Housing policy matters

A long-deferred discussion is truly unfortunate because housing policy really matters.  Research supported by the John D. and Catherine T. MacArthur Foundation has shown that good-quality housing that is stable and affordable may be an essential “platform” that promotes a wide array of positive human outcomes in education, employment, and physical and mental health, among other areas.  When it comes time once again to think broadly about U.S. domestic policy, housing should be near the top of the agenda.

Ever since the financial crisis began five years ago, policymakers have avoided moving forward with the necessary debate on such topics as how to reform the system of housing finance and whether the current balance between policies that favor homeownership and those that support renting is properly calibrated.

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It is understandable that policymakers have not moved forward on this debate.  Sub-prime mortgage financing and the creation of a housing bubble drove the financial crisis that struck five years ago last month.  In the crisis atmosphere that followed, difficult tasks like reforming Fannie Mae and Freddie Mac—the largest players in the housing market—were put on hold.  Even as the U.S. Department of Housing and Urban Development continues to promote thoughtful assessments on all aspects of housing policy, the discussion over housing finance and policy has been waiting for a calm, post-crisis moment to really begin.

Sadly, it does not appear that this is that moment, which dashes hopes raised only a few months ago.

In February, after 18 months of hard work to forge a consensus, the Housing Commission assembled by the Bipartisan Policy Center and co-chaired by former HUD Secretary Henry Cisneros and former Sens. Mel Martinez (R-Fla.), Christopher Bond (R-Mo.) and George Mitchell (D-Maine), issued its report.  “Housing America’s Future: New Directions for National Policy” provides a strong basis for exploring, in a reasoned and bipartisan manner, many critical issues.

And just this past August, in a speech in Phoenix, President Obama offered his most comprehensive thoughts on housing since he took office. 

Conditions finally seemed promising to begin the dialogue about housing policy that the country needs to have.  Yet once more, because of the crisis over the Federal budget, this discussion is being deferred to another day.

At the MacArthur Foundation, we have a distinctive vantage point on policy insights into the impact of housing on the U.S. economy and this nation’s residents.  One of our programs, How Housing Matters To Families and Communities, is a five-year, $25 million research effort to deepen the literature on the effects that smart, research-based investments in housing have on social and economic outcomes, beyond shelter.

Over the past year, we’ve learned many things that can contribute to the discussion about housing policy, once it moves closer to center stage.  When policymakers are able to reengage, they’ll find there are new developments in how Americans think about housing and what is being learned on the ground in communities across the country.

In April, a national survey conducted by Hart Research Associates and commissioned by the MacArthur Foundation, found that two-thirds of adults (65 percent) believe the focus of national housing policy should be split fairly equally between rental and ownership, as opposed to promoting one over the other. Three in five adults (61 percent) believed that renters can be just as successful as owners in achieving the American Dream.  This is a meaningful change from attitudes held just five or ten years ago, when the American Dream was equated solely with homeownership.

Research published in August by Rebekah Coley of Boston College provides significant evidence about how important decent housing is to the well-being and development of children. 

The study shows that, among the five housing characteristics included in the analysis (quality, stability, affordability, ownership, and receiving a housing subsidy), poor housing quality was the most consistent and strongest predictor of emotional and behavioral problems in low-income children and youth.  This is vital new information for designing housing policy in an environment of scarce resources—given the increased awareness of the repercussions of the housing crisis, the deep recession from which the country is just now emerging, and the current heated debate over federal support for low-income families, from housing subsidies to food stamps.

Other MacArthur Foundation-funded research to be published in the months ahead will explore the link between job loss and evictions – and whether the latter drives the former, and not the other way around.   The correlation between housing voucher programs and education choice will provide valuable information for both housing and education policy.
And fascinating research will soon be published showing the impact of stable housing on the ability of Latina mothers in the U.S. to forge a more equitable relationship with their husbands or partners.

When the political atmosphere eases, as surely it must, and the moment arises when housing policy can again be debated in a thoughtful manner, many new developments, flowing from well-considered research, will help inform the discussion and lead to smart policy that uses government resources for the best outcomes for families and communities.

Stasch is vice president of U.S. Programs for the John D. and Catherine T. MacArthur Foundation and former commissioner of Housing for the City of Chicago.