Yesterday, an article appeared in the Boston Globe about President Barack Obama’s plan to use around $4 billion of economic stimulus money to create new affordable housing nationwide. According to the author, this marked a watershed movement as the new administration decidedly moves away from the “ownership society” initiatives of the Bush years.
The plan will use the $4 billion (of the total $14 billion stimulus funds granted to HUD) to create more affordable rental housing by converting foreclosed into rental units and constructing new low-rise apartment buildings. HUD will use another $4 billion to refurbish the nation’s existing public housing stock of 1.2 million units and announced on July 28th that $2.25 billion of stimulus cash was already spent or “in action” on completing stalled public housing projects. That bridge financing will provide funding where private capital, usually incentivized by LIHTC has dried up.
New York City will be the first city to begin construction use stimulus money to actually start new public housing projects, using $60 million to begin construction on apartments in Harlem and East New York, reported Multi Housing News today.
What do people think about this? Is this a good use of money?
The Housing Choice Voucher Program, which supplies Section 8 apartments to renters, has generally been thought to be a much better solution than housing projects. The short term need for new jobs in the construction sector and the need to do something with foreclosed homes besides letting them fall into disrepair seem to be the chief reasons for this new HUD expenditure, rather than some ideological shift on the housing front.