Chapter 5
The Housing Problem

At one time a home was defined as a place where a family resided, but as American society changed, so did the definition of home. A home is now considered a place where one or more people live, a private place to which they have legal right and where strangers may be excluded. It is the place where people keep their belongings and where they feel safe from the outside world. For housing to be considered a home, it should be permanent with an address. Furthermore, in the best of circumstances a home should not be substandard but should still be affordable. Many people would agree that a place to call home is a basic human right.

Those people who have no fixed address and no private space of their own are the homeless. The obvious solution to homelessness would be to find a home for everyone who needs one. There is enough housing available in the United States; as such, the problem lies in the affordability of that housing. Most of the housing in the United States costs far more than poor people can afford to rent or buy.

HIGH HOUSING COSTS AND HOMELESSNESS

According to Mary Cunningham and Sharon McDonald in Promising Strategies to End Family Homelessness (June 2006, http://www.hoopsforthehomeless.org/docs/hoopspaperfinal.pdf), research indicates that the primary cause of most homelessness is the inability to pay for housing, which is caused by some combination of low income and high housing costs. Even though many other factors may contribute to homelessness, such as a low level of educational achievement or mental illness, addressing these problems will seldom bring someone out of homelessness by itself. The underlying issue of not being able to afford housing will still need to be addressed.

Marybeth Shinn et al. conducted a study that shows no real difference exists between homeless people and the rest of society, other than housing affordability issues. Shinn et al. conducted a five-year study of 564 homeless families and presented their results in "Predictors of Homelessness among Families in New York City: From Shelter Request to Housing Stability" (American Journal of Public Health, November 1998).

Shinn et al. find that when homeless families were provided with subsidies that allowed them to afford housing, 80% remained housed in their own residence for at least a year. This was true regardless of their social or personal attributes, such as their education level, race, or sex. This confirms the idea that while many homeless people face difficulties because of their personal backgrounds, these problems are not what drove most of them into homelessness. Furthermore, if given access to affordable housing, most will be able to take advantage of it.

The National Alliance to End Homelessness confirms that, in most ways, homeless people are no different from housed people. The alliance states in Policy Book 2006 (August 17, 2006, http://www.endhomelessness.org/content/article/detail/586) that 80% of homeless people "have similar rates of mental illness, substance abuse disorders, physical ailments, and domestic violence experience. They have similar education levels and numbers of children." This group only needs affordable housing. The other 20% of homeless people can be characterized as chronically homeless, and they do differ substantially from the general population of poor people—they have higher rates of chronic disabilities, substance abuse disorders, physical disabilities, and human immunodeficiency virus/acquired immunodeficiency syndrome. These people need housing linked to other supportive services to help them move out of homelessness.

HOUSING THE POOR

When 30% or more of a meager income is spent on housing, hardship is the result. For that reason the federal government's official standard for low-income housing is that rent and utilities should cost no more than 30% of the annual income of someone in poverty. "Low-income housing" is housing that is affordable to those in poverty based on that formula. In 2007 a family of two with an annual income of less than $13,200 was in poverty; a family of four was in poverty if their income was less than $20,000. (See Table 1.1 in Chapter 1.) Thus, in 2007 housing for a family of two at the poverty line should cost no more than one-third of $13,200 annually, or no more than $330 per month; for a family of four, housing should cost no more than one-third of $20,000 annually, or no more than $500 per month.

However, the price of rental units has been on the rise since 1975, at the same time that the real income of renters has been declining. The Joint Center for Housing Studies (JCHS) of Harvard University reports that in 2005 dollars renters in 1975 had a median income of $2,618 per month and a median gross rent (including rent and utilities) of $657. (See Table 5.1.) By 2005 gross rent had risen while income had declined. In that year renters had a median income of $2,430 per month and a median gross rent of $709.

According to the U.S. Bureau of the Census, the median monthly gross rent for renter-occupied housing units was $728. (See Table 5.2.) As a result of such high rents, across the nation 45.7% of households in rental property spent 30% or more of their household income on rent. (See Table 5.3.) Renters in California faced partic-ularly difficult circumstances. The median monthly rent there was the highest in the continental United States ($973) and more than half (51.7%) of renters spent 30% or more of their household income on housing.

Homeownership is also well beyond the reach of most low-income families. Walt Malony, in "Existing-Home Sales Holding at a Sustainable Pace" (September 25, 2006, http://www.realtor.org/press_room/news_releases/2006/ehs_aug06_existing_home_sales_holding.html), reports that in August 2006 the median price for all housing types was $225,000, down 1.7% from August 2005, when the median price was $229,000. The JCHS notes that between 1994 and 2005 home ownership was becoming increasingly out of reach for all but those in the highest income brackets in most metropolitan areas. (See Figure 5.1.)

