The purpose of this paper is to describe proposals for reform of low-income housing assistance that will alleviate poverty without increasing public spending. Low-income housing assistance is fertile ground for such reforms.

Getting better outcomes with less public spending is always desirable, and our current fiscal situation adds urgency to this task. Low-income housing assistance is fertile ground for such reforms. 

Governments throughout the world intervene heavily in housing markets, and most have multiple policies to pursue multiple goals.  This chapter deals with two of the largest types of housing policies in the United States, namely, low-income rental assistance and policies to promote homeownership through interventions in mortgage markets.

This paper documents the production of a panel of price indices for housing services, other produced goods, and all produced goods for each metropolitan area in the United States and the non-metropolitan part of each state from 1982 through 2012 that can be used for estimating behavioral relationships, studying the workings of markets, and assessing differences in the economic circumstances of people living in different areas.  Our general approach is to first produce cross-sectional price indices for a single year 2000 and then use BLS time-series price indices to create the panel.

The federal government has multiple housing policies to pursue multiple goals. For example, it promotes homeownership primarily through provisions of the individual income tax. 

Improving the housing of the poorest families was a high priority for President Lyndon B. Johnson. The widely-publicized problems found in the nation’s most distressed public housing projects, together with the fairly steady official poverty rate in the US since LBJ’s administration, have led many to a pessimistic view about what was accomplished by the War on Poverty’s housing programs for low-income families. 

Two important shortcomings of the official measure of poverty are its failure to account for noncash benefits (including the benefits of low-income housing programs) when calculating resources and differences in the cost-of-living across geographic areas when setting poverty thresholds. Alternative estimates of poverty rates that account for the variation in the cost-of-living across areas when setting thresholds and the value of rental housing subsidies when measuring household resources have been produced.

The failure to offer assistance to all individuals of the types who become homeless is a major defect of the current system of low-income housing assistance. Fundamental reforms of the system that are justified on other grounds would eliminate this defect.