Poorer households spend much of income on rent

WASHINGTON – Growing numbers of the nation’s poorest households are using more than half their earnings for rent while waiting years for federal housing assistance that may never come.

The phenomenon is largely playing out in urban and suburban locales but has exploded recently in rural areas as coveted rental assistance becomes harder to get because of high demand and scant funding from Congress.

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.

A new report by the Department of Housing and Urban Development describes the startling growth of the problem since 2003. It found that 6 million impoverished households used most of their monthly earnings for housing or lived in substandard conditions in 2005 – an increase of 16 percent, or 817,000 families, since 2003.

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.

Despite the growing need for help, these 6 million families received no federal rent assistance from HUD. In fact, federal housing assistance reaches only about one in four income-eligible households.

There’s simply not enough to go around, in part because for many years the Bush administration and a compliant Congress have diverted money from housing and other domestic programs to pay for tax cuts and the war in Iraq and Afghanistan.

“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.

“If you’re not one of the lucky 25 percent to receive assistance, you’re very likely to have a very high rent burden or live in substandard conditions or in overcrowded conditions,” said Sunia Zaterman, executive director of the Council of Large Public Housing Authorities. “The demand for assistance goes significantly unmet.”

In fact, a family with only one full-time minimum-wage earner can’t afford a standard two-bedroom apartment anywhere in the country, the Harvard study found.

“We’re reaching crisis dimensions in many communities,” said former HUD Secretary Henry Cisneros, who now chairs CityView, a Santa Monica, Calif., company that helps finance and develop affordable housing.

“It’s just unreasonable to expect that suddenly we’re in an era where 50 percent of a family’s budget can be spent on housing. I don’t think anyone who looks at the way families are living in America can justify that, not even this administration.”

Rosalinda Santana, 23, a single mother of two in East Hartford, Conn., lost her hotel housekeeping job after taking two weeks off to care for her sick son because she couldn’t afford a babysitter.

While she looks for work, she’s putting the bulk of her $563 monthly unemployment insurance check toward her $750 rent. Santana applied for a slot in the “Section 8” Housing Choice Voucher program, the nation’s primary rent assistance program for low-income families. But she faces a two- to three-year wait because funding hasn’t kept pace with demand.

Santana’s landlord has been patient about her unpaid rent, but she and her children could end up back with relatives in New York City if she doesn’t find work soon.

“I left New York City to give my kids a better life, and I don’t want to go back to living in a crappy situation,” she said. “I feel like if there’s help out there, I should be able to get it.”

While some view housing assistance as welfare for the poor, the nation’s largest housing subsidy by far is the federal mortgage interest tax deduction. It’s projected to provide U.S. homeowners an estimated $75.6 billion in tax breaks this year. Most of that relief will go to higher-income families.

Voucher recipients, most of whom are elderly or disabled, pay 30 percent of their earnings for housing and utilities – an average of $280 per month – while the government subsidizes the balance of housing costs up to a specified amount.

But long waiting lists for the program are common nationwide. In Washington, D.C., the waiting list tops 56,000 people. Miami housing officials have reviewed applications from only 4,000 of the 40,000 people on its waiting list.

Making matters worse, Retsinas estimates that 200,000 affordable apartments – in which tenants pay less than 30 percent of their income for housing and utilities – are lost in the U.S. each year.

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.

Other affordable apartments are lost when building owners opt out of a HUD “Section 8” program that guarantees rent payments to owners who lease to low-income tenants. More than 118,000 HUD-subsidized apartments have been lost that way since 1997, 600 alone in Washington, D.C., since October.

When the owner of Dorothy Paul’s HUD-subsidized townhouse in D.C. decided in 2002 not to renew his subsidized-housing contract, Paul tried to buy the home for $106,000, which was the fair market price at the time. But the owner balked at the deal just as property values took off throughout the city.

Five years later, Paul is still in litigation to enforce the original sale agreement, but the home could now fetch well more than $400,000. That’s much more than Paul can afford.

The owner is trying to evict Paul so he can renovate and sell the property in the open market. As her legal battle drags on, her rent has soared to $1,200 a month, which eats up well over half of her income as a hair stylist.

If evicted, Paul fears she’ll be forced to leave the neighborhood and city she loves.

“All I can do is keep fighting until they say it’s over. I don’t know what else to do. I can’t afford to stay in D.C. I just really believe that I’ll get justice,” she said.