In a significant shift in policy, the current administration is moving away from former President George W. Bush’s concept of an “ownership society,” with $4.25 billion worth of funds assigned to the Department of Housing and Urban Development (HUD) for federally subsidized rental housing. These rental housing assistance and development funds will be for constructing low-rise apartments and refurbishing foreclosed homes.
Homeownership versus rental housing
Representative Barney Frank, chair of the House Financial Services Committee, stated, “I’ve always said the American dream should be a home – not homeownership.” Rep. Frank was one of the early critics of the Bush administration’s homeownership principle.
However, conservatives warn that if rental rates become more expensive than a mortgage payment, then the HUD fund’s goal of providing subsidized rental housing to those who need it would be problematic. Homeownership, they said, can boost taxes and stabilize families and communities. It can also help people become financially independent.
Many saw Bush’s homeownership policy as a two-edged sword. While it may have contributed to a better lifestyle and a more stable home life for many Americans, it also put many in financial trouble as the recession hit. Subsidized rental housing reflects the impact of the recession. For some, this is solid proof that not everyone could or should own a home, but for others, this is only a stepping-stone to owning a home again once the economy gets better.
Though HUD will still devote some resources to assisting people with buying low-cost housing for ownership, the push for rental housing assistance and development is on the front burner.
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