Reversing the Tide: Will State and Local Governments House the Poor as Federal Direct Subsidies Decline?

Problem: Most housing programs in the United States do not focus on the most pressing housing needs. In 2003 more than 13 million households spent at least half their incomes on rent or the costs of homeownership, an increase of more than 35% since 1993. The vast majority of these households were poor. Yet housing policy has shifted away from deep-subsidy programs targeted to the poorest households toward providing shallow subsidies to higher-income households. Purpose: This article considers whether, given that the federal government is unlikely to increase funding for low-income housing, state and local governments are likely to increase housing assistance to the lowest-income households in the future, how such assistance could be structured, and how states and localities might be persuaded or compelled to provide this assistance. Methods: We examine the income distribution of households supported by major programs administered by state and local governments and the extent to which these programs target the poor and provide them with sufficient levels of subsidy. We reviewed program data reported to funding agencies and trade associations, census data on housing problems compiled by the U.S. Department of Housing and Urban Development, and data from surveys of policies and practices conducted by academic researchers and policy organizations. Results and conclusions: We find that the shift to state and local administration of federal funds has not significantly shifted priorities. We provide evidence that states are not using their discretion go beyond federal requirements, and are not serving income groups below those they are required to serve. Locally funded programs are less likely to target the poor than state or federal programs. Takeaway for practice: Rather than hoping for substantial local housing assistance targeted to the poor, we recommend making more effective use of existing federal resources. Research support: None. [ABSTRACT FROM AUTHOR]