Let's Get Frank About Our Housing Issues

When it comes to affordable housing in America, our federal policies have misled,  ignored, and neglected our most vulnerable low-income citizens, said U.S. State Representative Barney Frank of Massachusetts at a conference on Friday.

Mr. Frank serves as chairman of the House Financial Services Committee. More recently, he has been at center of the controversy over the subprime crisis (you may remember this face-off with Bill O'Reilly that became an Internet sensation).

During opening remarks at a Massachusetts housing conference, he outlined the three areas where our nation's housing policy has gone terribly  wrong, according to an article by the Worcester Telegram & Gazette:

1. We have allowed affordable housing units to be lost while no new ones were constructed.

Many low-income residents must rely on federal housing vouchers to help with rent, but there is not enough appropriate housing to meet the demand and not enough housing under construction, Mr. Frank said. The federal housing voucher program supplements rent payments for about 1.7 million low-income families and individuals.

Because the voucher program relies upon existing housing rather than building new developments, it is the least costly strategy for making housing affordable to low-income families, according to the Urban Institute.

"There is a shortage of affordable housing in the United States," Mr. Frank said. "Vouchers without a construction program is half of a program. ... For 12 years there has been no federal program for construction of affordable housing.

2. We allowed individuals to take on risky mortgages they could not afford

"People who are considered lower-income were told that the solution to their problems was to own their own homes, even if they couldn't afford to do that," Mr. Frank said. "From 1995 until last year, federal programs to help family housing were shut down. The attitude - just buy your own - was like Marie Antoinette saying, ‘Let them eat cake.' "

He said the flood of subprime mortgages, which led to the record foreclosure rate and collapse of the housing market, was a result of a lack of regulations. Now, Federal Reserve Chairman Ben S. Bernanke has placed some controls on subprime and exotic home loans, and about $1 billion a year from the Federal Home Loan Mortgage Corp. and Federal National Mortgage Association will go into the Affordable Housing Trust Fund to help low-income families obtain housing.

3. We have not done enough to help house the homeless.

"The policy we have followed has so starved affordable housing and so diminished the resources available for the homeless that we've ended up in a situation where we're pitting the homeless against each other. Shame on a society as rich as ours that allows that to happen. And I guarantee you that if we get the right administration, we will put an end to that."

Of course, whenever we talk about ending homelessness and creating affordable housing, the same question is inevitably asked: "How are we supposed to pay for this!?" Mr. Frank provided a really great response to this question:

I was in Congress on September 10th, 2001, and there was no money in the budget for a war in Iraq. Since then we have spent over $600 billion on the war in Iraq. … I’m going to go to the guy who found the money for the war in Iraq, and ask him to please find us about 5 percent of that to take care of the homeless.

(Funny he doesn't mention the $750 billion bailout...)

In any case, he's right. In a country as wealthy as the U.S., it is unfathomable that there are people without a decent, safe, and affordable place to live. Given the huge role housing plays in our lives - whether we have it or not - achieving this goal must be a national priority. It is simply too important to ignore.