Thursday, March 13, 2008

Housing Subsidy Riot: Sign of Things to Come?

Not Sacramento-related, but worth pondering. In Boca Raton, FL, a huge riot broke out when the Boca Raton Housing Authority (one of only two city offices without a web site, along with the PIO... WTF?) ran out of applications for subsidized housing:

BOCA RATON — A crowd of more than 500 people waiting for hours this morning for housing voucher applications were dispersed by police in riot gear at the Boca Raton Housing Authority when the applications ran out sooner than expected.

"Leave or face arrest," police officers shouted at the crowd as they urged them out of the housing authority parking lot. People were made to leave the vicinity altogether, with officers forcing them to cross the street and move toward their cars.


The overwhelming turnout of people desperate for housing money came as little surprise to Suzanne Cabrera, president of the Housing Leadership Council of Palm Beach County.


"This is an indication that housing it's still a huge problem," Cabrera said this afternoon. "It's a reflection of people's concern for housing, their uncertainty. I got people today asking me: was this my last chance to get housing I can afford?"

Several other things, such as mortgage foreclosures and high gas prices, are contributing to that feeling of insecurity and desperation, she said.

So whenever word gets out that voucher applications are being handed out, which she said doesn't happen very often, people get full of hope.

A cursory search of Boca Raton shows around 1,500 vacant foreclosed houses available for purchase in the city, and over 26,000 houses for sale in Palm Beach County.

18 comments :

Sippn said...

give me, give me, give me....

Hey, fire up the Soylent Green truck...

http://www.imdb.com/title/tt0070723/

Max said...

Ah, yes. Who remembers the Wonder Stuff?

Well I hope I make more money than this in the next world.
I hope there's a lot more in it there for me.
I'd like my trousers pressed and my shoes
shined up by a rich girl,
who's only care in the world is me.

"But are these all the brains I'm entitled to have?
Don't try to make me happy, when I'm happy feeling bad.
I've got no manners or a hand you shake,
and when I won't tell the truth it's easier to fake."

So....Give Give Give, Me More More More
I'd like it all.

Is the bank big enough?
coming ready or not to the next world.
I hope there's a whole lot more in it there for me.
I'd like my friends to be rich and I'll never do a stitch,
in the next world, and my only care in the world is me.

Anonymous said...

I'm shocked by the extreme sense of entitlement these people must possess in order to riot over this. You can paint it as desperation all you want, but when people become desperate to have something GIVEN to them, you need to start asking what's wrong here.
I feel for those who have trouble affording housing; But the sad truth is, that if you subsidize something, you encourage the problem. Basic economics are at play. Pay for people's housing, and you will inevitably end up with more people who need you to pay for their housing.

PeonInChief said...

It's not surprising that this would happen, given that there is not a single county in the United States where a person making minimum wage can afford a one-bedroom apartment. In California half of all tenants pay more than 30% of their income for rent, and 25% pay more than half their income for rent. And given the tiny subsidies for tenants in the United States as compared to, for instance, the tax deductions and subsidies for homeowners and landlords, the "give me, give me" line really applies more to them than to low-income tenants, don't you think?

Gwynster said...

Thanks Peon,

You just saved me from a 200 word rant. I have been saying their will be riots over housing before this is all done for a long time.

PeonInChief said...

But, Gwyn, most times I LIKE your rants.

Anonymous said...

subsidies for home owners fall into the same category as low income housing assistance.
as far as tax deductions for homeowners and landlords, I don't think they amount to actually saving MORE money than the owner pays in property taxes/other taxes.
Look, the inability of so many people to afford housing is a major problem. The market should automatically correct the problem, but it doesn't. I blame this on government interference in the first place. For instance, a local government, worried about affordable housing, places a moratorium on market rate housing, which affects supply, which drives existing market rate housing prices UP. Another example would be the enormous fees placed on new development by cities and counties, the cost of which is past on to the consumer. See: law of unintended consequences. When government involvement is the problem in the first place, more government involvement is not the answer.
I'm not saying people who cannot afford housing don't deserve housing. I'm saying that paying for their housing exacerbates the problem by breeding a sense of entitlement, and the number of people who need housing assistance will increase.

PeonInChief said...

Anonymous--

If your argument held true, the situation should have improved over the last twenty-five years, as housing subsidies for low-income tenants have been slashed. Unfortunately that has just exacerbated the problem, as larger numbers of low-income people chase fewer subsidies.

And those small subsidies you mention enable landlords to survive for a year without renting their properties--just living off the tax benefits. That seems like a pretty good subsidy to me.

Anonymous said...

I do not believe low income housing assistance has been slashed overall. I believe it has increased and continues to increase, over the last 25 years. I may be wrong, please provide a link showing that overall assistance is down if you have one.
Anyway, my point was that the tax and regulatory climate make it very difficult for the free market to provide cheaper housing. I don't see how you've argued against this.

Gwynster said...

My dream job for, well about ever, was to be an architect, coming up with ways to build affordable starter homes using innovative materials and owner labor.

