The progression would be Section 8 -> Renting -> Home Ownership
The purpose of programs like Section 8 isn't to subsidize people while they save up to purchase expensive assets and leapfrog past non-subsidized renters. It's to backstop people who couldn't afford normal rents.
I was an electrician’s apprentice in college and did work for countless rental properties of all levels of quality. Short terms are built in the cheapest possible area at the lowest level of quality that’s legally allowed, and often not even meeting that low standard.
On top of all of this, the cost is outrageous. A one bedroom in a short term was typically 50-100% more expensive than my 3 bedroom in a much nicer part of town.
Could a section 8 resident buy a house, and pay for a 1 month short term rental in the interim and meet your criteria? 6 mo? A year?
Buying a house requires signrifajt savings for a down payment, moving costs, and so on.
Subsidized housing isn’t meant to help people build up savings and accumulate possibly six figure savings to buy a house. Subsidized housing is meant to prevent people who can’t afford rent from becoming homeless.
If a subsidized housing program is structured in such a way that it’s a net financial win to be on it than to be self-sufficient (e.g. renting on your own) then it becomes a “trap” as you penalize anyone trying to escape it and you incentivize people near the threshold to stay below it.
If someone wins the lottery or gets a new job with a huge signing bonus or gets a huge inheritance then by all means go buy a house right away and skip the renting step.
However, we need to revoke their place in the subsidized housing program as soon as they can afford to be off of it. I think people in this thread are forgetting that subsidized housing is a very limited resource and therefore we need to focus it on the people who need it most. Leaving people in the program who are accumulating six-figure house down payments from the savings would suggest that they don’t actually need the program but are taking the place of someone else who does need the help.
I think it’s more that the supply of subsidized housing is so low that it’s literally only people in the worst kinds of situations that qualify.
Obviously someone saving for a 100k down payment doesn’t need it, but there’s a whole sea of people in between that have no options now. Rent is too expensive, and subsidized housing is unavailable (only goes to the people that need it most). Ergo, I’m stuck in my parents’ house until I die, unless I want to pay extortionate rent for a shitty apartment.
Meanwhile, the people that do get subsidized housing suddenly have both a nice house and a lot of ability to save. I can totally see how that breeds resentment.
I’ve heard it said that the best way to get a house would be to have kids, divorce, and then become a single mother. Which doesn’t seem to be too far from the truth.
If the recipient later happens to win the lottery, I’d expect them to move directly from Section 8 housing to a mansion, no waiting period needed nor desired.
Section 8 might have some inefficient cliffs. But not allowing savings for a mortgage doesn’t strike me as one of them.
I’d rather some form of UBI-like assistance. Single program, means tested but no cliffs(just a gradual phase out of some sort), and no limits on what the assistance is spent on.
A big reason why we have these perverse rules in the first place is that people are absurdly concerned with controlling people who accept (certain types of) public money.
If someone can find a path to jump from dependency to ownership, why "should" aid programs be structured to prevent that?
I, for one, would be a fan of imposing similar restrictions on other aid recipients, like mortgage-interest deduction-takers and enthanol producers. I suspect many folks would abruptly notice the absurdities with such rules.
Because the next step from subsidized housing is to renting.
If we structured subsidizing housing programs such that they enabled people to save up for down payments, this creates a perverse incentive for normal renters to get into subsidized housing to accelerate their transition to home ownership. Any time you introduce a perverse incentive like this, you overwhelm the system as people who don’t need it start crowding out people who actually do need it.
Going straight from subsidized rental housing to home ownership doesn’t make sense. Going from subsidized rentals to non-subsidized rentals is the obvious next step.
in a perfectly efficient market, renting and home ownership costs exactly the same - not cheaper nor more expensive.
However, most home owners living in their home pay a premium for it, because they both want to secure their bid when they buy, and they are likely buying on more than just financial implications (like the location is great for their kids, etc). Therefore, a home owner is actually more likely to have a higher cost of capital over all - both the deposit and the mortgage added together, even if the mortgage interest by itself may be lower than renting.
Think of it this way - if renting was more expensive than the total cost of ownership, then an investor would borrow the capital needed for buying, and then rent it out and arbitrage the difference risk free. It is this mechanism that keeps the rent and the price of ownership at approx. equal.
In recent times, the price of ownership has grown due to the pandemic, and high availability of credit. Rent will follow, if it hasn't already, as landlords will not just eat the loss.
Which is not that far from the truth. At least on the UK, rent is an extortionary and ever-increasing tax on people who don’t have 150K to pay a deposit.
Why?
