Literature Review

Affordable Housing in the United States: A Review of the Literature

Abstract

Affordable Housing is an issue to many homeless people in the United States or those with low income and moderate-incomes’. This research will talk about El Paso’s way of getting affordable housing and what the city and government is doing to create affordable housing for those without a home in El Paso and in the Nation. It will give a brief summary of how jobs can increase due to Low Income House Tax Credit LIHTC and how it will help the community by creating more resources and preventing families to be homeless. A brief summary will be given about the Fair Housing Act and how the policy is helping many people that are having trouble finding a house or getting a house due to segregation.

                                        Affordable Housing in the United States

As the population of the United States has dramatically increased over the past years, the demand for housing has also increased. The recession, lower gross income are some of the factors that have caused the market of affordable housing to grow. To prevent homeless families the government has created several programs and acts such as the Fair Housing Act. Some people have a misunderstanding of the meaning of affordable housing and they believe it means renting an apartment of that it only segregates a certain kind of people. To have a better understanding about affordable housing in the United

States the following questions will be answered:

Which ethnic group(s) are more likely not to afford a house in the United States?

What are the consequences if housing becomes more affordable for Americans, will taxes increase on the property?

What are the benefits of affordable housing?

What is being done in El Paso to create more affordable homes?
The following review on literature will focus on these questions and will provide information about the bad effects of affordable housing and how it affects U.S. citizens.

Which group(s) of people are more likely not to afford a house in the United States?

Many citizens of all races and color are struggling to afford a house in which to live in due to discrimination. In result, there have been many acts that have been passed to protect people from discrimination and inequality. Many of the HUD like Secretary Donovan and other affordable housing advocates all across the U.S. have been demanding for these housings. Though they demand it, no action is ever taken. It is only being overlooked at due to the low-income people, that live in project developments or vouchers. Therefore, those actions are causing residential segregation of people of color, families with children, and people with disabilities (Smith, 2011). According to the editor Shanna Smith the Fair Housing Act was passed and signed into a law in 1968 just seven days after the assassination of Dr. Martin Luther King, Jr.

The government created the Fair Housing Act to create an equal treatment to all individuals and stop discrimination against homosexuals, blacks, Hispanic, disabled, etc. The Fair Housing Act helps individuals to have an better and equal opportunity of renting or buying a house without being judge due to their appearance or problems. Many people do not know about the existence of the act and they believe that due to their conditions they will never have the opportunity to obtain a house. The Act opened the doors to many people who were destined to live in a certain area due to their race or color and now they have the opportunity to buy a house wherever they want. This was the start of social integration between different kinds of people.

Comparing inexpensive housing in El Paso to other affordable housing in city/ state’s around the nation finding the more manageable house and price?

In the past the government has created many programs which has helped many Americans to purchase or rent a house. In order to create more houses for low income families, there needs to be some founding from a new source that will be destined only to create affordable houses. An option that the government has is to decrease the taxes on property that is destined for families who have a low income and increase the taxes on corporations or families with a high income like the Tax Reform Act of 1986 did when it was enforced.

Due to the economic depression the gap between high income households and low income households has become larger. In 2009 President Barack Obama signed the Recovery Act. According to the editors Novogradac, Graff and Pinoli state that “ The grants that can then be used to finance buildings that qualify as low-income buildings under Internal Revenue Code Section 42” (Novogradac, Graff and Pinoli, 2009) The grant money can be used to create housing projects which will increase the supply of affordable housing. In addition, the low income families will have a higher variety of low income housing and it will give them a better opportunity to obtain an affordable home.

What are the benefits of affordable housing?

Affordable housing benefit’s the community in various ways, for example, creating employment. According to Keith Wardrip, Laura Williams and Suzanne Hague the editors of “ The Role of Affordable Housing In Creating Jobs and Stimulating Local Economic Development” share the idea that the creation of the 100 unit family unit immediately creates about 70% of jobs in construction and about 15% on Wholesale and Retail Trade. After families settle in the property, about 13% of jobs will be generated in the areas of health, education and social services and the construction jobs will decrease to about 3%. The editors also show a graph from the National Association of Home Builders which is shown below, supports the idea of the creation of jobs. The people who will be living on the LIHTC property will be sustaining the jobs and due to their employment will be able to pay for their house.

Another positive effect that affordable housing has is that it can improve the community conditions. The journalist Watt Taylor explains that, “affordable housing is an important, but not the only, factor in the future of affordable housing and community development and more specifically the overall improvement of our communities” (Taylor, 2011). The creation of affordable housing will also help to create better resources for the community. For example, since the community is going to grow due to the creation of Affordable homes, other resources have to be created such as, hospitals, schools and grocery stores. The community will not be limited of resources and the population will grow. This will help by helping the families to increase their income.

The creation of more affordable housing can prevent more people to become homeless due to the appropriate prices of the houses. Many people lose their homes due to the high payments they have to give. The journalists Zoe Loftus-Farren explain that “in January 2008, an average of 614,414 individuals in the United States were homeless” (Loftus-Farren, 2011). Due to the recent recession, many people have been unemployed and they do not have the sufficient money to sustain their home and they become homeless. The creation of affordable housing also generates new jobs which give an opportunity for the homeless to be employed and acquire a home.

What is being done in El Paso to create more affordable homes?

Affordable Housing has been considered in El Paso, Texas in order to establish more homes for the soldiers that are coming back from Iraq and many people from Juarez, Mexico trying to escape the violence across the border. Ike Monty, president and owner of Investment Builders wants to build a 156-unit apartment complex on the West Side for low-to moderate income residents, with the help of $17 million in federal tax credits. The company has built 21 low-income apartment complexes with 1,000 units in El Paso in the past 15 years. Monty wants to construct units during December of 2011 or January of 2012 on the West Side in El Paso, Texas. Monty needs the tax credits to finance the $15 million so he can meet the deadline.

Conclusion

Affordable Housing has been a problem in the United States, because there are not many houses for families that have a low income. In the past the government has created many acts to help create more affordable houses such as the Fair Act which has helped to end segregation and the Low Income Housing Tax Credit which has helped to give an opportunity for home buyers to purchase a house. By building more affordable houses there are two positive effects that help the community, for example, creating more jobs and keeping homeless people away from the streets.

 

Annotated Bibliography

Kolenc, V. (2011, October 02). Builder wants tax credits for affordable housing. Retrieved from
Loftus-Farren, Z. (2011). Tent Cities: An Interim Solution to Homelessness and Affordable Housing Shortages in the United States. California Law Review, 99(4), 1037-1081. Retrieved from EBSCOhost.

National Association of Home Builders. 2010. The Local Economic Impact of Typical Housing Tax Credit Developments. Washington, DC: Author.

Novogradac, M. J., Graff, G. A., & Pinoli, N. R. (2009). Low Income Housing Tax Credit Provisions of the Recovery Act of 2009: Tools to Close Financing Gaps in a Weak Tax Credit Equity Market. Journal of Affordable Housing & Community Development Law, 18(4), 463-495. Retrieved from EBSCOhost.

Smith, S. L. (2011). Incorporating Fair Housing into Affordable Housing Policy and Programs. Journal of Affordable Housing & Community Development Law, 20(2), 235-237. Retrieved from EBSCOhost.

Taylor, W. (2011). Future of Affordable Housing & Community Development. Journal of Affordable Housing & Community Development Law, 20(2), 145-147. Retrieved from EBSCOhost.

Wardrip, K., Williams, L., & Hague, S. (2011). The role of affordable housing in creating jobs and stimulating local economic development. Retrieved from http://www.nhc.org/media/files/Housing-and-Economic-Development-Report- 2011.pdf