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May 1994, Vol. 117, No. 5
W ith the passage of the 1937 Housing Act and subsequent amendments, the Federal Government of the United States established as a goal that all citizens have "safe, sanitary, and affordable housing."1 Recent increases in rental prices and renter cost burdens for shelter, a leveling of homeownership rates, and an increased awareness of the plight of the homeless have challenged the reality of this Federal housing policy. For example, the cost of shelter as a percent of income increased from 23 percent in 1970 to about 30 percent in 1991 for renters.
Early government intervention in housing markets came in the form of public housing projects. Then, the 1980's saw increased interest and experimentation with various other forms of market intervention, such as housing vouchers and rental certificates. To measure the ramifications of rental assistance as a market intervention strategy, this article analyzes the spending behavior of households receiving such assistance. On the basis of data collected from the 1988-90 Consumer Expenditure Surveys, households that received rental assistance from Federal, State, or local government agencies were identified and compared with those households that were eligible to receive assistance, but did not, and with households that were ineligible for assistance.
The article is divided into three parts. First, a brief background and review of government intervention in housing markets is presented, and the Department of Housing and Urban Development's housing certificate and voucher programs are outlined. Sociodemographic characteristics of the aforementioned three groups are then compared and contrasted, and differences among them in renter cost burdens and distribution of total expenditures are identified. Finally, ordinary least square and TOBIT regression models that were run to calculate income elasticities and "subsidy" elasticities for various expenditure categories are presented.
This excerpt is from an article published in the May 1994 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Dolores Hayden, Redesigning the American Dream: The Future of Housing, Work, and Family Life (New York, W. W. Norton and Company, 1986), p. 122.
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