Ticking Time Bomb
During the Reagan years, state and local governments throughout the country have struggled to cope with dramatic cutbacks in federal funding for low-income housing. Most have lost ground.
This is particularly true in communities with fast-growing populations and exceptionally high housing prices, such as San Diego.
The San Diego Assn. of Governments (Sandag) estimates that at least 130,000 households in the county need, and are eligible for, some sort of financial assistance to be able to reasonably afford decent, safe housing. Need is strictly defined--a family of four, for example, can qualify only if its income is less than $27,600 a year. But assistance, mostly federal, is available for only about 40,000 of those 130,000 households.
In a recent progress report on the problem, Sandag said assistance was added for 5,529 of those households in 1986 and 1987, a considerable improvement over the 1980-85 period when only 8,761 households were added. In large measure, this can be attributed to an increase in local programs, which accounted for 3,390 of the 5,529.
But San Diegans cannot take much solace in those numbers, because almost all of the progress made in the last eight years is in danger of being wiped out. Federal programs that paid for much of San Diego’s low-income housing are expiring, and replacing them will be very costly.
Specifically, about 6,400 of the county’s low-income housing units have been built by private developers with very low-interest loans from the federal Department of Housing and Urban Development. As part of the deal, developers guaranteed that the housing would remain low-income for the life of the loan.
But a little-noticed provision allows owners to pay off the 40-year loans after 20 years. The earliest of those loans are now reaching the 20-year point. One local apartment owner has filed notice with HUD of her intention to sell. How many others will is unknown, but housing officials predict that the high rents commanded by San Diego apartments will make prepayments particularly attractive here.
In addition, federally funded rental assistance to about 7,500 more households in the county is due to expire in 1990, and additional funding is not assured.
Congress has taken steps to stall the mortgage prepayments until 1990. That buys federal, state and local officials a few precious months to figure out a package of incentives to encourage the owners to keep their units low-income or to come up with ways for public agencies or nonprofit organizations to buy them.
But, as Sen. Alan Cranston has said, this “will be the most insistent housing problem for Congress over the next decade.”
It is sure to be for local officials as well. While the bricks of the solution will have to be provided by federal and state government, the mortar will have to be applied by local officials.
Although the owners are well within their rights to prepay, if it makes good business sense for them, local housing officials have a responsibility to ensure that as many of the units as possible remain available to low-income families.
Thus far, however, little local attention has been focused on the problem. This needs to change.
Local housing officials need to come up with strategies to augment and/or implement possible federal programs and they need to build support among community leaders. Housing officials also need to work with the property owners to find out how many plan to prepay and what incentives would be necessary for them to keep their units open to low-income families.
This is a tall order, but almost one-third of the county’s low-income housing is in danger. If the problem is not addressed quickly, thousands of poor families, many headed by single parents, could be forced into the streets in the next few years.
One bright spot on the housing horizon: The San Diego Housing Commission, one of the two main housing authorities in the county, has begun to pull out of its troubled era. A new executive director took over Aug. 1, and he appears to have a strong working knowledge both of the problem and the potential solutions. Evan Becker has been given high marks for being a hard-working, strong manager who is honest and sincere.
Surely all of those qualities will be tested as the magnitude of this problem unfolds.
