Housing Looms as a Key Item as Conventions Start : Democrats Tell Stand; Bush to Announce His

For the first time since President Lyndon B. Johnson called for massive spending on public housing as part of his “War on Poverty” in the mid-1960s, housing will be a key topic when the Democrats open their National Convention on Monday.

The gathering in Atlanta comes as Democratic presidential hopeful Michael Dukakis is stepping up his attack on the Reagan Administration’s housing policies, charging that they have prevented millions of Americans from finding affordable housing and forced many of the nation’s poorest people to live in the streets.

Experts say Dukakis’ renewed criticism has also increased pressure on Republican candidate George Bush to lay out detailed plans explaining how a Bush Administration would attempt to resolve the nation’s housing problems.

Details Due This Week

Alixe Glen, a spokeswoman for the Bush campaign, said the vice president will provide details of his housing policy later this week. The Republican convention will not be held until mid-August, in New Orleans.

“As a presidential campaign issue, housing has been unanimously ignored by both parties for more than 20 years,” said Sanford Goodkin, executive director of the San Diego-based Peat Marwick/Goodkin Real Estate Consulting Group. “Now that’s beginning to change.”

Much of the new-found concern has been prompted by the increased visibility of homeless Americans. While Reagan Administration officials have said that 350,000 or so citizens have no place to live, private studies have said the number may top 3 million.

But observers say housing matters are also becoming popular campaign topics--especially in the Dukakis camp--because blue-collar workers and even some professionals are now suffering from a housing crunch that once affected only low-income people.

‘Decent Place to Live’

The Democratic committee charged with drawing up a party platform has already drafted a wide-ranging housing plank that calls for “steps to ensure a decent place to live for every American.” Republicans have yet to approve a housing plank.

Among other items, the Democrats’ plank calls for more help for first-time buyers, renovation and expansion of the public housing stock and greater efforts to get employers and nonprofit agencies involved in solving the nation’s housing problems.

The plank also echoes Dukakis’ call for creation of “housing partnerships,” in which private-sector companies would team with state and local governments to build homes that low- and moderate-income families can buy or rent.

Dukakis, governor of Massachusetts, believes such partnerships would let local housing agencies and private builders tailor programs to meet the unique characteristics of their neighborhoods.

Partnership Programs

The proposal is a marked departure from the approach taken by previous Democratic administrations, which emphasized construction of federally funded low-income housing projects and tight regulatory control from Washington.

Dukakis has already launched two widely praised partnership programs in his home state. One helps people buy homes, and the other encourages construction of affordable rental units.

At a recent Boston press conference, Dukakis--standing before a row of townhouses built through one of the programs--pledged to commit $3 billion for similar projects nationwide if he is elected president.

He did not say where the funds would come from, but indicated some of the money might come out of the defense budget.

Few Details Given

Although Vice President Bush also has said he’d like to see state and local governments have “more flexibility” when it comes to housing low- and moderate-income families, he has provided few details on how that would be accomplished.

Glen, the spokeswoman for the Bush campaign, referred a reporter’s questions to the candidate’s housing strategist. The strategist did not return repeated telephone calls.

So far, the vice president’s discussion of housing-related issues has centered on the role that a strong economy plays in providing home ownership opportunities. He notes that interest rates are far lower than they were when President Reagan took office in 1981, and that millions more Americans are employed.

Bush also has talked about the importance of retaining tax deductions that homeowners can take for mortgage-interest payments, supported pilot programs that allow tenants in public housing projects to purchase their units from the government and has vowed to enforce the nation’s fair-housing laws.

‘Absolutely No Substance’

But some real estate experts say Bush’s public statements in support of affordable housing don’t truly reflect the policies that the Reagan Administration has pursued, and claim the vice president has quietly sat by as the federal government reduced support for a variety of housing programs.

“You can’t shoot any holes in (Bush’s) stance on housing because it has absolutely no substance,” said consultant Goodkin. “This administration has provided no initiative, no program and no leadership when it comes to housing.”

While it’s true that mortgage rates today are about five points lower than they were when Reagan took office, Goodkin says, the decline hasn’t solved the nation’s affordability problem.

In fact, the country’s “home ownership rate”--which measures how many households own their own home--peaked at nearly 66% in 1980. That rate has dropped every year since Reagan took office in 1981, reversing a 40-year trend.

Housing Budget Cuts

Bush’s concern about retaining deductions for home ownership has also been attacked, with critics noting that the vice president remained silent when Reagan signed legislation putting limits on such deductions earlier this year.

Meantime, public housing advocates complain that the federal budget for housing has been slashed from $30 billion a year in 1981 to about $8 billion today, and point out that only a small percentage of tenants eligible to purchase their public housing units have opted to do so.

Officials at the nation’s two largest real estate trade groups, the National Assn. of Realtors and the National Assn. of Home Builders, are reluctant to publicly support or criticize either candidate.

However, some of their members privately worry that if elected, Bush would revive a plan to sell the Federal Housing Administration--the federal agency that helps modest- and middle-income people purchase homes with down payments as small as 5%.

The Reagan Adminstration initially proposed selling the FHA a few years ago. Although no potential buyers were named, the government thought the agency might attract private mortgage-insurance companies, lenders or other financial-services firms.

The plan was quickly dropped after being attacked by some congressmen and housing trade groups. Related efforts to effectively double the size of the FHA’s required down payment were also scuttled.

Supporters of Bush say that less government involvement in housing may be beneficial. “The private sector almost always does things with greater efficiency and greater savings than the government,” said Bob Johnson, executive director of the International Real Estate Institute, an Arizona-based real estate trade association that has endorsed Bush’s bid for the presidency.

“If the government eases out of the housing business, the private sector will move in to fill the gap. The savings that would result in the long-run would filter down to consumers,” Johnson said.

Please see John Betz Willmann column below and related story on Page 6.