US comes under fire over housing rights

A UN human rights report has drawn attention to the human rights crisis that has been highlighted by the US subprime crisis - the fact that millions of Americans are unable to secure one of their most basic rights: the right to adequate housing.

Kanaga Raja

THE United Nations Special Rapporteur on the right to adequate housing has expressed deep concern over the millions of people in the United States who are facing serious challenges in accessing affordable and adequate housing, caused amongst others by the recent subprime mortgage crisis, cuts in federal funding for low-income housing and soaring housing prices in several cities during the period of the real estate boom.

In a report to the UN Human Rights Council, Raquel Rolnik said that the subprime mortgage crisis has also widened an already large gap between the supply and demand for affordable housing, and the economic crisis that followed from this has led to increased unemployment and an even greater need for affordable housing.

The report, based on her visit to the United States from 22 October to 8 November 2009, also finds a new face of homelessness, with increasing numbers of working families and individuals finding themselves on the streets, living in shelters or in transitional housing arrangements with friends and family.

The report also notes that federal funding for low-income housing has been cut over the past decades, leading to a reduced stock and quality of subsidised housing. In addition, several cities have experienced a real estate boom that has led to increased housing prices.

Presenting her report to the Council on 5 March, Rolnik, while acknowledging the high quality of the majority of housing in the US as well as the availability and quality of utilities and services, voiced deep concern over the millions of people in the US who face serious challenges in accessing affordable and adequate housing, issues long faced by the poorest people and today affecting a greater proportion of society.

She noted that there is a longstanding commitment to provide adequate housing within the country's means for all Americans. 'But this history is also marked by the fact that [the] Federal Government provides much higher levels of subsidies to high-income homeowners via tax exemptions as compared to low-income housing assistance,' she said, adding that the criteria for the distribution of federal assistance should be based on a real survey of housing needs.

She welcomed the measures adopted by the new administration of President Barack Obama to reform policies and improve access to adequate housing, including committing significant resources to housing, addressing mortgage modification programmes, and neighbourhood enhancement and emergency recovery initiatives through the American Recovery and Reinvestment Act.

She strongly urged the US government to increase opportunities for dialogue with civil society and tenant organisations. 'Real participation of those affected by the housing crisis is essential for a successful outcome to current efforts to change and reform,' she said.

On the occasion of the presentation of the Special Rapporteur's report on the housing rights situation in the US, the Geneva-based Centre on Housing Rights and Evictions (COHRE) made an urgent call on the US government to recognise housing as a human right and ratify the International Covenant on Economic, Social and Cultural Rights.

'There is a human rights crisis in the US that can no longer be ignored - millions of Americans are unable to secure one of their most basic rights: the right to adequate housing,' said Salih Booker, Executive Director of COHRE.

'All  human rights  start at home, but only if you have one. The US government needs to address this housing crisis before even more families are driven into homelessness.'

'The conclusions in the UN Special Rapporteur's report provide further evidence - if any is needed - that the US population desperately needs the protections afforded by the International Covenant on Economic, Social and Cultural Rights,' said Booker.

According to COHRE, the Covenant would require the US to take steps, to the maximum of its available resources, to achieve housing rights for all of its people and provide legal remedies in cases of violations under national law.

'Today (Friday, 5 March), the UN called for an immediate moratorium on the demolition and disposition of public housing. We support that call but want to take it further: the US government should put in place a moratorium on all evictions in the context of the foreclosure crisis until laws are put in place to ensure that people do not become homeless on account of such violations of the rights to housing,' said Booker.

Promotion of home ownership

Tracing the history of US housing policy, the UN report finds that home ownership for the (predominantly white) middle class was greatly facilitated through federal financing of more than half of all suburban homes during the 1950s and 1960s. This led to an increase in the home-ownership rate from 30% in 1930 to over 60% by 1960. Due to a variety of discriminatory laws and practices, the vast majority of loans were not accessible to African Americans, and whites received 98% of federally approved loans between 1934 and 1968.

The report notes that federal housing policy has resulted, on the one hand, in the achievement of a high rate of home ownership - about 69%. On the other hand, it has also resulted in the decreasing supply of public housing - currently 1.2 million units. This loss has been accompanied by the progressive withdrawal of government from the housing sector. The policy has included the promotion of private home ownership for lower-income households and the privatisation of subsidised housing complexes, allowing private developers to promote mixed-income developments.

In 1977, the Community Reinvestment Act required banks to allocate prescribed portions of their mortgage portfolios to neighbourhoods where they accepted deposits. Banks had to modify their normal definitions of risk (which included neighbourhood conditions) and in some cases they made risky loans and many homes were provided to families who could not afford them.

Additionally, the curtailment of subsidies, in particular for public housing, created added pressure for lower-income households to seek home ownership as the only way of improving their housing conditions. 'The recent subprime mortgage crisis is the result of this policy and the commitment to home ownership, as an incarnation of the American Dream for the masses.'

