Commentary: Housing Balance

What is the purpose of housing? Is it a place where you can express your personality? Is it an interchangeable investment to use like corporate stocks? Is it a place to build memories of childhood and family? Is it a necessity to keep the population safe and well? Is it a tool to provide profits for developers and legacies for elected officials?

The Federal Reserve’s March 6, 2008, release of home equity information should be bringing the question of housing to the forefront of talk shows and news reports. Americans now owe more debt on their homes than they own equity. Indeed, this has been the case for three straight quarters. Moreover, it is the first time there has been negative net worth in homeownership since the Fed started keeping statistics in 1945.

Government’s interest in housing is to generate income for providing infrastructure and services and to provide space for the population to be safe from nature. In some circumstances, housing can range from cots in a homeless shelter to an 8,000 square foot house.

People may view housing as a status symbol, an investment to sell at a market’s peak, a home to live in for generations, and/or individual liberty. Zoning laws, property taxes, sidewalk requirements, and other impositions often are seen as intrusions.

The current data from the Federal Reserve should raise serious and long-range discussions about the efforts of the federal government to push homeownership and to reward frequent selling, all in the name of wealth building. Perhaps this time the discussion can include what individuals want out of their housing instead of merely how developers can be given benefits to build more houses. Can we provide the needs of individuals and families by building smaller houses, by building larger apartments, by reducing new development and by rehabilitating older buildings? Can we meet the housing needs of individuals and families by improving wages and by giving more respect to renters. (Have you ever tried to recycle water bottles while living in an apartment building in Des Moines?) Can we lower the housing costs of property taxes by reducing sprawl so we spend less on salt and overtime for winter road care and less on eminent domain to build more road lanes?

There is much information of interest in a 2007 report on Affordable Housing in Iowa, not the least being the numerous programs for and statistics about housing in the past and in the present. At the heart of all this information is the definition of affordable housing. As it has been for decades, the definition is set at 30% of gross income. More recently, low-income households have included those with incomes at 80% of a community’s median income.

Many housing activists, myself included, find 80% of median to be ridiculously high. Government favors the 80% mark because more households are likely to qualify for mortgages even without assistance. However, at 30% of median, families begin to need help to meet the low-end of rental costs.

M.R. Field is editor of Leading Voices: Iowa.