Low Income Housing Policy

The federal government devotes an immense amount of money to housing subsidies.

About $40 billion of it goes to quite ineffectual mean tested programs, about $6 billion of it goes to tax credits for low income housing developers, and about $600 billion comes in the form of tax loopholes and subtle assumed guarantees of federally owned mortgage wholesalers that mostly benefit the middle-middle to upper-middle class.

Despite the programs in place, people still die because that can't find affordable housing with standard utilities for their families.  This week, a man who worked in a restaurant kitchen and his seven children in Maryland died in their sleep of carbon monoxide poisoning, when they resorted to putting a space heater in a poorly ventilated kitchen of a unit that had no legitimate electricity service when the utility company cut off their electricity service from their pirated electricity meter.

Marginal Revolution notes a new NBER paper on the subject.

Some of the biggest barriers to low income housing are local.  Zoning and building codes limit where small square footage, high density, more affordable housing can be built, while trying to atone for these barriers by mandating that developers build money losing affordable housing in order to gain the right to build large subdivisions with unaffordable housing.  Usually, these codes make the best the enemy of the good, confusing minimum standards of habitability and public safety, with mere cramped conditions and aesthetic concerns.

Tax subsidies to mortgage holders are also not shared by renters.