While the Department of Housing and Urban Development has intimitated that it will seek way to help America’s housing stock “go green,” it is yet to provide concrete results in that direction.
HUD Secretary Shaun Donovan established a new department, known as the Office of Sustainability,” to research how HUD could lower the combined costs of housing. HUD’s new rubric incorporates both direct housing costs as well as transporation costs. It notes that the two now consume as much as 60 percent of household income.
This is a good idea. For years, people have chosen to “drive ’til you qualify.” They have moved out to the suburbs and commuted to their jobs in the city. It led to sprawl, and it masks the real costs of housing. Those Beazer “homes from the 130s” were located at the end of long commutes. In this framework, low-income households don’t really lower their housing costs so much as they shift housing costs over to transportation costs.
Section 8 does not tap into drive to you qualify, but it does work on some of the same prinicples. In the last entry of BankTalk, I speculated on the current problem: there is no incentive in place to encourage landlords to pay the costs of lowering the utility bills of their Section 8 tenants. It costs a lot of money to put in insulation. It costs a lot of (more…)