affordable housing crisis: Residential mobility of poor families and school mobility of poor children, The

Journal of Negro Education, The, Winter 2003 by Crowley, Sheila

The other major source of loss of federally-assisted housing is decisions by owners of privately-subsidized housing to opt out of their contracts. These are contracts with HUD to provide rental housing for low-income households in exchange for low-interest mortgages and rental subsidy payments. Originally 20-year contracts, HUD has been renewing them on a year-to-year basis. In some cases, the amount of HUD subsidy required to pay the mortgage has exceeded the rents the property could command on the open market, because the property or the neighborhood in which it is located has deteriorated. HUD is now restructuring these mortgages to bring the rents more in line with the market. In other cases, the contract rents are much lower than what the surrounding market generates. Such properties are likely to leave the program unless HUD renegotiates rents that are more profitable for the owners. Owners of over 150,000 previously HUD-assisted or -insured apartments have opted out of their contracts and converted the property to market-rate housing, removing these units from the assisted housing stock. Another 640,000 units are at risk of similar conversion (Bodaken, 2002).

The consequences are serious for residents of such developments. They are entitled to housing vouchers and to use them to remain in their units. If the new rent is more than the standard voucher will support, the resident is entitled to an "enhanced "voucher that will cover the new rent. However, if the resident moves, the value of the voucher is reduced, limiting its usefulness in a new housing search (NLIHC, 24002a). Moreover, the vacated unit is lost to the assisted housing stock forever.

The consequences for residents of public housing that is being demolished are more dire. Although they too are guaranteed continued housing assistance, they are still at high risk of housing instability. The first systematic assessment of what has happened to public housing residents in HOPE VI sites reveals that the whereabouts and outcomes for many residents are simply unknown. Of those whose circumstances are known, very few (19%) have returned to new housing redeveloped through HOPE VI, more (29%) have relocated to other public housing, 33% have taken housing vouchers to search for housing in the market, and 18% are no longer receiving housing assistance. Most households (83%) remain very poor and report some degree of material hardship. Half of the households displaced by HOPE VI have moved two or more times, and 8% have moved four or more times (Buron, Popkin, Levy, Harris, & Khadduri, 2002).

Federal spending to build new affordable rental housing is quite limited when compared to former expenditure levels, and wholly inadequate when compared to the need. To close the gap in needed rental housing units for extremely low-income households would require construction of five million units over the next 20 years (Millennial Housing Commission, 2002).

Federal subsidies today that support production of new affordable rental housing and preservation of existing affordable rental housing take two forms. HOME is a formulabased block grant to states and localities to build or rehabilitate affordable housing. Forty-four percent of HOME funds are used for homeownership activities, and the percentage going to homeownership is increasing. Since its inception in 1990, HOME has funded the production and rehabilitation of 400,000 housing units. The HOME appropriation for fiscal year 2002 is $1.8 billion (NLIHC, 2002a) and is the only housing program for which HUD is seeking a notable (5%) increase in its FY04 budget (HUD, 2003).