Not Enough Affordable Units Available

Researchers from every discipline agree that the number of housing units that are affordable to the poor is insufficient to meet needs. In Changing Priorities: The Federal Budget and Housing Assistance, 1976–2005 (October 2004, http://es.nlihc.org/doc/cp04.pdf), Cushing N. Dolbeare, Irene Basloe Saraf, and Sheila Crowley quote a finding by a congressional commission that there were almost two million fewer units of housing affordable to low-income households than there were in 2004.

In December 2000 Congress established the bipartisan Millennial Housing Commission to examine the role of the federal government in meeting the nation's housing needs. In Meeting Our Nation's Housing Challenges (May 30, 2002, http://permanent.access.gpo.gov/lps19766/www.mhc.gov/mhcfinal.pdf), the commission states that "there is simply not enough affordable housing. The inadequacy of supply increases dramatically as one moves down the ladder of family earnings. The challenge is most acute for rental housing in high-cost areas, and the most egregious problem is for the very poor."

The limited availability of affordable housing is a problem across the nation. In The State of America's Cities 2005: The Annual Opinion Survey of Municipal Elected Officials (2005, http://www.nlc.org/ASSETS/5C8EBE817F604AE093F6072BD398F7E0/rmpsoacrpt05.pdf), an annual opinion survey of municipal elected officials, Christiana Brennan, Elizabeth Wheel, and Christopher Hoene find that 18% of city officials believed that increasing the availability of quality affordable housing should be a high priority for the federal government. (See Table 5.4.)

At Risk of Becoming Homeless

The severe shortage of affordable housing means that many low-income people and families constantly face the threat of homelessness, and the problem is not getting better. In Affordable Housing Needs: A Report to Congress on the Significant Need for Housing (2005, http://www.huduser.org/Publications/pdf/AffHsgNeedsRpt2003.pdf), the U.S. Department of Housing and Urban Development's (HUD) Office of Policy Development and Research notes that the number of low-income households paying more than 30% of their income in rent or living in substandard housing remained unchanged between 1995 and 2003. Approximately 5% of U.S. households experienced during that time "worst-case needs." The Office of Policy Development and Research defines families with "worst-case needs" as those who:

• Are renters
• Do not receive housing assistance from federal, state, or local government programs
• Have incomes below 50% of their local area median family income, as determined by HUD
• Pay more than one-half of their income for rent and utilities, or live in severely substandard housing

In other words, these are extremely impoverished people who do not own their housing and can barely afford to pay their housing costs or can only afford to stay in the worst housing. Of all housed people, they are the ones closest to being forced into homelessness. The Office of Policy Development and Research reports that in 2003, 11.4 million people in 5.2 million households had worst-case housing needs. Of these households, 29% were families with children, and 22% were elderly households. These households had an average income of $883 per month and an average gross monthly rent of $669, a rent burden of 76%. The Office of Policy Development and Research notes that four out of ten families with children that needed affordable housing actually had an adult wage earner who worked full time for low wages.

The Office of Policy Development and Research also finds that there was an adequate number of rental housing units to provide affordable housing to households with incomes above 40% of the area median income, but that there were far fewer adequate housing units available to the poorest households, especially in urban areas. In addition, some higher-income households occupied housing units that cost less than 30% of their income, restricting the units available to lower-income households. Some of the housing available was substandard as well. Furthermore, the housing stock affordable to low-income people is continually shrinking. The JCHS, in The State of the Nation's Housing, 2006 (http://www.jchs.harvard.edu/publications/markets/son2006/son2006.pdf), states that the inventory of housing stock that is affordable to renter households with incomes of $16,000 or less had plunged by 1.2 million between 1993 and 2003.

For as long as worst-case needs have been reported by HUD, affordability rather than housing quality has been the main problem facing renters. A household that spends more than 50% of its income on housing is considered severely cost-burdened. In State of the Nation's Housing: 2006, the JCHS finds that the number of households with severe cost burdens—those that paid more than half their income for housing—increased by nearly two million between 2001 and 2004 to a record 15.8 million households. Almost half (46%) of households in the bottom income quartile were severely cost burdened in 2004.