I mean that as a serious question. Housing costs in the US are absurdly front-loaded compared to renting, but they didn't used to be and there are other countries where they aren't. Why "should" housing be so expensive that six months or a year or careful saving on a living wage isn't enough for a down payment?
Nice bald assertion. It doesn't make sense to trap people in dependency, but I take it you're more comfortable with these programs failing in that direction...?
> this creates a perverse incentive
Which we already have, just with the reverse valence.
This is why I said I support means-testing the mortgage-interest deduction. People don't really understand things until they've been through them, and there's no good reason wealthier people shouldn't have to put up with similar paternalist nonsense for their handout.
Advancing your career in a way that should gradually decrease your dependance on government assistance instead cuts it off all at once, turning a raise into a massive pay cut, thus ensuring you don't climb the ladder and stay dependent on aid indefinitely. It's utterly perverse.
It also has a wealth cap, but that’s unrelated to the “make a dollar more and you’re done” idea that so many people hold, which is not how SSI income phaseouts work. The wealth cap is “you accumulate more than $2k at any one time, you’re done”, and that is different from making money resulting in a sudden loss.
It probably is not a great idea to have a wealth cap at any sort of a level that might be relevant to a middle-class individual. Someone shouldn’t have to destroy their safety net in order to qualify for benefits in the event they become disabled, and disability holders should not be barred from having enough cash to operate and to access the financial tools that would allow them to build their way out of poverty.
Maybe we could set a cap at $50k wealth or something but in the end who cares, if a few people in the top 1% end up using it that’s probably less costly than administrative costs of peering at everyone’s bank statements monthly.
Nor should there really be a wealth phase-out for benefits either imo. What is the benefit of making it harder for people who are just about to make the leap off welfare to actually take the leap?
I didn’t say they shouldn’t be allowed to save at all. Only that if they are capable of saving at the level required to buy a house and service a mortgage, they likely don’t actually need assistance.
The Credit Union "relies on a vendor for the software that is used to open, close, and maintain Safe Deposit Boxes. Over time, the vendor stopped consistently upgrading this software and we have now learned that it is being phased out altogether. Replacing this type of system would mean a significant cost to our membership."
A few years ago they replaced the double key system (bank employee has a key, you have a key) with a handprint system to let one customer at a time into the vault. They removed the bank key.
I always have to remember which set is where my box is: they have 3 or 4 boxes labeled 131 because they acquired them from other banks or credit unions who got out of the business.
I had to settle my aunt's estate in Huntington Beach a few years ago. The Chase branch there limited people to one box per branch because they are relatively popular. But safe deposit boxes definitely skew towards grey hair.
I opened an account with my credit union because they were one of the few options for safe deposit boxes but the branch with the boxes is miles away from my local branch so I don't use it often. I would have liked to store backups there but in the end I use BackBlaze.
There is no asset limitation for participation in HUD assisted-housing programs. However, the definition of annual income includes net income from family assets.
https://www.hud.gov/sites/documents/DOC_35701.PDF
What you’re describing is true for many assistance programs, including snap, for example… but not section 8 as far as I understand.
You can see it in the parking lots, high end cars and high end finishes in apartments.
There is very little incentive to move out in a well ran subsidized property in NYC.
I’ve managed large developments 800+ units.
I'm currently living in a Section 8 unit that's changed ownership and is getting renovated, apartment by apartment, with residents moved to temporary units in the complex until their renovated units are ready. And the Management Company that's running things really is clueless and does not even care to even Apply for any federal programs that may be available to get proper broadband speeds to low income households.
There needs to be some Federal Requirement for Section-8 housing Management companies to be forced to apply for any Federal Programs available to them in order for the low income Residents to receive the aid set aside in these programs to help poor and low income individuals/Families get better Internet Access. And this is in a time where the Government wants every service application done online, even in the time before the pandemic. There are Jobs where folks can work from Home via online jobs/services but that requires higher speed internet capabilities than is provided/accessible to low income individuals.
This isn't the article I had in mind but it is related and interesting: https://www.manhattancontrarian.com/blog/2013/9/21/two-new-y...
and includes this:
> The poor family is trapped in place. If they make the mistake of earning more observable cash, their rent will be increased by 30% of the increased earnings (that's how it works at NYCHA), and then they start taking away the other benefits as well.
I'm paraphrasing but basically to be eligible for Section 8 housing you can't have too many assets. Good financial planning would say to scrimp and save so that you can get make a downpayment to get a mortgage but you'll be kicked out of the section 8 housing long before you've saved enough to get out yourself.
Catch-22