This has led to a strange disconnect between the presidential campaigns and national reality. Sub-prime lending and the ensuing foreclosures are being blamed for the crisis, but the problems and blame go much deeper. The fact is, our nation does not have a housing plan, and has not had one for years.
The lack of a plan can be seen in routine under-funding of the U.S. Department of Housing and Urban Development (HUD), whose 2008 budget does not have enough money to maintain contracts on its current stock of affordable housing. It is $2 billion short and needs to borrow money, which pushes the problem onto the next administration.
Everyone now knows that too much deregulation and low interest rates contributed to a speculative housing bubble, but it also widened the mismatch between the nation's housing stock and the public's needs. It caused overproduction of unaffordable condominiums, with the conversion of rental housing into condos forcing thousands of renters from their homes. It also pushed up property taxes, pressuring existing homeowners.
Today, there's a glut of vacant condos even as many families are doubling up or kids are moving back in with their parents. Unsurprisingly, speculative markets turned out to be a lousy way to provide housing security for millions of Americans.
A study by the Joint Center for Housing Studies shows housing is becoming increasingly unaffordable. In 2005, 37.3 million households paid more than 30 percent of their income to housing, and 17 million households paid more than 50 percent. Many people worried about their housing work full-time; one in five are seniors. Poor people fear they will end up homeless. On any given night, at least 750,000 are homeless, many of them mentally at risk, about half of them children.
Housing is far too important to the nation's health and well-being to be left exclusively to the whims of "the market." Government must play an appropriate role in ensuring that everyone has safe, affordable housing. Presidential candidates asking for our vote should have a plan for how their administration would accomplish that. Yet none of the remaining candidates has an issue position on campaign Web sites regarding housing policy.
What would a sound housing policy look like? Here are some crucial elements:
First, more rental housing is needed. Rentals provide homes to many low- and moderate-income households, yet little new rental housing is being built. The private sector has focused almost exclusively on the home buyer market, and government activity mostly is producing replacement housing for what has been torn down. Federal, state and local governments should partner with the private sector to increase incentives for building affordable rental housing.
Second, affordable housing can be increased by expanding nonprofit housing. Nonprofit associations, which develop and manage affordable housing as a private, social-oriented business, have been successful in Europe but are barely a blip here. In Europe, it is common for a nonprofit to manage more than 20,000 units, substantially more than most comparable U.S. entities. In London, 25 to 35 percent of new units are required to be "affordable." All help keep the cost of housing down.
Third, any new housing policies must include increased oversight of lending practices. Limits must be placed on the credit industry to prevent exploitative practices. Far too many have been hurt by a wildly unregulated mortgage market.
Our nation needs a serious, sustained debate on housing, yet the candidates have been deafeningly silent. Proclaiming to be an agent of hope and change is fine, but the devil is in the details. This presidential campaign offers a perfect opportunity to put forward a multifaceted national housing plan to counter the tragically flawed policy that has left our economy and people at risk.
Steven Hill is director of the Political Reform Program at the New America Foundation (newamerica.net). John Bartlett is executive director of the Metropolitan Tenants Organization in Chicago (tenants-rights.org).