The impossible dream?

July 09, 1991

The 1980s were a disaster for affordable housing -- not just for the poor but also for middle-income earners. Many of the soldiers who returned from the Persian Gulf, for example, had no homes of their own to come home to, and little hope of buying one. For the first time since World War II home ownership, the foundation of the American dream, has declined, and record numbers of working adults are living with their parents.

The Department of Housing and Urban Development issued a report this week blaming local zoning regulations, which limit the number and types of houses that can be built, along with excessive building fees and red tape for putting homeownership out of the reach of middle-income buyers. The report proposes, as a remedy, that states and cities not be given federal housing money until they come up with ways to eliminate the regulatory barriers.

This is a fine start. But zoning regulations, red tape and the like are, after all, only one part of the housing equation. The other is financing, which can pose at least as impenetrable a barrier.

A generation ago, when a federal commitment to housing took shape, the nation constructed an array of institutions to support it including the FHA to insure long-term, low-down-payment loans for Americans of modest means, and -- after World War II -- the VA insurance program to help veterans in a similar way. The result was that a young worker could get a home for a few hundred dollars down and affordable monthly payments and go about the business of raising a family. Affordable housing had the ripple effect of additional jobs, expanded local property tax revenues and stronger neighborhoods.

HUD is right to prod local governments to break down the barriers. But it is wrong to assume they alone can solve the problem. Federal support for moderate-income housing -- expanding the FHA, if necessary, to again insure low-down-payment, low-interest loans -- is indispensable if we are truly to fulfill the promise adopted by Congress in 1949 of a "decent home and suitable living environment for every American."

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