U.S. Housing Policy Needs a Bold New Approach

Published July 24, 2008

“Summer 2008 could be considered a perilous time to be making recommendations on housing policy for the 21st Century,” admits William Higginson, author of a new report on affordable housing in the U.S. “Nevertheless, the clamor for change in this political year provides an opportunity to offer some fresh ideas on the role government should play in the production, quality, availability, and affordability of housing in our nation.”

In “Housing Policy for the 21st Century,” released today by The Heartland Institute, a national nonprofit research organization, Higginson outlines several key policy recommendations he says “would have a dramatic effect on affordable housing.” Among his proposals:


  • Use the FHA’s Guaranteed Insurance program to re-finance endangered subprime loans, but don’t bail out irresponsible lenders or borrowers.



  • Improve the liquidity of Fannie Mae and Freddie Mac by easing their capital requirements, allowing them to sell stock, and having them concentrate on loan guarantees in the coming year.



  • Shift public funding away from the production of new units of housing and toward supplementing the incomes of low-income families, enabling them to rent or own the affordable housing that is already available in the market.



  • Expand and reform housing choice vouchers by making them temporary, rather than permanent, and contingent on the participant getting an education, job training, or employment. Turn vouchers into a means to economic self-reliance.



  • Lift the income cap on eligibility to rent units built or renovated with funding raised through the Low Income Housing Tax Credit program.


“A sound housing policy for the twenty-first century,” writes Higginson, “will embrace a new paradigm describing the nation’s housing market. It is not two markets, one private and one ‘affordable.’ It is one market in which all people, regardless of income, can pursue their housing dreams. This theoretical construct becomes reality through a few key reforms to today’s public housing programs.”

Higginson is the retired president and CEO of Chicago Equity Fund, a Chicago-based real estate investment fund, and its four affiliated companies. Over a 20-year career he has developed and invested in hundreds of affordable housing projects in Georgia and Illinois.

“Housing Policy for the 21st Century” is available for free online at http://www.heartland.org/article.cfm?artId=23542. The printed report is available for $19.95 by calling The Heartland Institute at 312/377-4000.

Editors: Report author William Higginson, the retired president and CEO of Chicago Equity Fund and its four affiliate companies, is available for comment on this study. To communicate with him, please contact Dan Miller, Heartland’s executive vice president, at 312/377-4000 or by email at [email protected].

The Heartland Institute is a 24-year-old national nonprofit organization based in Chicago, Illinois. Nothing in this news release or the report it describes is intended to influence the passage of pending legislation. For more information, please visit our Web site at www.heartland.org.