Selective Investments
As a kid I called both North Minneapolis and rural Wisconsin home. It is fair to say that my childhood years in the city and my teen years in the country had little in common.
I lived in no fewer than eight places while growing up in Minneapolis; my rural home was a tattered trailer house with two haphazardly attached additions.
Both environments, however different, shared in the tragedy of selective investment in housing.
The low incomes, and lack of resources to improve and/or purchase housing is a dynamic that many of our nation’s rural areas and inner city neighborhoods share. Another shared dynamic is the inequitable housing investment forced upon them both.
On an individual level, limited incomes often barely cover housing/rent payments along with other life necessities. Little personal income is left for housing improvements.
On a community/governmental level, the impact of selective investment is twofold. First, the nation’s tax structure provides enticements to homeowners. There are tax deductions for mortgages and property taxes; capital gains in housing are, for the most part, protected.
What this means is that the households with the resources to own good housing are provided with the financial incentives to protect it. Communities benefit even more when many households in the same area receive these advantages.
However, many inner cities and rural communities fall behind. The lower value of housing stock and low level of ownership keeps them from taking advantage of these incentives to the extent that other communities might.
An appropriate response, when government does not or cannot invest adequately through tax expenditures (tax deductions), would be allocating resources through government appropriations (targeted direct subsidies and programs). But this is not what is happening.
The federal government is pulling back on its commitments to affordable housing. The Bush Administration proposed drastic reductions in the number of renter households covered by Section 8.
The same disinvestment could be happening in Minnesota. Governor Pawlenty has proposed a 19.5% reduction in resources to the Minnesota Housing Finance Agency. The proposed cuts come in reductions to workforce housing development ($13 million cut from the Challenge Fund), preservation of rental housing ($1.5 million cut from a program that assists households with an average annual income of $8,320), and housing rehabilitation ($2.6 million taken from a program that helps low income households make needed repairs on their homes).
We are already hearing the counter argument that a majority of the Housing Finance Agency’s resources do not come from state spending. This is true. But the state appropriations allow the state “to buy down the cost of housing” so that it actually helps our lowest income community members. Without the state investment, the lowest income households would never be reached.
Let’s not exacerbate what is already selective government investment in housing. In tight economic times, low-income households have the least to keep themselves afloat.
