hud

This Is What “Effective” Looks Like at HUD?

Yesterday HUD Secretary Ben Carson tweeted that “The Low-Income Housing Tax Credit [LIHTC] is one of the most effective tools we have to create affordable housing.” And Secretary Carson’s presidential advisor published an op-ed yesterday which lauded LIHTC as a prime example of “the most effective and efficient use of the government’s resources.”

New Study on Low-Income Housing Subsidies

A new study at Downsizing Government looks at low-income housing aid. Howard Husock of the Manhattan Institute examines the history of federal aid and discusses problems with current policies, particularly rental subsidies and public housing.

One problem is that housing aid is costly to taxpayers. The federal government spent $30 billion on rental subsidies (Section 8 vouchers) and almost $6 billion on public housing in 2016.

Another problem is that housing aid and related rules are costly to urban communities. Howard argues that federal interventions undermine neighborhoods, encourage dependency, and create disincentives for long-term maintenance and improvements in housing.

Fair Housing or Federal Agency Running Riot?

In case you missed it, Ben Carson has been labeled as being “at odds with fair housing.” During his senate confirmation hearing last week, Carson was required to defend his position on Affirmatively Furthering Fair Housing (AFFH), the Department of Housing and Urban Development’s (HUD’s) controversial 100-page-plus contemporary interpretation of the Fair Housing Act.

Language Matters: Call It Low-Cost Housing

Housing affordability is an issue that’s been paid considerable attention over the previous two decades, but it doesn’t show signs of meaningful improvement. This even despite the almost $50 billion HUD spends in taxpayer dollars annually on solving the affordability crisis and related concerns.

So what gives? One likely culprit is the language we use to describe the problem.

Take the word “affordable.” Affordable housing – used in a public policy context – is a misnomer of sorts: affordability implies the ability to pay for something given your budget. But budgets vary considerably between households, and so the definition of affordability varies considerably, too.

There are only two – improbable – ways that any given housing could be affordable to the aggregate U.S. population. One option is that everyone’s incomes are identical. Another option is that housing is altogether free.

The Most Racist Urban Area in America?

Yesterday, the Department of Housing and Urban Development (HUD) approved a new fair housing rule called Affirmatively Furthering Fair Housing. This follows the Supreme Court’s recent ruling allowing HUD to use disparate impact as a criterion for determining whether a community is guilty of unfair housing practices.

 Wikimedia photo by Bernard Gagnon.

In one form of disparate impact analyses, HUD compares the racial makeup of a city or suburb with the makeup of the urban area as a whole. If the city doesn’t have enough minorities, it is presumed guilty and must take steps to attract more. Under the Affirmatively Furthering Fair Housing rule, that could mean subsidizing low-income housing or rezoning land for high-density housing.

While I have no doubt that prejudice is still a factor in housing in America, there are many other factors that influence the distribution of people across an urban area. These include religion, education, and personal tastes in food, recreation, and other activities. For example, low-income families with children will be more likely to live near a Walmart Supercenter while high-income families with no children will be more likely to live near a Whole Foods. To expect every suburb, most of whose borders are based on little more than historical accidents, to have a perfect mix of races is absurd.

Recollections on Fannie Mae’s Housing Goals

With the release of Peter Wallison’s new book, Hidden in Plain Sight, I suspect the debates over the role of Fannie Mae and Freddie Mac in the financial crisis may heat up again (I suspect Joe Nocera is working up a nasty review).  Anyone interested in the financial crisis should read this book.  It is extensively documented and well-written.  While the narrative is similar to other of Wallison’s writings, he musters far more evidence for his case here. The amount of contemporaneous material from advocates, HUD and the GSEs (Fannie and Freddie) is impressive.

I’ve generally been on the fence about the housing goals, as I have felt that GSE leverage was a far greater issue.  The book leaves me more sympathetic to Wallison’s argument.  For the best counter-argument regarding the goals, see John Weicher’s paper on the issue (unlike Nocera, Weicher includes facts and analysis). 

Uh-Oh: Bipartisan Housing Commission Announced

The words “bipartisan” and “commission” usually send a chill down my spine. I felt such a chill when I learned that the Bipartisan Policy Center (BPC) had formed a Housing Commission to “address the long-term challenges facing a struggling housing sector.” My initial reaction was confirmed when I read that it would be chaired by former government officials and politicians of the establishment type:

Strong Cities, Strong Communities: Bad Idea

When government officials come up with what they claim to be a wonderful new idea, I often think of an old Saturday Night Live skit from 1990 poking fun at commercials for blue jeans. The skit’s scene is a group of middle-aged buddies getting ready to play basketball in their new “Bad Idea Jeans.” Each guy optimistically announces a plan to do something that is actually a “bad idea.” For example, a character says “I don’t know the guy but I’ve got two kidneys and he needs one, so I figured…” and “BAD IDEA” flashes across the screen.

Some Thoughts on Federal Rental Housing Assistance

Last week I participated on a panel on federal rental housing policy, organized by Harvard’s Joint Center for Housing Studies in conjunction with the release of their new report on conditions in the rental market.  In their defense, the report does attempt to avoid offering policy prescriptions.  But the report does come pretty close to suggesting that we spend more on federal rental housing assistance.  In the post-housing bubble  e

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