Ever since American colonists set up "poor farms" as shelter for their most destitute neighbors, government in this country has intervened in the housing market. The latest such venture is President Clinton's plan to give more "housing vouchers" to low-income Americans.
His plan is another step away from the woeful experiments of the 1960s to put poor Americans in public housing projects where they are often isolated and socially traumatized.
If Congress approves the $690 million expansion of the voucher plan, recipients could live in commercial apartments that fall within a certain price range determined by the median rent in an area. In most cases, they would pay a third of their income toward rent. The voucher would make up the difference between the recipient's share and the commercial rent. The acceptable price range is recalculated annually to account for changes in rental markets.
Mr. Clinton rightly emphasizes that using this market approach to meet a social need can help families move from economically depressed areas to places where jobs are more plentiful. Often, that means the suburbs. It also offers social mobility, allowing families to find safer streets and to send children to better schools.
At present, 5.3 million Americans families can't find affordable housing, and most must live in public housing projects. In some states, public housing, like welfare, is considered only a transitional stage and people are nudged toward finding work that pays for self-sufficient living.
The voucher program will unleash a new consumer demand for housing that should spur the housing market to build more apartments. In tight housing markets, however, the government will end up paying more for vouchers to allow low-income families to live in commercial housing.
A low-income tax credit that encourages builders to get into the lower end of the housing market can increase the stock of affordable dwellings. But such programs need to be revved up. First of all, Congress must act quickly this year to renew the tax credit, which has strong bipartisan support.
(c) Copyright 2000. The Christian Science Publishing Society