Nation's Poor Hit by Housing Crunch

I have been meaning to post this for a while. So, it is a bit old, but (I think) very relevant.

There is a phenomenon taking place in urban and suburban communities, but according to the article has recently exploded in rural communities. A new report by HUD says the lack of affordable homes for poor families is the nation’s No. 1 housing problem and undermines the stability and security of families and communities nationwide. The report found that 6 million impoverished households used most of their monthly earnings for housing or lived in substandard conditions in 2005. That’s an increase of 16 percent, or 817,000 families, since 2003. Further, The number of rural families facing this dilemma grew by 51 percent to nearly 1 million households over the same two-year span. At the same time, these struggling households saw their average monthly incomes decline while their average rent payments increased. The level at which housing is affordable is 30% of your income, the standard set back in 1935.

The federal government is not helping. Only one in four eligible families are being helped. I can corroborate this qualitatively. Legal Services office are inundated with calls from needy clients who cannot pay their rent and there is just nowhere to send them. I serve clients in mostly family matters, but the issues often intersect and frustration is abound in the housing advocacy community because of a lack of resources for clients.

"There definitely has been a diminution of federal support for low-income housing in recent years," said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University. "Clearly, it says there are other priorities, and this is not on the short list."
The lack of assistance, soaring rents, slow wage growth and a shrinking inventory of affordable apartments have made it nearly impossible for millions of low-income renters to adequately house their families. One of the most startling problems is also that subsidized housing is being abandoned for condominiums.

For every new affordable housing unit constructed, two are demolished, abandoned or become condominiums or expensive rentals, according to the John D. and Catherine T. MacArthur Foundation. Nearly 375,000 U.S. apartments have been converted to condominiums since 2002, according to Real Capital Analytics, a New York real estate consulting firm. For more on this situation here.

Another rising problem from the San Francisco Chronicle. Foreclosures continued to rise throughout the country, the state (California) and the Bay Area in June, according to a report to be released today. Nationally, 164,644 foreclosure notices were filed in June, up 87 percent from June of last year, said RealtyTrac.com, an online marketplace for foreclosure properties. In the Bay Area, the number of foreclosure notices was 5,018, almost triple the 1,780 in June 2006. Subprime loans are said to be the culprit, which are loans to people with tarnished credit, as well as loans for 100 percent financing.

Of course this problem hits those at the bottom rung the hardest. But, it is sure to travel up the ladder. Many believed a housing crash is imminent, though it seems it may not occur so quickly until the blood is finally drained from our economy. Tax breaks for the rich, endless war and no bid contracts for multinational corporations (on our dime) is not only contributing, but is directly responsible for the lack of resources states and locales can put toward housing for the needy.