Three-fourths of local housing officials report that the spiraling cost of housing is significantly limiting the opportunities for homeownership for lower-income people and younger families, according to a State of America’s Cities Survey on Municipal Housing, released by NLC at the Congress of Cities and Exposition, in Reno , Nev.

The Critical Housing Needs survey found that securing safe and affordable housing is becoming more difficult for many cities, with one-third reporting that the availability of affordable housing has worsened in the past year.

Among the most significant challenges facing cities are the increasing number of foreclosures, need for home repairs among elderly and low-income families, deteriorating housing stock, absentee landlords and vacant and abandoned properties. In addition, one-third of local housing officials have seen predatory lending on the increase, with more than half indicating it is a problem in their city.

“Ensuring an adequate housing stock is just one of the major obstacles faced by cities in this decade, but all the obstacles are linked together,” said NLC First Vice President Cynthia McCollum, councilmember from Madison , Ala. “We are facing increasing numbers of older residents, more fiscal challenges, problems with crumbling infrastructure and a changing economic climate. We must work together to keep our cities strong, because without strong cities — large and small — our quality of life will diminish.”

Funding for city housing programs comes from a critical mix of government and non-governmental sources: 84% of cities receive some federal assistance, 72% state assistance and 52% fund housing programs directly from city resources.

About three out of four housing officials, however, reported that the federal and state governments are not doing enough.

“Over the years, we have seen a substantial reduction in funding for programs such as the Community Development Block Grant, HOME Investment Partnership, and HOPE VI, while at the same time, we are seeing costs for land, construction, maintenance and infrastructure skyrocket,” McCollum said.

“Congress responded to our needs this year and we saw some successes, with funding for critical federal housing programs at or above last year’s levels. Unfortunately, however, none of the appropriations bills to fund these housing programs were formally adopted, so local governments remain in limbo,” she added.

In the survey, four in five local housing directors reported that the value of homes and rental costs have increased significantly, putting a severe financial strain on most families. The rising home prices equate to fewer opportunities for home ownership for lower-income working families.

Rising prices are also preventing younger generations from buying homes and making it more difficult for older people to keep or maintain their homes.

“We know that the core of the American dream is homeownership,” McCollum said. “But as rents and housing prices continue to rise, where can our younger workers, our lower-income families, our municipal employees live? We must find a place for them in our communities and we must commit to programs that will assist them.”

The survey identified a number of effective strategies that city officials are using to address the problem at the local level. They include: 

• Offering grants and low-interest loans for rehabilitation
• Providing city-controlled funds for down-payment assistance
• Providing homeownership and mortgage education and counseling
• Building partnerships among governmental agencies
• Improving local government responses and responsibilities
• Providing city-owned land.

Nation's Cities Weekly (12/18/06)