Local Housing Policy and the Non-Profit Sector - Essay Example

and Local Housing Policy and the Non-Profit Sector and local governments have been the key playerssince 1980s in developing and innovating housing policy at a larger scale. These innovations are also supported by the non-profit sector as well. For lower and middle income families and individuals, state and local governments have funded in their housing. However, the federal government has mostly helped to preserve those housing systems which were built on subsidized basis till the mid of 1980s as well as for rental vouchers. Since 1980, the federal government has shifted the major role to provide affordable housings to the state and local government levels through its policy of “devolution”. Primarily, funding made to state and local governments were made by the federal government support to build and renovate most of those housings in the form of various funding facilities. Those funding facilities comprised of tax-exempt bonds, block grants including CDBG and Home and Low-Income Housing Tax Credits. Funding facility thorough Block grants was a major shift allowing state and local governments to prepare their own housing plans and strategies. It is important to note that many cities have attempted to build, produce and preserve those affordable housings by utilizing their own resources. Those resources included the capital budgets allocated to those cities as well as the general revenues earned by those cities. New York City came up front as an exception to this criterion and did not fund the housing through its own resources. The City in question mainly utilized the funds from its allocated capital budget. The other major contributions that were made to fund the City’s housing requirements comprised of federal block grants, Low-Income Housing Tax Credits and various other federal government based resources. These state and local governments also devised some of the other funding facilities, the most famous of which is the housing trust funds. Moreover, housing trust funds are one of the key sources through which the affordable housings are funded. These trusts are developed through the fees collected by the real estates agencies as well as from inclusionary zoning. As a result, private builders and developers take special interest in developing those affordable housings because of the incentives and requirements created by those funds. Inclusionary zoning programs have different degrees of dimensions in the form of their focus and structure. The key dimensions include Set-aside Requirements, Developer Incentives, Strength of Requirements, Income Targeting, Affected Projects, Options for Off-site Development and in-lieu Fess, and the last one, Duration of Affordability. In short, it can be summed up that the increase in inclusionary zoning is turning out to be a widely adopted style of funding the affordable housings. The zoning of this kind is especially common in those states which anticipate the local governments in meeting a reasonable share of their regional requirements for affordable housing. There is a highly increasing trend that can observed in relation to those cities which are opting this inclusionary zoning funding facility for providing affordable housings especially in the affluent suburban communities. Despite of the fact that inclusionary zoning is gaining more popularity because of the lower inclusion public funding in most places, yet it can barely achieve the target of providing affordable housing at a large scale. The study of Terner and Cook (1990) reveals that state and local government agencies demonstrate greater amount of flexibility in formulating and designing the appropriate housing programs because they are more familiar with the places and the population of those areas than that of the federal government. However, according to Muller and Schwartz (2008), the state and local governments are not capable of granting too much subsidies for affordable housing for very lower-income families due to lack of their internal funding resources. Furthermore, these resources are also dependent upon the relative market strength of the housing sector in that particular area along with the inclusionary zoning and the trust funds. On this account, federal government is more capable of providing subsidies because their funding resources are almost unmatchable with those of state and local governments. Broadly, for very low-income families, these state and local government funding is quite limited unless those families have the capacity of paying around 30% or more of their income on account of rent. Furthermore, there is also a tradition of reducing the amount of rent from the very low-income families in those events where the income of those families decreases substantially. This tradition is considered to be a routine exercise as the purpose of these housing programs emphasizes on providing affordable housing to the very low-income families. Particularly, when these very low-income families reside especially in those areas which are funded through the resources of state and local governments, these families are also entitled for various distinct kinds of facilities from the federal government as well. Federal government provides them special part from the allocated subsidized housing funds in the form of federal rental vouchers. Moreover, these families are also supported through Low-Income Housing Tax Credits by the federal government as well. It can be concluded that in order to provide affordable housings to the middle and lower-income households, these state and local governments even with the support of non-profit organizations cannot fulfil this task alone, as they are highly dependent upon the federal government’s assistance in this regard. Without federal government subsidies and other financial supports, affordable housing to the neediest families will remain a desire for the state and the local governments. Role of Non Profit Organizations, For Profit Organization and Local Housing Authorities There are many studies which support the fact that federal government has taken away the responsibility of formulating policies for urban housing system. Since 1980s local and state government along with the private sector are taking initiatives for the establishment and implementation of urban housing system. Brat (2008) in their studies has mentioned the background information about the productivity, unique focus and growth of non profit housing manufacturers. Brat (2008) has also discussed about the various initiatives that have been taken by private and governmental sectors in order to support this sector. According to Brat (2008), the three types of systems involve in production of urban housing systems are; non profit organization, for profit organization and local housing authorities. Brat (2008) has also discussed strengths and weaknesses of non profit organization and for profit organization in owning and developing the rental housing systems. The question about cost effectiveness for preferring one strategy over another is another important phenomenon which has been discussed by Brat (2008) for the long term viability of the urban housing projects. Brat (2008) further stated that there are 12 broad areas which must be brought under consideration while planning for long term ownership and effective housing production especially for subsidized housing. While going through these 12 areas, it has been found that in some cases, non profit organizations have an advantage and in other cases for profit organizations have an edge. In the research paper of Brat (2008), there has been observed a strong emphasis on the partnership of for profit, non profit and local authorities for urban housing systems. In order to provide financial backing for long term affordability and ensuring viability, it is essential for all the urban housing representative bodies for making partnership agreement. For non profit and for profit organizations, some strategies which can be helpful are: Each entity should have the related knowledge and experience Each entity should work to understand the perspective of other and benefits must be shared equally. Each entity should be willing to cooperate with their resources, expertise and succession The legal requirements for partnership must be crafted in a careful manner and must comply with the Internal Revenue Code. Along with developing economical and financially affordable housing system, it must also be considered that social goals are also met at the same time. This can be done by utilizing strategies which are environmentally friendly which means that they strive to decrease the needs of transportation and minimize the usage of non-renewable energy Another valuable idea provided by Brat (2008) is that non profit and for profit organization can settle an agreement of partnership so that both of these types of organization can work diligently for the development of effective urban housing system. Brat (2008) has also provided recommendation about how make amendments in policies to improve the role of non profit organization. References Bratt, Rachel G. “Nonprofit and for-profit developers of subsidized rental housing: Comparative attributes and collaborative opportunities.” Housing Policy Debate 19. 2 (2008): 323-365. Print. Longley, Robert. About the U.S. Department of Housing and Urban Development (HUD). Web. 20 February 2012. Schwartz, Alex F. An Introduction to Housing. 2nd ed. New York: Routledge, 2010. Print. Read More