Affordable housing projects need more investment across the US

As the gap between rich and poor ever widens, it is becoming more important for communities across the United States to consider investing more into affordable housing projects – both to provide cheap housing for those on low incomes, but also to offer employment opportunities and stimulate the economy.

The federal government in the U.S. provides subsidies to make housing more affordable. Financial assistance is provided for homeowners through the mortgage interest tax deduction and for lower income households through housing subsidy programs. In the 1970s the federal government spent similar amounts on tax reductions for homeowners as it did on subsidies for low-income housing.

However, by 2005, tax reductions had risen to $120 billion per year, representing nearly 80 percent of all federal housing assistance. The Advisory Panel on Federal Tax Reform for President Bush proposed reducing the home mortgage interest deduction in a 2005 report.

One of the most unusual US public housing initiatives was the development of subsidized middle-class housing during the late New Deal (1940–42) under the auspices of the Mutual Ownership Defense Housing Division of the Federal Works Agency under the direction of Colonel Lawrence Westbrook.

These eight projects were purchased by the residents after the Second World War and as of 2009 seven of the projects continue to operate as mutual housing corporations owned by their residents. These projects are among the very few definitive success stories in the history of the US public housing effort.

In the U.S., households are commonly defined in terms of the amount of realized income they earn relative to the Area Median Income or AMI. Localized AMI figures are calculated annually based on a survey of comparably sized households within geographic ranges known as metropolitan statistical areas, as defined by the US Office of Management and Budget.