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Federal Requirements

The particular federal program that has propelled literally thousands of communities into preparing formal housing plans has been the CDBG program. One requirement for the receipt of funds, whether to be used for housing or other purposes, is the Housing Assistance Plan (HAP). At present, the rules require the community to certify in its application for CD funds that it is following a HAP approved by HUD. Briefly, HUD requires the plan to contain an inventory of the community housing stock and numerical goals for its improvement. It also requires the plan specifically to provide an analysis of the housing needs of lower-income renters. Finally, the plan must state how the goals are to be met.

Exactly what aspects of the housing stock and the housing market the study covers may vary substantially from one community to another. If the study is oriented primarily toward matters that are eligible for federal funding, it is likely to focus on the quality and cost of units available for less affluent households.

Good objective measures of housing stock quality are hard to come by. Several decades ago the U.S. Bureau of the Census had its census takers enumerate "deteriorated" and "dilapidated" units but subsequently decided that such judgments were too subjective to provide good data. However, the bureau does provide data on the number of units that do not contain complete kitchen and bathroom facilities. Imperfect as this measure is, it has been used as a "proxy" for housing quality. Another measure of housing quality, though it has nothing to do with the physical quality of the unit, is overcrowding. The U.S. Bureau of the Census defines overcrowding as a situation in which there is more than one resident per room.

Finally, much attention has been paid to the question of whether low- and moderate-income households can afford housing. For this judgment, planners tend to rely on rent-income ratios, a data item that is also supplied by the U.S. Bureau of the Census. At one time it was thought that a household should not have to spend more than 25 percent of its income on rent. Recently, housing economists have used 35 percent as a rule of thumb. Either figure is somewhat arbitrary.

Thus the community can make some estimates of the number of units that may be substandard and the number of households in need of rental assistance. Vacancy rates may also give some indication of whether the community should be seriously concerned with increasing the total number of units.

 
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