The Fair Housing Act

Most of the poor have some permanent residence. Although the quality of this housing may vary, they do have an address to call home. But some Americans have no address at all. Most studies indicate that unaccompanied men still comprise most of the homeless. Many are veterans, especially Vietnam veterans, and some have criminal histories. With the growth in single-parent homeless families, others suggest that there may now be nearly as many adult women as men in the homeless population. Estimates are that perhaps fifteen percent of the homeless population are children, but information on homeless children is particularly sketchy.

Families may constitute 25 to 40 percent of all homeless people, perhaps more in some areas, although some researchers believe these estimates are too high (Goering, 1986). The homeless people seem to be more ethnically diverse than in the past. Now almost all communities of any size have shelters for a broader cross-section of the homeless population. Some operate with government assistance, others with private support, or a combination of the two but credit likewise goes to the 1968 Fair Housing Act that took into account the diversity of the homeless population (DiPasquale and Keyes, 2000).

Housing policy in the United States, public and private, formal and informal, is perhaps the most pervasive remaining tool of racial discrimination. Segregation and discrimination have long been evident in the private housing market and in government housing programs. Section 235 of the 1968 Fair Housing Act became the largest single subsidized housing program and the most controversial (DiPasquale and Keyes, 2000).

According to the U.S. Civil Rights Commission, the Federal Housing Administration (FHA) contributed to the sale of inferior homes to blacks and others under section 235 by delegating too much authority to private industry, which had failed to comply with the spirit of the Housing act and other civil rights legislation (Goering, 1986).

Redlining has also contributed to inferior living arrangements for blacks and other ethnic groups. This practice occurs when a bank, mortgage company, home insurance company, or other enterprise refuses to finance or insure property in certain areas. Redlined areas are generally those occupied by poor and minority groups. Inability to obtain finance and insurance further depresses the community (Goering, 1986).

It is not only the private sector that has been accused of redlining. During the 1960s, the National Commission on Urban Problems charged the Federal Housing Administration with neglecting loans to poor and black people and with condoning policies that “aided, abetted, and encouraged. Neighborhood deterioration. Even today, the U.S. Conference of Mayors claims that redlining is to blame for the low rate of homeownership in urban areas where many members of ethnic minority groups live or forty-nine percent compared to seventy-two percent in suburban areas (DiPasquale and Keyes, 2000).

Studies continue to show that equally qualified blacks are twice as likely as whites to be denied home mortgage loans. African Americans face more segregation barriers in obtaining housing than any other ethnic group; Hispanics, and especially Asians, have fared considerably better in this regard. As slums grew renovated and populated by the whites, black Americans’ conditions worsened. These patterns are most evident in Manhattan’s Harlem and Brooklyn Heights’ Clinton Hill where smokestack industries once attracted young men with few or no skills to jobs that nonetheless paid well enough to support wives and children. Gentrification had made it difficult for African Americans and even other minorities to improve these conditions (Freeman, 2006).

Steering is another practice that contributes to segregation. It occurs when realtors fail to comply with the Fair Housing Act by showing blacks or members of other groups housing only in neighborhoods occupied mostly by those of the same race or ethnicity, and not providing the opportunity to see housing in other areas (Goering, 1986).

The city of Yonkers, New York, gained national notoriety in 1988 when it refused to implement a housing desegregation order, and Vidor, Texas, earned a similar reputation in 1993 when it failed to integrate a public housing complex. The problem extends well beyond public housing. Neighborhood integration could eliminate the need for busing and other aids, such as magnet schools, to encourage integration in public schools. In order to battle continuing housing discrimination, Congress in 1988 toughened the Department of Housing and Urban Development’s enforcement provisions under the Fair Housing Act and added protections against discrimination for people with disabilities and for families with children (Goering, 1986).

In 1997, HUD further stepped up its enforcement program. On a more positive note, in an effort to get their mergers approved, some of the country’s large banks “are making multi-million dollar pledges for improved fair lending programs to deprived neighborhoods,” and others have agreed to expand their programs in the wake of accusations against them (DiPasquale and Keyes, 2000).

The largest item in most household budgets is housing.  Whether it is the monthly rent or mortgage payment, housing consumes an increased portion of the personal budget. As far back as the Housing act of 1949, Congress acknowledged the need for a “decent home and a suitable living environment for every American family” (DiPasquale and Keyes, 2000). It is difficult for many Americans to realize the American dream, that is, owning a home. It is also difficult for many people to pay the rent (Goering, 1986).

