Box 22, Folder 19, Document 6

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Box 22, Folder 19, Document 6

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T e desire to own a home is a basic part of our tradition. Today 62% of American families hav
· 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 toward
society. Instead of feeling like frustrated and helpless transients floating along in the poverty
and fil th of the slums, they could begin developing a sense 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, provid ing these low-income househo lds with home-ownership assis tance would merely
be giving them the same advantage we already ext end to millions of middle-income and upperincome households. These households now receive a large subsidy in the form of federal income
tax deductions 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% o f our families. This is doub le the housing
subsidy we extend to the poorest 20% in the form of all public housing payments, we lfare paymen ts,
and tax deduc t ions combined. Clearly, tax deduc t ions aren't much help to families with little or
no taxable income. So simp le justi ce demands tha t we encou rage home ownership fo r them in some
o the r way mo re su ited to thei r needs .
Therefore, we recommend enactmen t o f a pi lo t program o f aid to low- income fam il ies to he lp them
ach ieve home owne rsh ip . This prog ram shoul d concen t ra t e upon slum dwellers because they now
ha ve th e least o ppo rt un ity to own dece nt homes, a nd because it would he lp im prove slum li v ing
condit ions. in g enera l. Th e prog ra m shou ld ass ist slum residen ts ei ther to move out o f slums by
buy ing hom es e lsewhe re, o r to acq uire owne rship o f new ly reh a bi lita t ed units in neighbo rhoods
whi c h a re be ing up- graded throug h a wi de va riety o f ot her prog rams too - - as in the Mode l
Cities Prog ram . Th is ho me - own e rsh ip p ro gra mwou ldhe lp low -in come fa mil ies b uy sing le fa mi ly
ho uses, indiv idua l uni ts in mul ti-fam i ly con dom in i ums; o r apa rt men t buil dings wh ich t hey
o perated a s resident lan dl o rds -- rep lacing absen t ee lan dl o rds w ho had neg lec ted t heir
ro perti es .
~ Several ty pes o f a id wou ld be invo lv e d in th is prog ram . First, the slum housi ng un its involved
would be substandard ones reha bilita ted by a publi c agen cy o r a non - profit gro up be fore being
sold·to nf:N.I owners. Second , below-mark et-rate loans shou ld be use d to fi na nce owners on a
no-downpayment basis. Third, potential ow ners should recei ve advanced training in the skills
of minor mai ntenance, fi na ncing, and other respon sibilities 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 to
buy back the housing involved during a fixed period in case the owners could not carry the
required burdens.
�A Pilot Program to .Promote Home Ownership Among Slum Residents
Page 2
A pilot program incorporating these devices could be undertaken for 10,000 units at on annual
cost of about $5.1 million for rent and ownership subsidies, plus a reservation of $125 million in
below-market-rate (3%) loan funds, plus admin istrotive costs. These figures assume that ownership opportunities would be extended to even the lowest-income families.
This program would improve the life of slum residents in several ways besides allowing them to
become home-owners. Many would take much better care of their properties and develop a
stronger interest in good neighborhoods. Even landlord-tenant relations might improve because
resident landlords would replace absentees. Hence conditions in slums might be significantly
improved even for people not involved in the program.
In our opinion, this is a prosram solidly in the American tradition, and well worth trying.

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