America Housing Subsidy By Jamal Osman

For a long time, America has been describe by the media and researchers as a “Consumer Republic” mainly due to society’s massive consumption that catapulted after World War II.  To overcome the horrors of the Great Depression in the 1930s and rejuvenate the economy, the US Government embarked on tremendous efforts to encourage society to consume more by boosting industrial production (Cohen, 2004). According to Cohen, beginning 1965, the government initiated a program that gave preference to Veteran soldiers low mortgage rates. Male Veterans benefited more than their fellow women veterans, whites were given preferential treatment over blacks, while those in the middle-class status enjoyed better purchasing opportunities than the working-class. This unparalleled inequitable distribution of housing created social division by elevating one group of law abiding citizens over others.

While it is worth privatizing the housing industry, the absence of government involvement could set-off protracted inefficiency and inequity (Rosen, 1985). Efficiency implies better infrastructure that meets the required habitable standards while equity is relevant to fairness of land allocation among the diverse races that create communities in urban and suburban areas. Excluding the government in the housing market could be a harbinger for uncontrolled mortgage rates, racial divide, marginalization of the disadvantaged, and higher rental rates imposed by landowners or the banking industry that is the major financier of the American housing industry.

Since the United States is a nation of immigrants and one committed to alleviating poverty, the Subsidized Housing or the Section 8 Voucher Program that was initiated by the Housing and Community Development Act of 1974 (US Senate 1974) has benefited millions of families especially the low-income and newly-arriving refugees from war-torn countries. Philanthropic and religious organizations took the mantle to prepare low-income housing for the millions of refugees and their families streaming into the country on a given time frame.

The Subsidized Housing and Section 8 Program substantially benefited many private housing developers. However, not every Section 8 Voucher holder got the type of dwelling befitting their preferences since whites became Suburbanites while the low-income fell under the Urban category. This systematic development ushered in racial subjugation and the lack of human integration. The concept of equality and equitable distribution of housing turned out unattainable. Government laxity to control privatization of housing could be blamed on such disparities among the heterogeneous communities that make greater America.

Without government regulatory constraints or involvement in the development of the private housing sector, private housing enterprises could set forth a recipe for busts and booms in a business that could eventually collapse due to inceasingly unnecessary supplies in the construction industry as happened in the 2001 bubble in IT bubble (Huang & Tang, 2012). While privatization of the housing market is vital as placing a cap on it would be tantamount to authoritarianism, underdevelopment, and a prescription for market failure, on the other hand, without government regulations, there could be unanticipated disasters such as overcrowding, landgrabbing, inhabitable infrastructure, discrimination, and other factors beyond human control.

References

Cohen, L. (2004). A consumers' republic: The politics of mass consumption in postwar America. Journal of Consumer Research, 31(1), 236-239.

Huang, H., & Tang, Y. (2012). Residential land use regulation and the US housing price cycle between 2000 and 2009. Journal of Urban Economics, 71(1), 93-99.

Rosen, H. S. (1985). Housing subsidies: Effects on housing decisions, efficiency, and equity. In Handbook of public economics (Vol. 1, pp. 375-420). Elsevier.