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Poor families run out of rental options as costs eat up checks

By Tony Pugh
McClatchy Newspapers
Published on: 07/23/07

Washington —- Growing numbers of the nation's poorest households are using more than half their earnings for rent while waiting years for federal housing assistance that may never come.

The phenomenon is largely playing out in urban and suburban areas, but has exploded recently in rural areas.

A new report by the Department of Housing and Urban Development found that 6 million impoverished households used most of their monthly earnings for housing or lived in substandard conditions in 2005, an increase of 16 percent, or 817,000 families, since 2003.

The number of rural families facing this dilemma grew by 51 percent to nearly 1 million households over the same two-year span.

At the same time, these struggling households saw their average monthly incomes decline while their average rent payments increased.

Despite the squeeze, these 6 million families received no federal rent assistance from HUD. In fact, federal housing assistance reaches only about one in four income-eligible households.

"The demand for assistance goes significantly unmet," said Sunia Zaterman, executive director of the Council of Large Public Housing Authorities.

In fact, a family with only one full-time minimum-wage earner can't afford a standard two-bedroom apartment anywhere in the country, the Harvard University study found.

Rosalinda Santana, 23, a single mother of two in East Hartford, Conn., lost her hotel housekeeping job after taking two weeks off to care for her sick son because she couldn't afford a baby sitter.

While she looks for work, she's putting the bulk of her $563 monthly unemployment insurance check toward her $750 rent. She faces a two- to three-year wait for a slot in the "Section 8" Housing Choice Voucher program, the nation's primary rent assistance program for low-income families. Santana's landlord has been patient about her unpaid rent.

While some view housing assistance as welfare for the poor, the nation's largest housing subsidy by far is the federal mortgage interest tax deduction. It's projected to provide U.S. homeowners an estimated $75.6 billion in tax breaks this year, and most of that relief will go to higher-income families.

Voucher recipients, most of whom are elderly or disabled, pay 30 percent of their earnings for housing and utilities —- an average of $280 per month —- while the government subsidizes the balance of housing costs up to a specified amount.

But long waiting lists for the program are common.

Making matters worse, Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard, estimates that 200,000 affordable apartments —- in which tenants pay less than 30 percent of their income for housing and utilities —- are lost in the U.S. each year.

For every new affordable housing unit constructed, two are demolished, abandoned or become expensive rentals, according to the John D. and Catherine T. MacArthur Foundation.

Other affordable apartments are lost when building owners opt out of a HUD "Section 8" program that guarantees rent payments to owners who lease to low-income tenants. More than 118,000 HUD-subsidized apartments have been lost that way since 1997.

When the owner of Dorothy Paul's HUD-subsidized townhouse in Washington decided in 2002 not to renew the subsidized-housing contract, Paul tried to buy the home for $106,000, which was the fair market price at the time. But the owner balked at the deal just as property values took off throughout the city.

Five years later, Paul is still in litigation to enforce the original sale agreement, but the home could now fetch well more than $400,000.

"All I can do is keep fighting until they say it's over. I don't know what else to do," she said.