PUBLIC HOUSING AUTHORITIES CAN MAKE HOME OWNERSHIP A REALITY OP-ED

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.

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 (CAF- HA), finds that these programs are game changers for families who might otherwise be locked out of homeownership opportunities.

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 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.

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.

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.

According to the Chicago Housing Authority website, CHA housing choice voucher holders and public housing residents can qualify for the Choose to Own program by meeting initial income (between 50%-80% of the Area Median Income, which for a household of 1 is between $32,650 and $52,200 in annual income), credit score (640+), savings ($3,000), reserves ($1,000 in reserves by closing date for future maintenance issues), and current lease compliance requirements. It is important to note that seniors and people with disabilities do not need to meet the same requirements to qualify. For more information: www.thecha.org/residents/services/chooseto-own-homeownership-program

With an emphasis nationally and locally on closing the racial homeownership gap, the obscurity of this program is incomprehensible. Especially in localities like Chicago, PHA homeownership programs can serve to restore homeownership opportunities unjustly denied due to racist policies. As the city grapples with addressing this history, the legacy of redlining and contract buying schemes, and the ongoing and alarming loss of its Black population, we can make homeownership a tangible reality for the Chicago Housing Authority’s program participants, 83% of whom identify as African American.

By layering supports onto this critical program, such as investing in peer mentors to guide new first-generation homeowners through the myriad of obstacles to sustainable homeownership, and simply building awareness about and marketing the program and its benefits, HUD and PHAs can better serve families that desire to become homeowners. This program is also well situated to deepen impacts through partnerships such as those with land banks and land trusts to widen the pool of affordable homes for purchase, and with lenders and philanthropic or community partners to develop specialized loan products and grant programs.

There is no doubt that placing a more intentional focus on homeownership voucher programs and meaningfully investing in them, could spark innovation and improvement in voucher service delivery. It could create new private, public, and philanthropic partnerships. And most importantly, it could bring voucher holders and their families on a path to housing stability and wealth building for themselves and future generations.

Patricia Fron and Gianna Baker are Co-Executive Directors of the Chicago Area Fair Housing Alliance (CAFHA). CAFHA is a non-profit consortium of fair housing and advocacy organizations, social service providers, government agencies, and municipalities. CAFHA combats housing discrimination and promotes housing justice through education, advocacy, and collaborative action.