US Housing Policy Favors Rent Checks Over Construction Investment

In a speech to the annual conference of the National Low Income Housing Coalition in Washington, D.C. on Tuesday, HUD Secretary Shaun Donovan announced that the Obama administration's new focus on housing for lower income Americans will shift away from home ownership and towards rent subsidies for families too poor to afford home ownership. Donovan told the Coalition that the $14 billion in spending appropriated for low income housing assistance in the American Recovery and Reinvestment Act will be divided into a $1 billion investment in the National Affordable Housing Trust Fund, which pays for construction and rehabilitation of low income housing units, with the remainder of $13 billion being devoted to extended housing aid to Katrina victims and additional Section 8 rent subsidy payments for occupants of existing rental housing units. While this allocation of the money by HUD may be good news for low income housing renters, it is certainly bad news for the construction industry.