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A PILOT PROGRAM TO PROMOTE HOMEOWNERSHIP AMONG SLUM RESIDENTS
by Anthony Downs
The desire to own a home is a basic part of our tradition.
Today 62% of American families have achieved that desire. Yet there
are still millions of families who would like to own their own homes,,
but cannot. They are too poor to do so under present financing
arrangements. At least, half a million such households now rent
substandard housing in our metropolitan areas. A chance to own a decent
home of their own might have a profound effect upon their attitudes
towards society. Instead of feeling like frustrated and helpless we
transients floating along in the poverty and filth of the slums, they
could begin developing a chance of control over their own destiny.
They could gradually build a stake in their communities, and would learn
how to use and benefit from legal and political institutions they now
regard with hostility.
Furthermore, providing the Lagahoors household with home-ownership
assistance would now be giving them the same advantage we already extend
to millions of middle-income and upper-income households. These households
now receive a large subsidy in the form of federal income tax deduction
for the interest and property taxes paid on their homes. This subsidy
amounts to at least $1.7 billion per year for just the wealthiest 20%
in the form of all public housing payments, welfare payments, and tax
deductions combined. Clearly, tax deductions aren't much help to families
with little or no taxable income. Se simple justice demands that we
encourage home ownership for them in some other way more suitable to
their needs.
Therefore, we recommend enactment of a pilot program of aid to
low-income families to help them achieve home ownership. This program
should concentrate upon slum dwellers because they now have at least an
opportunity to own decent homes, and because it would help improve slum
living conditions in general. The program should assist slum residents
either to move out of slums by buying homes elsewhere, or to acquire
ownership of newly rehabilitated units in neighborhoods whoch will be
up-graded through a wide variety of other programs too -- as in the
Model Cities Program. This home-ownership program would help low-income
families buy single-family houses, individual units in multi-family
condominiums, or apartment buildings which they operated as resident
landlords -- replacing absentee landlords who had neglected their properties.
Several types of aid would be involved in this program. “Fiest, the
slum housing units involved would be substandard ones rehabilitated by a
public agency or a non-profit group before being sold to new owners.
Second, below-market-rate loans should be used to finance owners on a
no-down payment basis. Third, potential owners should recieve advanced
training in the skills of minor maintenance, financing, and other
responsibilities of ownership. Fourth, new owners from the lowest-
income groups would need a monthly housing supplement similar to the rent
supplement but applicable to ownership payments. Fifth, some tenants
in resident-landlord buildings would receive rent supplements. Sixth,
owners should receive follow-on counseling about financing, and repairs.
Seventh, the public agency running the program would agree ta buy back
the housing involved during a fixed period in case the owners could not
carry the required burdens.
In our opinion, this is a program solidly in the American tradition,
and well worth trying.