How to Increase Low-Income Homeownership Without Subsidies
A recent study published by the Urban Institute discusses how the current system of low-income housing assistance is strongly biased against homeownership for low-income households.
An interesting section of the study explains why programs that subsidize the construction of new units, or that require recipients to buy from selected builders, generally involve excessive costs. It also makes the assertion that we can increase the supply of affordable housing without resorting to subsidized construction, even in the tightest housing markets.
The paper also presents two cost-neutral approaches for reducing the anti-homeowner-ship bias. The first approach would provide Section 8 first-time home buyers with a down-payment subsidy and offer portable vouchers to all families living in public housing projects and in private subsidized projects. The second approach would gradually convert the Low-Income Housing Tax Credit for rental housing into a refundable homeownership tax credit for low-income households.
One of the central goals of Portland and Multnomah County’s Ten Year Plan to End Homelessness is the creation of 2,200 Permanent Supportive Housing units for homeless individuals. If local officials truly seek a permanent solution for the homeless here, they should seriously consider using these two new Urban Institute concepts.
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