Working Families Struggle to Keep Up

The National Low Income Housing Coalition (NLIHC), in Out of Reach, 2006 (December 2006, http://www.nlihc.org/oor/oor2006/?CFID=8698180&CFTOKEN=35268835), analyzes the fair market rent (FMR)—HUD's estimate of what a household seeking modest rental housing must expect to pay for rent and utilities—for a two-bedroom rental unit in relation to the median hourly wage. In 2006 the hourly wage needed to pay the FMR for a two-bedroom apartment spending no more than 30% of one's income on rent was $16.31. However, the median hourly wage in the United States was under $15, the average renter earned $13 per hour or less, and the federal minimum wage was $5.15 per hour. The NLIHC states that not only can minimum wage workers not find an affordable two-bedroom apartment but also "there is not a county in the country where a full-time minimum wage worker can afford even a one-bedroom apartment at the FMR." In most cities in the nation the housing wage was at least twice the federal minimum wage. In other words, to afford the FMR for a two-bedroom apartment, a household must have two or three minimum-wage workers working full time.

REASONS FOR THE LACK OF LOW-INCOME HOUSING

The major reasons for the lack of low-income housing are declining federal support; bureaucratic red tape, fraud, and waste; and a variety of local factors that affect new construction.

Declining Federal Support

The development and operation of low-income housing units depends in large part on government funding administered by HUD. Dolbeare, Saraf, and Crowley state that "the federal government's high water mark for housing assistance was the mid-1970s and funding has not come near that level in the years since. Nor will it in the next five years, absent a major policy and funding shift." Between 1976 and 2004 the housing assistance budget authority decreased 48%; in addition, in 1976 low-income housing units were being built, whereas in 2004 the budget mainly maintained existing units. In fact, because of public housing demolitions, the number of low-income housing units had declined overall by 2004.

Fraud, Waste, and Delays Hamper Rehabilitation

A major HUD goal is to increase the supply of affordable, decent, and safe rental housing, but it has not been particularly successful in this regard. In Department of Housing and Urban Development: Status of Achieving Key Outcomes and Addressing Major Management Challenges (July 2001, http://www.gao.gov/new.items/d01833.pdf), the U.S. General Accounting Office (GAO; now the Government Accountability Office), notes that HUD programs had been plagued by fraud, waste, and errors.

One of the federal housing production programs administered by HUD is the Urban Revitalization Demonstration Program, commonly known as HOPE VI. This program provides grants to local public housing authorities, who contract with private developers to rehabilitate public housing. The GAO notes in Public Housing: HUD's Oversight of HOPE VI Sites Needs to Be More Consistent (May 2003, http://www.gao.gov/new.items/d03555.pdf) that between fiscal year (FY) 1993 and FY 2001, HUD awarded about $4.5 billion in HOPE VI revitalization grants to 98 public housing authorities for 165 sites. In 2002 Congress charged the GAO with investigating and reporting on progress and HUD's oversight of the projects. The GAO reports that as of December 31, 2002, construction was complete on only 15 of the 165 sites. About one-quarter (27%) of the planned rehabilitation work had been done but nearly half (47%, or $2.1 billion) of the grant money had been spent, meaning that the projects were severely over budget. Work had been completed by the deadline on only three of the grants, and the construction deadlines had expired on forty-two grants. For FY 2004 the Bush administration proposed eliminating the HOPE VI program altogether; however, the program was funded at $149 million, down 73.8% from the $570 million funded in FY 2003. (See Table 5.5.) The program was cut even further in FY 2006, to $99 million.

Low Profit Margins Bring Neglect

HUD contracts with private owners limit profits and often limit the monies put back into the property for repairs. The existing housing available to renters at the lowest income levels often suffers from lack of upkeep. Neglected maintenance results in deterioration and sometimes removal from the housing inventory altogether.

According to The State of the Nation's Housing, 2003 (2003, http://www.jchs.harvard.edu/publications/markets/son2003.pdf), the JCHS notes that about 705,000 tenants receiving government housing assistance in 2003 lived in substandard conditions. HUD data show that in 2003 an affordable unit existed for every household that earned 40% of the area medium income. However, as Figure 5.2 shows, housing units were only both affordable and available for households earning 60% of the area medium income. Furthermore, a significant proportion of those housing units are substandard or inadequate. In fact, there is not enough affordable, available, and adequate housing available to house all low-income families.

Factors That Inhibit Construction

Construction of low-income units has been hampered by community resistance, by regulations that increase the cost of construction, and by limits on federal tax credits that make new construction unprofitable.

In his "Dissenting Statement to the Report of the Millennial Housing Commission" (May 31, 2002, http://www.heritage.org/Research/Welfare/WM102.cfm), Robert Rector complains, "It is a simple fact that those cities that have the greatest 'affordability' problem are those that have 'smart growth' or other regulatory policies that severely limit new housing growth. Policies such as restrictive zoning, antiquated building codes, and high impact fees for new construction reduce housing supply and greatly increase costs for everyone in a community."