According to the report, the US Department of Housing and Urban Development (HUD)'s definition of affordable housing is that a household spends no more than 30% of its income on housing. In 2007, about 22% of the 36.9 million rental households in the United States were spending more than half their income on rental costs. At the same time, about 8.8 million renter households with low incomes were spending more than half of their income for housing.

The number of households facing serious affordability constraints increased by 33% between 2000 and 2007, and the poorest and most vulnerable people face the heaviest burdens in terms of housing costs. About 12.7 million children - more than one in six - in the United States live in households spending more than half their incomes on housing.

Erosion of public housing system

The rights expert said that today, there are approximately 1.2 million households living in public housing units, managed by approximately 3,300 housing authorities, which include a variety of options from single-family houses to high-rise apartments. Almost two-thirds of all public housing households include an older person or a person with disabilities. Public housing also represents a crucial support to more than 400,000 low-income families with children, the majority of them working families. The majority of public housing residents are very poor, around 73% having incomes of 30% or less of the area median income (AMI) for their household size.

According to the expert, eligibility for public housing is based on income (the lower income limit is set at 80% and the very low income limit at 50% of the AMI), family status and citizenship/immigration status. The AMI is used to determine the rates for market-rate and low-income housing in poor areas, she said, expressing concern over the problems generated by the use of this formula, when AMI is calculated including the incomes of very affluent areas to determine the rates for housing in poor areas. She welcomed the intention of HUD to revise this formula.

The report finds that in past years there were significant cuts in low-income housing assistance programmes. Budget cuts in the 1980s resulted in the gradual erosion and poor maintenance of the public housing system.

Further subsequent funding cuts have also significantly affected the preservation of public housing. By the early 1990s, hundreds of thousands of public housing units had become dilapidated. Over the past decade there has been a net loss of approximately 170,000 public housing units due to deterioration and decay, and much of the current public housing stock needs substantial repairs and rehabilitation.

Rolnik called for low-income housing assistance programmes to receive additional funding. 'Each year, the federal government spends more than three times as much on tax breaks for homeowners - with a large share of the resulting tax benefits going to upper-income households - as it spends on low-income housing assistance.'

The Special Rapporteur welcomed the recent commitment of additional budgetary resources to create and preserve affordable housing. Additional funds for housing have been requested in the fiscal year 2010 budget, representing an increase of 10.8% over the fiscal year 2009 budget.

Over the past 15 years, says the report, the HOPE VI programme (Housing Opportunities for People Everywhere, created in 1992) has invested $6.1 billion of federal funding in 235 projects to demolish 96,200 public housing units and produce 107,800 new or renovated housing units, 56,800 of which will be affordable. In addition, 78,000 housing vouchers have been issued. Besides the fact that some demolished units are replaced by market-rate housing, many 'affordable' units are too costly for many public housing tenants.

The Special Rapporteur also deeply regretted the demolition of thousands of public housing units in New Orleans. Many residents and victims of Hurricane Katrina were prevented from returning to their homes (many of which, according to residents, sustained little storm damage) and had their homes demolished.

The current housing crisis in New Orleans reflects the disastrous impact of the demolition policy. In particular, the demolition of the 'Big Four' housing complexes (B.W. Copper, C.J. Peete, Lafitte and St. Bernard) has displaced approximately 20,000 individuals. Only one public housing complex still remains, Iberville, which is in need of better maintenance.

According to the report, rental housing vouchers have become the nation's largest low-income housing assistance programme, serving over 2 million households with extremely low incomes. Nevertheless, most cities have long waiting lists for assistance, typically of five years. Under existing funding levels, federal programmes can assist only about a quarter of the low-income families eligible for assistance. Funding cuts have also contributed to the additional loss of over 150,000 vouchers between 2005 and 2007.

The Special Rapporteur also highlighted the link between housing and health. Poor housing conditions expose residents - especially children - to a number of diseases. Most residents of public housing with whom the Special Rapporteur spoke complained of asthma, attributed to mould from poor maintenance of units. A resident in Los Angeles described living in slum housing conditions with rats, cockroaches, bedbugs, deteriorated piping and lead-based paint, and as a result developing chronic asthma.

The Special Rapporteur was also concerned about the effects of gentrification on the poorest. As middle- and upper-income families choose to move to or to stay in the cities, inner-city subsidised housing developments face increasing pressure as developers vie for prime land. Gentrification pushes out the poorest to areas with reduced services and employment opportunities.

'Predatory equity'

The report also draws attention to the threat of 'predatory equity', which appeared during the recent real estate bubble. The situation arises when an investor purchases a rent-stabilised building with a mortgage which is securitised and sold repeatedly over a short period of time for ever-increasing sums. The resulting mortgage payments increase with each sale, with existing rent rolls insufficient to cover the cost. As a result, says the report, new owners engage in aggressive tactics to evict residents in order to raise rents to subsequent residents, and eventually remove the building from the rent stabilisation scheme.

Given the downturn in the real estate market, there exists a high risk that such mortgages will default, Rolnik said, adding that she had heard reports of investors simply walking away, leaving the building to the bank, and tenants with uncertain futures.

