Public Housing authorities can make ho by Patricia Fron and Gianna Baker
It has long been established that homeownership is one of the most solid paths to wealth-building in the United States. For many renters, and particularly lower income renters participating in subsidized housing programs, owning a home can feel far out of reach. However, local public housing authorities (PHAs) already have the tools to make homeownership not only attainable, but also a sustainable longterm investment for participants.
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Since 2000, the U.S. Department of Housing and Urban Development (HUD), authorized PHAs to develop and implement homeownership voucher programs under the Housing Choice Voucher (HCV) program. Homeownership vouchers work much like rental vouchers, but instead of paying a portion of one’s rent to a private landlord each month, the homeownership voucher pays a portion of one’s mortgage costs for up to 15 years and in some instances, for the life of a mortgage loan. The goal for both the rental and the homeownership voucher program is to provide subsidies to make housing more affordable for families. A loftier goal is to give families the opportunity to save for the future, to seek educational or other opportunities, and eventually to outgrow the program altogether. Subsidizing homeownership can be a path to meet both goals, and research conducted by the Chicago Area Fair Housing Alliance (CAFHA), finds that these programs are game changers for families who might otherwise be locked out of homeownership opportunities.
Homeownership can mitigate these longerterm costs and also offer a tangible path to build intergenerational wealth that simply cannot be provided through the rental program. CAFHA’s research demonstrates that voucher holders strongly desire this opportunity as a path toward stability, security, and prosperity.
Despite the benefits, homeownership voucher programs in Chicago and across the country are woefully underfunded and underutilized, and many voucher holders do not even know they exist. For example, 54 families purchased a home through the Chicago Housing Authority’s (CHA) homeownership program, called Choose to Own, in 2020. With roughly 63,000 participants of the CHA’s voucher and public housing programs, this represents less than .001% of the CHA’s overall programming.
The fact that PHAs are not provided with extra resources, financial or otherwise, to implement these programs, presents in itself, a significant challenge to the success of the homeownership program. PHAs must draw from their general HCV funds to support subsidies, staffing, and other programmatic needs. For many PHAs, starting a homeownership program can be daunting. HCV families require an initial investment to get into a strong position to purchase a home. From credit counseling to first- time homebuyer counseling, and even post-purchase counseling, there are several steps that families need to take to meet the requirements of the program and to successfully purchase a home. The capacity needed to administer and fund all these crucial elements may serve to disincentivize PHAs from meaningfully investing in the
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homebuyer program. However, this calculation is shortsighted; in the long-term, homeownership participants will likely have more predictable associated costs with fewer fluctuations due to the stability that homeownership provides. With rents across the country rising with no bounds, year over year costs to PHAs to provide rental subsidies are also increasing. Renters are also more likely to move at more frequent intervals, which sparks an array of administrative steps, from processing moving papers to inspecting new units and entering into new leases and agreements. Moreover, for those with disabilities, modifying a unit with every move is a frustrating process with emotional and financial costs to the renter, and administrative costs to the PHA. Homeownership can mitigate these longerterm costs and also offer a tangible path to build intergenerational wealth that simply cannot be provided through the rental program. CAFHA’s research demonstrates that voucher holders strongly desire this opportunity as a path toward stability, security, and prosperity.
