Even if the economy continues to improve at a modest pace over the next few years, the housing conditions of the poor are expected to deteriorate. The most striking reflection of this is the growing number of homeless families—mostly women and their children—on the streets of nearly every major city. For these families, the problems of housing affordability and housing availability have converged.

Housing subsidies traditionally have been provided by the federal government, first as an economic stimulus during the Great Depression and after World War II and again in the late 1960s as a part of the War on Poverty. Over the past fifty years, more than $350 billion has been spent by the federal government to help create some 5 million subsidized units. These units serve about one-fifth of all poor families.

In the past few years, however, the federal government has retreated. Support for subsidized housing declined precipitously, from $30 billion in 1981 to less than $8 billion in 1989. The withdrawal of federal assistance occurred just as low-cost rental units were lost in record numbers through deterioration and conversion to higher-cost use, such as cooperatives and condominiums. Now, as the federal housing pipeline dries up, the poor are subjected as never before to the dual pressures of reduced incomes and higher housing costs.

Faced with growing numbers of homeless families and other signs of housing deprivation, state and municipal governments have struggled to replace federal programs. Many have established housing trust funds dedicated to the production of low-cost housing, and others have responded with emergency assistance for homeless families. Although state resources are limited and cannot achieve the extensive impact possible through federal programs, state initiatives offer highly innovative models that may set the stage for future national programs. The Ford Foundation can play an important role by encouraging innovation at the local level and by helping to replicate the best of the new approaches on a larger scale.

Before describing a philanthropic role in the housing field, we will review the factors affecting the housing marketplace. The following section reviews trends over the past fifteen years in housing affordability and quality, with special attention to rural housing and the growing problem of homelessness.