A 1992 study by the Center on Budget and Policy Priorities found that many low-income households use half their income for rent and that in 39 of 44 metropolitan areas studied, housing exceeded the entire grant then received by AFDC (Aid to Families with Dependent Children) families. Using the federal government’s definition that housing is affordable if it does not exceed thirty percent of the household budget, in 1994, the nonprofit Low Income Housing Information Service said that one-third of renters in every state can’t afford the prices charged for a one-bedroom apartment (DiPasquale and Keyes, 2000).

In 1995, HUD reported figures of 43 percent of very low-income renters paying more than half their income for housing (DiPasquale and Keyes, 2000). Thirty percent of income is what residents of publicly supported housing are generally expected to contribute to their rent, even though the concept of shelter poverty by the Fair Housing Act indicates that this formula fails to take into account the various circumstances of individuals and families. Some families may not have enough left for other necessities after they pay 30 percent of their income for housing, while others may be able to pay more than 30 percent (Goering, 1986).

Federal rental assistance for poor or low-income families, including people who are elderly or disabled, falls under two main categories in the Fair Housing Act. The first is public housing. Most peoples’ image of public housing is large, high-rise projects, but today this construction tends to be of lower-density, low-rise type. About 1.3 billion households live in public housing; in 1996, their median annual income was $6,420 and they paid an average of $169 for rent each month (DiPasquale and Keyes, 2000).

The second main category of assistance is subsidized rental programs. Under Section 8 of the 1937 Housing Act, renters receive a certificate or voucher to seek their own housing which can be privately owned or publicly subsidized. About 1.4 million families are being assisted through this program. Waiting lists for these programs are long, and many eligible renters are unable to find qualified housing in the private market. A smaller program allows the government to pay subsidies directly to private owners who rent to low-income tenants (Goering, 1986).

The Fair Housing Act also had HUD to operate other programs to assist individuals and families in need, some of which focus on assisting groups such as Native Americans. Most HUD-sponsored programs are administered through locally operated housing authorities, and many states and communities offer additional assistance. There are also programs to help people with lower and moderate incomes purchase housing. Considerable federal housing assistance is given to middle- and upper-income households in the form of mortgage assistance and income tax deductions which amount to much more than the money spent on public and subsidized housing (Goering, 1986).

In order to help more people, past U.S. presidents sought funding that have allowed an additional number of households (50,000 in President Clinton’s term) to obtain rental assistance vouchers, especially those currently or recently receiving public assistance. The idea is to help them locate housing in areas (mostly suburban) where they can find employment. According to the Fair Housing Act, only one-quarter of public assistance recipients are currently served by subsidized housing programs (DiPasquale and Keyes, 2000).

The Fair Housing Act, HUD, and other governmental programs reach only a small proportion of those who could use help in obtaining safe, affordable, fair, and permanent housing. Unhappy with the number of people living in substandard and unsafe housing, nonprofit groups such as Habitat for Humanity (its most prominent volunteers are former president and first lady Jimmy and Rosalyn Carter) are constructing or rehabilitating housing for low-income, poor, and black individuals and families. Many of the beneficiaries contribute sweat equity (their own labor) to help build these homes. Most also make modest mortgage payments (DiPasquale and Keyes, 2000).

A fortunate circumstance in helping people obtain their own home is that a stronger economy has been accompanied by considerable drops in interest rates in the nineties. This made it easier to qualify to purchase a home, since lower interest rates mean lower monthly mortgage payments. In addition to federal mortgage assistance and the Fair Housing Act, communities use bond monies to offer low-interest mortgages to low- and moderate-income first-time home buyers (DiPasquale and Keyes, 2000).

The Fair Housing Act also puts more pressure on banks to make loans in low-income communities, and the growth of community development corporations. It also provides housing block grants, in cooperation with the Cranston-Gonzalez National Affordable Housing Act of 1990, to state and local governments for housing assistance such as homeownership programs. In 1997 Secretary of Housing and Urban Development Andrew Cuomo announced that homeownership rates hit 65.7 percent, just slightly more than the previously recorded high of 65.6 percent in 1980 (DiPasquale and Keyes, 2000).

Of course, homeownership in not equally distributed among the population. The Fair Housing Act determines that 72 percent of whites are homeowners compared with 52 percent of Hispanics and 45 percent of blacks. Homeownership is higher for male- than female-headed households, and it is higher in the suburbs than in central cities (Goering, 1986).

The relatively modest amount of assistance provided to low-income people by the Department of Housing and Urban Development may be a result of the many difficulties the agency has faced. Republican Jack Kemp, HUD Secretary under the Bush administration, blamed government rules and red tape for declines in homeownership that had occurred at the time, but many of the problems Kemp faced at HUD were in changing the image of an agency tarnished by scandals (DiPasquale and Keyes, 2000).