Housing supply and cost

(Ref. 502)
Problem Components
Policy issue area: Cities/regions
Policy issue: Housing
Description: Rising costs place housing beyond the means of young families and the poor.
Symptoms: High mortgage interest rates (in 1970 mortgage payments took 18% of median family income, in 1990 it is 30%); home ownership rate for 25- to 29-year olds dropped from 44% in 1979 to 35% in 1990; 20 million households live in deficient housing; requests for emergency shelter continue to grow.
Causes: Faulty economic policies; inflation; abandonment or cutbacks of Federal housing programs (75% cut); lessened earnings by workers; families have to pay an ever- increasing portion of their income for housing (owned or rented).
Cost of problem: -
Solution Components
Resources: Federal, state and local governments; financial institutions; building industry.
Goal: 1. Encourage tax policies and finance programs to ensure reasonable standards and adequate supply of housing to middle- and low-income families
2. Preserve and revitalize the $80 billion investment in public housing
3. Restore deteriorated urban communities, including housing, educational facilities, and programs for job creation.
Program area: Urban development
Program-remedy: 1. Restore budget cuts in housing subsidy programs
2. Develop fiscal policies and mortgage assistance programs, to encourage the building of rental housing, and the buying of homes
3. Modify policies of Federal Housing Administration and Veterans Administration to assist first-time buyers
4. Fund sufficiently programs designed to revitalize deteriorated urban neighborhoods or construct new housing -- National Community Housing Partnership program.
Program-prevent: National economic development strategy to include the need for the supporting urban infrastructure.
Cost of program: -
Beneficiaries: Young families; underprivileged minorities; homeless people.

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