during the 1995–2002 period. The national housing inventory tallied 108,431 occupied units placed in service in the third quarter of 2005: 74,588 owner-occupied and 33,843 renter-occupied, leaving 15,688 vacant units (HUD, 2006a, p. 25; Thornton, 2005). Affordable housing start-ups are lagging behind demand (Thornton, 2005).

Research consistently indicates a growing need for housing to accommodate the poor. Many single-parent women who head households are on welfare rolls; however, welfare grants or payments are not sufficient to afford rental housing for themselves and their children. Providing affordable and accessible housing in America will also help reduce the rate of homeless families (Thornton, 2005). "Fifty percent of women and children in the United States become homeless when they flee domestic violence, and many are turned away by overcrowded shelters and thereby forced to return to their abusers" (Thornton, 2005).

The provision of affordable and accessible housing will therefore help reduce domestic violence problems as well. Even those who currently hold Section 8 vouchers are often unable to find affordable housing because of discrimination. In addition, current market rents frequently exceed voucher limits, effectively shutting out many low-income families. Research has indicated that landlords often worry that Section 8 tenants will damage their property.

Tusan (1997) states that nationwide, 56% of poor renters spend at least 50% of their income on housing (p. 26). Tusan (1997) asserts that "it would be unrealistic to assume that the job market can absorb all homeless and extremely poor individuals at a wage sufficient to meet current housing costs" (Thornton, 2005).

Tan (2000) reports that 64% of families receiving four or more types of assistance are single female high school dropouts with children under 18 (Thornton, 2005). These single mothers spent 70% of their assistance on housing, food, and clothing (Tan, 2000, p. 33). Hence, increasing the affordable housing stock is paramount (Thornton, 2005).

Methodology

There are many accepted methods of research available today. For each proposed study, possible methods are reviewed and selected based on their viability for the named study. When reviewing the various research methods, key elements examined include cost, feasibility, geographic boundaries, and time frames. While most accepted research methods have scientific validity, not all are appropriate for every study; it is therefore important to carefully select the method most suited to the current proposal.

For this research proposal, several possible methods were examined and discarded before settling on the structured interview and the questionnaire as the instruments for this study.