Then Habitat of Humanity came along and I love them to pieces. If they did more work locally (which they can't due to fees and land costs) and didn't have the religious aspect, I'd be volunteering at every project.

I also applaud the new kit house movement. It reminds of how kit and handbuilt homes gained a foothold here in Sac back during 1890 to 1920s. Look up Craftsman kit homes if you are curious about the handbuilt movement 100 yrs ago.

So back to the story. 500 people are looking for affordable housing when 1500 homes are vacant and foreclosed in BR, 26,000 for sale. I see an easy fix to this, invloving plenty of sweat equity on the part of the 500 and some nice padding to the city and county coffers if the powers that be have the b@lls to take on the banks.

What I wouldn't give to be 25 yrs younger.

Max said...

The whole scene is just brutal, and I'm sure if there was an easy answer, the problem would be solved.

I just find the supply/demand imbalance interesting. Here's a place with a huge amount of available housing, and plenty of demand. Yet, riots are breaking out. Something has to give eventually.

Anonymous said...

This isn't anything new. I worked for the Housing Authority in a city in Southern California in 1988. The day that we handed out applications for subsidized housing we had to call the cops out because we were in a state of civil unrest. There was fighting, screaming, rioting--every cop in the city had to be called out.

What this speaks to is a Housing Authority that does not know how to do its job. There have ALWAYS been huge crowds showing up for these events. You have to organize them correctly to prevent the outbreak of fighting.

We ended up doing them by mail and by lottery. Much safer for everybody.

PeonInChief said...

Anonymous--

Subsidized housing was cut by more than 80% (not corrected for inflation) during the Reagan years, and funding has never increased to the inflation-adjusted amount which was allocated during the Carter administration. Google Reagan housing subsidies and you should find more references than you'd ever want to read. Please note that the need has increased since then, as wages have fallen for the vast majority of workers and housing costs have increased. (You may not be old enough to remember this, but prior to the Reagan administration, housing costs were supposed to take up no more than 25% of income, and that included power utilities. It was during the Reagan years that the standard was increased to 30% and utilities were excluded from the limit.)

Let's define our terms first. Cheaper housing isn't very precise. For a substantial minority of the population, cheaper private-sector housing is not an option, as the private sector cannot provide housing costing less than $650 a month without subsidy. (This figure was put forward by the real estate interests during the discussion of Sacramento County's affordable housing requirement for new developments.) Those who cannot afford to pay that sum would need subsidy under any circumstances.

Secondly, it's more profitable to build bigger, more expensive houses. So builders are going to build those houses to the exclusion of cheaper, less profitable houses. The regulatory climate may have some effect, but for the vast majority the difference between $450,000 and $420,000 is just $30,000 of unaffordability.

Third, the most important regulatory scheme for your purposes is Proposition 13, which was passed by the voters, not the government. It discourages the construction of cheaper housing, as only the most expensive housing pays for itself in property taxes. It also encourages the development of retail and commercial--retail because it brings tax revenue and commercial because it is cheaper to service than residential construction. That has far more impact than any setback requirements ever could.

Anonymous said...

Gynster, I'm amazed that you feel so passionate about helping the less fortunate, but because of a religious affiliation you aren't able to help. I find that to be a cop out. Part of the problem in this country is we are teaching people that it is okay if you don't work and don't strive to be self sufficient because the rest of us are here to bail you out. Be that housing subsidies, welfare, SS, Medicare, etc. This mentality is almost like a diesease, and when it begins to permeate a community, it spreads to future generations and becomes ingrained in the psyche of the population. I know this firsthand, as I come from a mixed race family, and without discussing which ethnicity tends to graviate towards this I see it when our family gets together and I hear my in laws and the way they discuss "working" the system. Be it school lunches, qualifying their kid with ADD for SSDI anything for a free handout. It disgusts me, but I keep my mouth shut!

PeonInChief said...

Gwyn--

It's always possible that city governments could get the federal government to put some money into purchasing some of the foreclosed homes for permanent affordable housing. It would not only create a base of affordable housing throughout the country, but would also stabilize neighborhoods in danger of serious deterioration because so many homes have been foreclosed.

Gwynster said...

Anon,

I had written a very long post but it's not worth the debate and this is a housing blog. If religion is involved in an event, I will not be a part of it, period.

Patient Renter said...

"if you subsidize something, you encourage the problem."

Furthermore, if you subsidize something that is costly, your subsidy only acts to maintain that elevated cost.

Housing subsidies, while appearing to be helpful on the surface, are counter-productive.

PeonInChief said...

Patient Renter--

The point I made above is that there are only tiny subsidies for tenants, and I don't think that these subsidies have any effect on the cost of renting anywhere in the country. What tenant subsidies do, however, is to stabilize housing for low-income families. (One of my favorite counter-intuitives is the studies that have shown that girls who grow up in public housing have better outcomes that girls of similar economic condition subject to the private housing market. Even when the housing isn't very good, the stability that comes with subsidies is important for children. That doesn't seem to be counterproductive to me.