Cities take on housing crunch, creatively

Home may be where the heart is, but for working Americans like New York City Fireman Ricardo Sosa, it's becoming increasingly difficult to pay for.

Even with the second income of his wife, Gladys, Mr. Sosa had almost despaired of ever owning a home in south Brooklyn, where he grew up. But the couple and their two kids now live in a renovated two-family home there, thanks to a public-private partnership to help more New Yorkers pay for homes.

The effort here - expanded recently when Mayor Michael Bloomberg announced a $3 billion affordable-housing program - mirrors a growing trend nationwide. Facing a deepening affordability crisis, cities and states across the nation are getting creative:

• Kentucky is using unclaimed lottery funds to build homes for low-income people to buy.

• Massachusetts, Maine, and Connecticut are collaborating with the National Trust for Historic Preservation to renovate crumbling and abandoned homes for working people.

• Mayors in the Chicago area are offering incentives to employers to help their lower- and middle-income workers with housing costs.

"Affordable housing is fundamental to our long-term economic prosperity," says New York Mayor Bloomberg. "Because we don't have the resources we need now, we have to be as creative as we can."

New York City's new program will build or rehabilitate 65,000 new units. The initiative is the largest in a decade. But instead of a massive infusion of public money, it relies on creative public financing to leverage private-sector investments.

In 2001, more than 14 million American families, or 1 in 7, had a "critical housing need" - which means they pay more than half their income for a place to live, or they reside in dilapidated, decaying houses.

The most affected are working people, like Sosa. In 1997, roughly 3 million low- and moderate-income American families had a critical housing need, according to the National Housing Conference, a nonprofit policy analysis organization in Washington. By 2001, that number jumped to 4.8 million - a 60 percent hike.

While the problem is the worst in the Northeast and West, where the 1990s boom pushed up housing prices, it's spreading fast to the Midwest and the South.

"It's a pervasive problem in all areas of the country," says Barbara Lipman, director of research for the Center for Housing Policy, the research arm of the National Housing Conference. "It's a problem for your hard-working neighbors, not just urban renters. It's affecting suburban homeowners and rural areas as well."

Mr. Sosa's story illustrates the problem as well as the success of some of the creative solutions devised to deal with it. His wife works for the police department, and their two kids go to public schools. During the past decade, the couple watched rents rise around them and knew they soon wouldn't be able to afford their own home. But they saw an ad from the nonprofit Neighborhood Homes Program that had a small number of affordable homes for sale.

They were a part of a program in which local nonprofit groups, with seed money from the city and support from Citibank, were able to renovate decaying homes and offer them at a reasonable price. The catch: There were so few available that Sosa had to enter a lottery for the chance to buy one. He was selected, and a year ago he and his family moved into a home in Park Slope.

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