Low Income Housing: Affordable for Whom?

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Whether advocating relocation assistance for displaced
tenants, providing services to homeless families or working
on any anti-poverty effort, one reality will surely be the
biggest road block. Most “affordable housing” is too
expensive for low-wage workers.
More than one of every eight households in the county
has income below the poverty level; yet only 19% of those
households receive any help with the cost of housing. Is it
any wonder that every day more than 400 Champaign
County residents are homeless and close to half of the
homeless are children?
Many well-meaning people seem to think that homelessness
is primarily caused by substance abuse or mental
illness. Not so. The leading cause of homelessness is the
insufficient supply of affordable housing for the working
poor. To afford a cheap two-bedroom apartment in Champaign-
Urbana, a household must have an income of at
least $26,000 which is 47% above the poverty level for a
family of three. More than one-third of households have
incomes lower than that.
Sadly, our nation’s love affair with home ownership
plays a big role in causing homelessness. Given a choice
between spending $15,000 to pay the down payment for
one family to buy their first house or to subsidize rent for a
lower income family for 4 years, most government officials
will choose the down payment. Home ownership programs
help revitalize neighborhoods, eliminate blight, and provide
real housing stability for program participants.
The catch is that the local families helped with down payment
assistance usually have annual incomes of $35,000
or more while the households needing rent subsidy earn
half that amount or less. The U.S. Department of Housing
and Urban Development (HUD) uses the term “lowincome”
to describe households who earn 80% of the area
median income. For a family of three in Champaign County,
that’s $45,000 a year.
What about all the hard-working people who make
only $14,000–$16,000 a year at their full time jobs?
Where do they live?
The tiny supply of housing for the poor has been
shrinking at the same time that the need has grown.
Approximately 1,300 households in Champaign County
receive rent subsidies through the Section 8 program. That
includes the people who were forced to relocate from the
340 units of subsidized housing, both public housing and
privately-owned buildings that have been demolished in
the last fifteen years. The replacement housing for these
apartment complexes is called mixed income housing and
affording rents for even the “low-income” apartments
requires an annual income of about $26,000.
For example, Crystal View Town Homes, now under
construction to replace Lakeside Terrace Apartments in
Urbana, will have 7 market rent apartments, 35 apartments
that are affordable to households earning 60% of area
median income, 25 apartments for families at 50% of area
median and 7 apartments for those with income at 30%.
These percentages translate into dollar amounts of annual
income—$33,750, $28,000 and $16,875 respectively.
Since most apartments in Champaign-Urbana are
affordable for people who earn $28,000–$33,750 why are
federal, state and local tax dollars, including federal tax
credits for the developer, being poured into this project?
The same question can be asked about the other tax credit
housing complexes in our community. Oakwood Terrace,
Douglass Square, Towne Center, Prairie Green and Rainbow
Apartments are all considered low-income housing,
but a single mother with two children would have to earn
at least $13.00 an hour at a full-time job in order to afford
rent at any of these places.
The only real community benefit of these tax credit,
mixed-income housing complexes is that the owners are
prohibited from discriminating against people because
they use Section 8 housing vouchers to subsidize their
rent. The same 1,300 households in the local Section 8
program whose rent would be subsidized at any location
they choose, make up close to half the residents of the tax
credit apartment complexes. Without a Section 8 voucher,
no poor family could afford the rents.
It would be a lot cheaper if the government would just
ban discrimination against people on Section 8 and not
waste tax-payer money on subsidies for developers who
charge the same rents as dozens of landlords who get no
subsidies. When local government officials add up the
number of affordable housing opportunities for very low
income households, they usually double-count, adding
the 1,300 Section 8 vouchers in use to the number of socalled,
low income apartments that are being rented to
people with those Section 8 vouchers.
For more than 20 years, housing advocates have been saying
we need “minimum wage” housing. In other words,
housing must be developed that is affordable to people
who earn minimum wage and are among the 89% of people
in their income range who have no Section 8 voucher
and cannot get any other type of subsidized housing.
In the next couple of years, the Housing Authority is
going to ask the cities of Urbana and Champaign to be partners
in redevelopment (which means demolition) of the last
two public housing complexes for families in Champaign
County. Dunbar Court is a 26-unit complex in Urbana
where Wright Street ends just south of Bradley Avenue.
Joanne Dorsey Homes is a 67-unit complex at the intersection
of Bradley and McKinley which was totally rehabbed
with tax money fifteen years ago. The Housing Authority
will say this housing is obsolete, that concentration of low
income people in one complex is bad and both complexes
should be redeveloped as mixed income housing.
Isn’t it time that we ask why local tax dollars and federal
tax credits are going to private developers to build
replacement housing if the only poor people who can
afford the new housing are people whose rent is already
subsidized with tax dollars? Isn’t it time to demand that
government funding for affordable housing be used to
help the people who can afford no housing at all?

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