The housing crisis

The recently released US Census Bureau findings on the gradual aging and smaller family size of the American population add urgency to what many housing experts have been warning political leaders about for the past several years. That is, that the dmand for affordable housing in the United States is going to increase significantly during the 1980s. The experts' concern is that public officials may not yet be listening to -- or grasping the import of -- the warnings.

That the demand for housing will grow is of course not in dispute, even though some 18 million new homes were built during the 1970s. But what seems not to be fully understood is that the characteristicsm of the house-buying population are changing rapidly as the postwar baby-boom generation comes to maturity. Example: the typical household has now dropped to 2.8 persons from 3. 1 persons at the start of the past decade. By 1995, notes the Census Bureau, the median household may number 2.2 persons.

What that means is that the "new home" of the 1980s and 1990s will have to fill diverse needs. Many housing units will have to be smaller because single people or childless couples, many of the latter with considerable income levels, and increasing numbers of elderly people now are buying homes in sizeable numbers. Other houses will have to accommodate traditional families or at least "family units" (sometimes with just one parent) that include children.

Yet future construction will take place against a background of historically high interest rates and new forms of variable-rate mortgage credit that will sharply work to the disadvantage of lower-income and lower-middle-class families. The average price of a new home is now over $80,000. The home of the 1990s will not be inexpensive by any measurement.

Until the recent census figures came in, housing experts were talking about the need to build 21 million new units during this decade, which would mean over 2 million starts a year. But the swiftly changing composition of the population may mean that even the 21-million-unit estimate is too low. What is clear, however, is that the current seasonal construction rate -- 1,343,000 units as of April -- is far below the minimal 2 million annual units now needed. Worse still, a significant percentage of that new construction is clustered in just a few states such as California, Texas, and Florida.

What is to be done? Most important at this juncture is a clear-cut federal policy that the US will not retreat from its traditional commitment to the growth of homeownership. Homeowning contributes to a stable society, one in which citizens have a special stake in the well-being of their communities.

In 1949 Congress (with sympathetic Truman administration in power) adopted a national housing policy to ensure that stocks were ample, affordable -- and available. The US dearly needs a new national housing policy. The 1980 Republican platform itself partially recognized that need by calling for a "young family housing initiative." The recent census findings suggest that such an initiative must look beyond just the young family to encompass all Americans needing shelter.

The administration and Congress should put the housing issue on the front burner of its upcoming "social-action agenda." Every possible idea to boost housing stocks should be explored. Such alternatives include granting the savings industry new forms of savings instruments to encourage mortgage money creation; finding ways of rebuilding older, often abandoned, buildings; providing housing vouchers for low-income families; offering special tax-incentives for housing-construction; revising zoning codes that often discourage building; urging wage restraint on the part of construction unions -- and price restraint by builders.

One expert recently told a housing panel that America's housing crisis threatens to become "the Vietnam of the 1980s." That must not happen. The warnings must be heard. Lawmakers, builders, lenders, and the public must take steps now to ensure that Americans will always have adequate shelter -- and shelter they can afford.