| This study examines the existing stock of privately owned, federally assisted, endangered, low and moderate income housing. This situation has captured the attention of the housing industry, legislators, state and local housing officials, and the national media. Given the increase in homelessness, the prospect of losing hundreds of thousands of units occupied by low income people has caused widespread alarm.;Two factors explain the potential loss of affordable housing and displacement of low income tenants: (1) The early withdrawal of private owners from assisted housing programs and (2) Expiration of federal rental subsidy contacts.;This study focuses on the prepayment and subsidy policies. Research examined the programs, decisions, and actions of the federal government as they relate to privately owned, federally assisted, low and moderate income housing. A specific issue examined includes expiration of subsidy contracts by owners and developers exercising their option to prepay their mortgages prior to the expiration date. The outcome of the prepayment situation is termination of the subsidy program which lifts all rent restrictions, as well as restriction on the income of people living in the projects. Owners are then free to convert projects to market rate rentals, condominiums, or even non-housing uses, resulting in the permanent loss of affordable housing units. These events have created critical situations for cities. This study seeks to provide useful alternatives to the prepayment and subsidy policies.;The methodology and strategy utilized included an examination and review of the laws and existing implementation policies and collection of data and statistics on the prepayment cases, the number of units involved, and the number of people displaced. The legislative history is analyzed to ascertain the legislative intent, whether the intent has been achieved, and any failures and unintended consequences. In addition, interviews with government officials from eight localities with a prepayment problem are included. The focus of the research is Northern California.;The goods and services needed for housing are examined. The economic factors involved in housing production are explored. The market's reaction to the decline of the housing finance system and other institutions designed to direct the flow of funds to housing are also examined.;Several other countries, England, Singapore, and Sweden, have housing programs for low income people. These three countries are analyzed and their results studied for possible application to this situation. |