She also noticed that while the impacts of predatory equity are being felt across the country, they have been most acute in New York, where the full effect of foreclosures has yet to be felt. In New York alone, one civil society organisation has identified over 90,000 rent-stabilised units subject to predatory equity.

In addition to the longstanding challenges of affordability, more and more households are losing their homes to foreclosure, putting even more pressure on already stressed housing markets, says the report. It cites HUD as stating that 'the extent of the housing and economic crisis is now painfully apparent. (...) approximately 3.7 million borrowers began the foreclosure process in 2007 and 2008'. RealtyTrac reported a 32% increase in foreclosure filings from April 2008 to April 2009.

Existing renters are another sector of the population affected by foreclosures. 'At least 20% of foreclosed properties are not owner-occupied, and in many parts of the country (such as New England, New York City, and Minneapolis), half or more of households living in foreclosed buildings are renters.'

Homelessness

The report also says that the economic crisis and significantly increasing numbers of foreclosures are increasing the risk of homelessness in communities across the country. Many families - renters and homeowners - have been caught in the foreclosure crisis and become homeless, moving in with relatives or friends, going to emergency shelters or living on the streets.

It is estimated that over 800,000 people are homeless on any given night in the United States, and as many as 3.5 million people experience homelessness annually, living in shelters, transitional housing or public places. Including those who have lost their own homes and live with family or friends, the number reaches 4.5 million.

According to an official study conducted in 2006, on average, single men comprise 51% of the homeless population, families with children account for 30%, single women for 17% and unaccompanied youth for 2%.

The homeless population is estimated to be 42% African American, 39% white, 13% Hispanic, 4% Native American and 2% Asian. An average of 22% of homeless single people are considered mentally ill while 8% of homeless individuals in a family with children were found to have mental illness.

According to the Special Rapporteur, more than 1.5 million children in the United States experience homelessness each year. In many cases, there are no adequate shelter facilities where parents and children can stay together and children are often removed from their parents and placed in foster care.

The report notes that many cities that do not provide enough affordable housing and shelters are resorting to the criminal justice system to punish people living on the streets. Some of the measures adopted include prohibition of sleeping, camping, eating, sitting and/or begging in public spaces and include criminal penalties for violation of these laws.

Addressing the issue of discrimination in housing, the report finds that the total number of housing discrimination complaints filed in 2008 was 10,552, the highest number on record. Almost half of all complaints received by HUD (44%) under the Fair Housing Act (of 1968) are from persons with disabilities.

Evidence shows that subprime loans were five times more likely to be made in neighbourhoods of African American people as compared to neighbourhoods of whites. Such loans were found to have been particularly marketed to minorities, even in cases where individuals qualified for traditional loan products. Minority women were particularly targeted.

Rapporteur's recommendations

The report makes a range of recommendations. The Special Rapporteur noted throughout the visit that there is a longstanding commitment to provide adequate housing within their means for all Americans and an acknowledgment that the history of housing policy in the United States has been problematic.

She further noted that the present government is actively pursuing policy change to better meet the housing needs of its population, and welcomed the measures adopted by the new administration to improve access to adequate housing, including committing significant resources to housing, addressing mortgage modification programmes, and neighbourhood enhancement and emergency recovery initiatives through the American Recovery and Reinvestment Act.

Among the recommendations made by the Special Rapporteur are that existing federal housing assistance programmes, which play a very important role in providing affordable housing to low-income residents, should receive more funding. In addition, additional funding is needed to properly maintain and restore the remaining public housing stock.

The Special Rapporteur also considered that, given the crisis in affordable housing, an immediate moratorium is required on the demolition and disposition of public housing until such time as one-for-one replacement housing is secured, and the right to return is guaranteed to all residents. Housing should be made available for displaced residents before any unit is demolished.

To address the foreclosure crisis, the rights expert recommended that tenant protection legislation be further strengthened for renters of foreclosed properties. The Helping Families Save Their Home Act (P.L. 111-22): Protecting Tenants at Foreclosure Act (Title VII) should be extended beyond 2012 and become permanent protection.

To tackle the issue of homelessness, the Special Rapporteur called on the Interagency Council on Homelessness to develop constructive alternatives to the criminalisation of homelessness in full consultation with members of civil society. When shelter is not available in the locality, homeless persons should be allowed to shelter themselves in public areas. The administration and Congress should encourage the expansion of the definition of homelessness to include those living with family or friends due to economic hardship.

Voicing dismay over the dire housing situation faced by some Native American tribes, the Special Rapporteur encouraged the US government to devote greater resources and attention to this urgent question and would welcome further information on any plans and developments in this respect.

The Special Rapporteur strongly encouraged the US government to ratify the International Covenant on Economic, Social and Cultural Rights.                                          

Kanaga Raja is Editor of the South-North Development Monitor (SUNS). This article is reproduced from SUNS (No. 6879, 9 March 2010), which is published by the Third World Network.

*Third World Resurgence No. 235, March 2010, pp 35-38