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

Another major concern about expansion of homeownership for low-income families is that some of them may now be at higher financial risk. Part of the increase in homeownership by low-income people and members of racial minorities is driven by expansion of the "subprime" lending industry-lenders who make loans at interest rates higher than that charged by conventional lenders to borrowers who do not qualify for conventional mortgages for reasons related to credit history or insufficient income. There is ample evidence that minority and low-income households are purposely targeted by subprime lenders. Black and Hispanic people are overrepresented in the subprime market. Although subprime lending is legal business practice, predatory lending is not. Unscrupulous lenders who make high profits by lending to families who are paying too much for their loans, with all manner of hidden charges, or taking out loans they cannot afford, are creating a class of homeowners with heightened risk of foreclosure (Bradford, 2002; National Association of Local Housing Finance Agencies, 2002).

Under any circumstances, homeownership does not mean freedom from high housing cost burdens, and the lowest income homeowners spend dangerously high percentages of their income on housing. Homeownership also brings unanticipated costs for home repair that people with no financial cushion can ill afford. Low-income people also have less predictable income and are more subject to loss of income due to illness or periods of economic downturn. Recent increases in rates of mortgage foreclosure in the wake of the recession of 2001 and 2002 indicate the precariousness of the financial well-being of low-income mortgagors (Fleishman, 2002). The consequences of defaulting on a mortgage are very damaging to one's financial and emotional health, and more serious than having a poor record as a renter, which is serious enough (Hornburg, 2002).

A particularly insidious by-product of the growing hegemony of homeownership in the United States is a corresponding devaluing of rental housing, contributing to loss of rental housing units, a lack of resources to build new rental housing, and resistance to the siting of rental housing, especially that which is classified as affordable, by neighborhoods and local elected officials. Thus, the shortage of affordable rental housing must be analyzed in the context of preference for homeownership. Even as greater residential stability is cited as an argument in favor of homeownership, the degree to which the expansion and favoring of homeownership contributes to the dwindling supply of affordable rental housing further exacerbates the residential mobility problems of renters.

Affordable Rental Housing

The single most important contribution the federal government makes to reducing residential mobility of poor families is through rental housing assistance. Rental housing assistance, tied to the tenant or the housing unit, bridges the gap between the cost of housing and what the family can afford. In a study of formerly homeless families five years after leaving a shelter, Shinn and her colleagues (1998) concluded that the only factor that could account for some families' ability to maintain stable housing for the five-year period was receipt of rental housing assistance.