These regulatory policies are put in place in part because, to many people, the prospect of low-income subsidized housing is synonymous with rising crime, falling property values, and overcrowded classrooms, and it is cause for protest. Resistance to the construction of low-income housing is said to be evidence of a "not in my backyard" (NIMBY) way of thinking. However, in From NIMBY to Good Neighbors: Recent Studies Reinforce That Apartments Are Good for a Community (May 1, 2006, http://www.nmhc.org/Content/ServeFile.cfm?FileID=5408), the National Multi Housing Council summarizes research showing that smart growth may depend on the development of more high-density housing, such as apartments. The council states, "The good news is that there is an ever-increasing body of research that indicates that apartments (including affordable apartments) are not a threat to local property values and are a net plus to communities."

However, developers complain that there is no profit to be made from building and operating low-income housing. To counteract this, the 1986 Low-Income Housing Tax Credit program gave the states $1.25 per capita in tax credits toward the private development of low-income housing. In "A New Era for Affordable Housing" (National Real Estate Investor, March 1, 2003), H. Lee Murphy reports on the National Council of State Housing Agencies' data indicating that construction hit a high in 1994, when 117,100 apartment units were built with the credits. Skyrocketing construction costs brought a decline in new construction, which reached a low of 66,900 units in 2000. In 2001 Congress raised the per capita allotment to $1.75 and provided that the formula would rise each year with inflation. The tax credits financed the construction of 75,000 new units in 2001. Stan Luxenberg reports in "Affordable Housing Shortage" (National Real Estate Investor, September 1, 2006) that between 2002 and 2006 tax credits subsidized the construction of about 125,000 units per year. However, this rate of construction still did not keep pace with the number of affordable housing units that are demolished each year.

HABITAT FOR HUMANITY

One group dedicated to solving the housing problem one house at a time was the brainchild of Millard Fuller and Linda Fuller, who formed Habitat for Humanity International (HFHI) with a group of supporters in 1976. The purpose of this worldwide Christian service organization is to provide simple housing for the needy, built by volunteers assisted by the future homeowner. The homeowner assumes an interest-free, thirty-year mortgage, and materials are funded through donations and fund-raising activities. The idea is to give people assistance accompanied by responsibility.

By 2007 the HFHI had built more than two hundred thousand houses that sheltered one million people worldwide. According to the HFHI (2007, http://www.habitat.org/how/factsheet.aspx), homes in developing countries may cost as little as $800 to build, whereas the average house in the United States can cost nearly $60,000. Not all houses are new; the organization also restores older homes. Many volunteers travel to other countries to build homes. The HFHI (2007, http://www.habitat.org/how/carter.aspx) notes that the most famous volunteers, the former president Jimmy Carter and his wife, Rosalynn, made their first work trip in 1984 to New York City, sparking widespread interest in the movement. An annual event since that time, the weeklong Jimmy Carter Work Project built fifty-four homes in Benton Harbor and Detroit, Michigan, in June 2005.

WHERE THE HOMELESS LIVE

When faced with high rents and low housing availability, many poor people become homeless. What happens to them? Where do they live? Research shows that after becoming homeless, many people move around, staying in one place for a while, then moving on to another place. Many homeless people take advantage of homeless shelters at some point. Such shelters may be funded by the federal government, by religious organizations, or by other private homeless advocates.

Emergency Housing: Shelters and Transitional Housing

Typically, a homeless shelter provides dormitory-style sleeping accommodations and bathing facilities, with varying services for laundry, telephone calls, and other needs. Residents are often limited in the length of their stays and must leave the shelter during the day under most circumstances. By contrast, transitional housing is intended to bridge the gap between the shelter or street and permanent housing, with appropriate services to move the homeless into independent living. It may be a room in a hotel or motel, or it may be a subsidized apartment.

Counting the Homeless in Shelters

The Census Bureau conducted a point-in-time count of the homeless population living in shelters for the 2000 census, and the results were published by Annetta C. Smith and Denise I. Smith in Emergency and Transitional Shelter Population: 2000—Census 2000 Special Reports (October 2001, http://www.census.gov/prod/2001pubs/censr01-2.pdf). Smith and Smith report a decline in the number of people living in homeless shelters—from 178,638 people in 1990 to 170,706 people in 2000. Based on their own experience, advocates for the homeless deny that there could have been a decline in the numbers. They criticize the Census Bureau's count as flawed, arguing that the survey excluded shelters with fewer than one hundred beds and could not provide a full picture of homelessness because it was conducted over only three nights. Smith and Smith caution that the Census Bureau's count is not "representative of the entire population that could be defined as living in emergency and transitional shelters."

