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Affordable Housing







Reagan's Commission on Housing concluded that future housing policy should de-emphasize housing production and rehabilitation. Housing affordability would be the focus of a new program.

The commission proposed the use of housing vouchers, an income supplement similar to the Experimental Housing Allowance Program, and recommended elimination of all four Section 8 programs. In addition to the voucher plan, two small programs were added: the Housing Development Action Grant (hodag) and the Rental Rehabilitation Grant program. hodag is a one-time grant to subsidize construction or rehabilitation costs for projects in which 20 percent of the units are affordable to low-income households. The Rental Rehabilitation program allows cities to compete for block grants that may be used to subsidize moderate rehabilitation. Each grant is matched by a Section 8 subsidy. In 1989 both programs continued to operate, but at extremely modest levels of funding.

Ford Foundation Programs

After providing intensive support for a few large cdcs during the 1970s, the Foundation began to explore whether the cdc model could be expanded. With the contraction of federal funds for community development projects, new financial partners were sought to diversify cdcs' funding base. The creation of lisc was one step in this direction. Another was Foundation support for a "third generation" of community organizations, which seemed to have the potential of becoming important forces for social development within their communities. To secure a broad financial base for these "emerging" cdcs, the Foundation established partnerships with local foundations, municipal governments, and the private sector. Since 1984, $18 million in grants and $10 million in pris has been committed to these partnerships and cdcs.

Without the deep federal pockets once available for core support, emerging cdcs, lisc-supported cdcs, and other nonprofit housing developers have become leaner organizations than their predecessors. At the same time, some of these cdcs have become creative housing finance packagers. Community developers of the 1980s have been faced with the challenge of building physical and financial models that can operate under the economic constraints of the times and still serve the needs of low-income families.

In recognition of these shifts in financing and to support the growth of smaller cdcs, the Foundation's pri program provided loans to the Boston Housing Partnership and the Chicago Equity Fund to demonstrate more efficient ways of delivering debt and equity financing to small-scale, community-based housing developers. In these models, local government