A Growing Housing Crisis for the Very Poor

Jul 16, 2001

Since 1996, a growing number of landlords who receive federal subsidies to house very poor people–mainly the elderly, disabled and single parents with annual incomes of less than $9000–have been allowed to pull out of these programs in order to take advantage of quickly rising market rents. Thousands of the very poor have already lost apartments and been forced into much worse living situations. Over the next five years, these numbers are expected to skyrocket, as federal subsidies for 1.3 million units that house 2.5 million people are set to expire.

Most of these subsidies come out of HUD (the Department of Housing and Urban Development) which was formed in the mid-1960s, when the major urban uprisings that came out of the black movement shook the entire country. This vast social movement wrenched a series of reforms from the ruling class and the government. Among them were programs to provide more affordable housing for the poor, which HUD administered.

But as the movement receded, HUD money was used increasingly to subsidize the profits of big landlords and construction companies. By the late 1970s and early 80s, recessions had battered the housing market in many parts of the country. Under the guise of funding a housing program for poor people, HUD stepped in with large subsidies to the biggest realtors and construction companies. Then, HUD paid the landlord to fill the buildings by subsidizing the rents of lowincome tenants. Tenants paid 30% of their monthly income to rent, and the government covered the rest, therefore awarding relatively high rents to the landlords.

Certainly, this program helped the poor tenants who were able to get in, although usually less than half of those eligible ever benefitted from this program. But even more importantly, it guaranteed the landlords a big profit at a time when their markets were depressed.

Today, however, a lot has changed. Much of the housing stock for the very poor has deteriorated and disappeared, and the government has torn down the few public housing projects that still exist. As a result, vacancy rates are approaching historic lows in many parts of the country, providing bigger possibilities for landlords to jack up the rent. So, having made big money from the HUD subsidies, many landlords now are looking for even bigger profits by throwing the poorest tenants onto the streets.

In Los Angeles and Orange Counties in Southern California, for example, the vacancy rate has shrunk to less than three%, and rents have been increasing at double digit rates. Since only one lowincome unit exists for every four households that need one, landlords have found that they can greatly increase their profits by dropping their tenants with rent subsidies. Often by renting to new tenants they have been able to instantly double their rents. Since 1996, one out of every seven tenants in subsidized apartments in Southern California has been pushed out. Within the next five years, a much larger number will be put on the streets.

Thus, the government housing programs that were supposed to help the poorest and most vulnerable sections of the population are being cut back at precisely the time that they are most needed–once again to the great profit of the landlords.