Other evidence suggests that the homeless population housed in shelters is not only increasing, but would increase more dramatically if more shelter beds became available. The Conference of Mayors reports in the Hunger and Homelessness Survey that in 2006 the overall number of emergency shelter beds increased by an estimated 8%. At the same time the number of requests for emergency shelter beds increased over the previous year in the twenty-three major cities surveyed. Requests by homeless families with children increased by an average of 5%; requests by single homeless individuals increased by an average of 9%. Of all the cities surveyed, 68% reported an increase in requests for shelter by homeless individuals, and 59% reported an increase in requests by homeless families. Many of the cities had to turn homeless people and families away. On average, 23% of shelter requests by homeless people overall went unmet, and 29% of the shelter requests by homeless families went unmet that year.

Homeless Children and Youth

In 2002, researchers attempted to count the number of homeless people in Monterey County, California, focusing on what was called "the fastest growing segment of the homeless population," homeless youth (Homeless Census and Homeless Youth/Foster Teen Study, County of Monterey, California, 2002). Based on an actual count and interviews with 2,681 homeless individuals, the researchers estimated that between 8,686 and 11,214 people were homeless in Monterey County at some time during 2002. The majority of those interviewed (65%) were found on the street, 14% were in transitional housing, and 6% were in emergency shelters.

Of the individuals counted, more than one-fifth (21%) were between the ages of fourteen and eighteen. The youths were asked to describe their current living situation. The majority (61%) reported staying temporarily with family or friends. More than one-fifth (22%) reported they were living outdoors, 6.1% were living in a shelter, and 11.5% were living in an automobile/van. This particular segment of the homeless tended to shy away from shelters, especially if they were underage and feared interference from the authorities.

Counts by the public school system give some idea of both the numbers of homeless children and where they live. In accordance with the provisions of the Education for Homeless Children and Youth program, Title VII-B of the McKinney-Vento Homeless Assistance Act (42 USC 11431 et seq.), states that receive funds under the act must submit a report to the U.S. Department of Education regarding the estimated number of homeless children in the state. According to the most recent count (Report to Congress Fiscal Year 2000, Washington, DC, 2000), in 2000 there were an estimated 866,899 homeless children in forty-six reporting states. More than one-third (35%) of these children lived in shelters; 35% stayed doubled up with others, presumably family or friends; 25% lived in motels and the like. Most distressing for those concerned about the health and well-being of children was that 38,732 children lived unsheltered. By far the greatest number of unsheltered children (17,640) lived in California.

Illegal Occupancy

Poor neighborhoods are often full of abandoned buildings. Even the best-intentioned landlords cannot afford to maintain their properties in these areas. Many have let their buildings deteriorate or have simply walked away, leaving the fate of the building and its residents in the hands of the government. Despite overcrowding and unsafe conditions, many homeless people move into these dilapidated buildings illegally, glad for what shelter they can find. Municipal governments, overwhelmed by long waiting lists for public housing, by a lack of funds and personnel, and by an inadequate supply of emergency shelter beds, are often unable or unwilling to strictly enforce housing laws, allowing the homeless to become squatters rather than forcing them into the streets. Some deliberately turn a blind eye to the problem, knowing they have no better solution for the homeless.

The result is a multitude of housing units with deplorable living conditions—tenants bedding down in illegal boiler basements, sharing beds with children or in-laws, or sharing bathrooms with strangers. The buildings may have leaks and rot, rusted fire escapes, and rat and roach infestations. Given the alternative, many homeless people feel lucky to be sheltered at all.

RISK OF SQUATTING

However, squatting can leave the homeless vulnerable to legal remedies or public criticism. The most dramatic case in recent years took place in December 1999 in Worcester, Massachusetts. Tom Kirchofer reports in "Homeless Couple Charged in Firefighter Deaths" (December 8, 1999, http://www.firehouse.com/worcester/charged.html) that a homeless couple had taken up residence in an abandoned building in the city. One of them allegedly knocked over a candle during an argument and the building caught fire. The Worcester fire department was called, and six firefighters were killed while fighting the fire. The homeless man and woman were each charged with involuntary manslaughter. The public outcry against the homeless couple, and against homeless people in general, reached national proportions. Frustration ran rampant in the ranks of homeless advocates. Most believed the Worcester couple was guilty of nothing more than trying to stay alive. Nicole Witherbee, the policy coordinator for the Massachusetts Coalition for the Homeless, voiced her frustration: "We make laws all the time, they can't panhandle, they can't loiter, we don't have enough shelter beds, so when they go into abandoned buildings it's trespassing. So where is it they're supposed to be?"—underscoring the lack of options and resources homeless people deal with daily.