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8/22/02 - NY Times

In Shift, Program Is Turning Tenants Into Owners


Barbara Jean Robinson calls it her "miracle house." The three-bedroom, vinyl-sided Colonial is in a neighborhood of daytime drug deals and nightly gunshots. Ms. Robinson, 49, is afraid to sit in the yard because of the squatters in the abandoned house next door and the mangy tomcats. But her living room has five windows, where she has twined strands of plastic leaves as makeshift valances, just how she likes them.

After a lifetime living in public housing and using federal Section 8 rent assistance vouchers, Ms. Robinson, who lives off Supplemental Security Income because of a disability, bought the house in December through a new program allowing low-income families to use government subsidies for mortgages instead of rent.

"Sometimes I have to ask myself every day, `Is this really my house?' " she said as she mixed a cake for her daughter's 17th birthday. "I always told the Lord, "If I ever get a home, can I have a lot of windows?' I kept praying for a brick house, but I began to pray different. I said, "God, give me what I need, not what I want.' "

Ms. Robinson is one of 13 Section 8 recipients in Milwaukee, and about 500 nationwide, who have become first-time homeowners through the Department of Housing and Urban Development initiative over the last year. Approved in the late 1990's but just taking off in recent months, the program has been embraced by the Bush administration as a path to its goal of adding 5.5 million black and Hispanic homeowners by 2010.

It is a huge shift for Section 8, which was begun in 1974 to disperse poor families from public housing projects and which is now the nation's largest and most expensive housing program, with 1.8 million recipients and a $14 billion annual price. The home ownership option, which requires financial counseling and caps subsidies at 15 years ù except for elderly and disabled recipients ù could make Section 8 a steppingstone to the middle class.

"This is part of the real American dream," said Michael Liu, the assistant secretary at HUD who oversees the program. "The statistics show, the anecdotes show, that home ownership is really the major rung toward moving upward to higher economics and higher education in the United States. Here they are building up wealth, they are building up equity for the next generation."

But while local and federal officials, and the new homeowners, consider the program a win-win, analysts and those on both sides of the low-income housing issue say it reflects misplaced priorities. They question whether Section 8 recipients are stable and responsible enough to handle the unpredictable costs of owning a house, and whether there are affordable houses in most markets. The government's efforts, they say, would be better directed at providing incentives to developers to build more low-cost units.

"A bona fide member of the community is not somebody who has a lawn, but somebody who earned that lawn," said Ron Utt, senior research fellow at the conservative Heritage Foundation in Washington. "We should be asking, `Why is this person financially dependent? How can we make them independent?' as opposed to, `How can we give them something other people work pretty damn hard to get?' "

Ron Ippolito, executive director of the Florida Housing Coalition, an advocacy group, said his years in the field had taught him that, "I hate to say it, but some people are not meant to own a home." Most Section 8 recipients, Mr. Ippolito said, "don't have that disposable income if something goes wrong."

Susan J. Popkin of the left-leaning Urban Institute in Washington said her research showed that recipients of rent aid were often families with "multiple problems," including poor credit histories and bad health. "They are not in the position to own a home; many of them are having difficulty paying rent," Ms. Popkin said. "I can't imagine anything more than a small percentage of households would be ready for this."

Only 100 of the 2,500 eligible local housing authorities have signed onto the home ownership program. Federal officials said it has been most popular in small and mid-sized cities like Burlington, Vt., and Nashville, which have had 33 closings each. It has also caught on in Lakewood, N.J., and Syracuse, as well as in Midwestern cities like Columbus, Ohio; Madison, Wis.; St. Louis and Minneapolis.

Here in Milwaukee, along with the 13 closings since December, seven Section 8 recipients have been pre-approved for mortgages after completing home ownership classes. An additional 559 of the 5,000 local Section 8 recipients have applied.

Section 8 assistance is limited to families with incomes of less than 80 percent of the local area median, and in Milwaukee that percentage equals $53,760. The local housing authority said that the average income of recipients here was $10,700, with three-quarters earning less than $15,000 a year. Nationally, to qualify for the home ownership option, recipients must be working and earn at least $10,300 a year, or 2,000 hours at minimum wage (unless they are disabled).

Genell Whitelaw, 45, a custodian at Marquette University who has been receiving Section 8 for six years, has looked at four houses since her application was approved two months ago and planned to look at three more on Saturday night after her shift. She wants a place that does not need much work in a clean, quiet neighborhood because she hopes to open a home-based day care center.

"Not that I don't like what the system is doing for me, but I don't want to stay up under the system," said Ms. Whitelaw, who will get $190 a month from the government toward her mortgage.

Though disabled people like Ms. Robinson, who suffers from chronic lymphodema, which causes painful swelling, can qualify for other grants, those who are working must pay at least a third of their 3 percent down payment. Wendy Van Dyke, who moved into a three-bedroom ranch-style house in April with her two children, said she used her income-tax refund to put $3,000 down on the $80,000 house. Ms. Van Dyke, 34, a clerical worker for the county government who previously applied for bankruptcy protection, pays $381 a month; the Section 8 voucher covers $376.

The squat house is smaller than the apartment she had rented, but Ms. Van Dyke said her children, 12-year-old LaCree and 9-year-old Jared, seemed happier in the new house, playing in a gaggle of neighbors until Ms. Van Dyke called for them at dusk from the back door.

In June, Ms. Van Dyke had a housewarming party, where the pastor of her church blessed the house. The archway between the kitchen and the living room is still festooned with more than a dozen cards of new-home congratulations.

"I was thinking maybe I should take them down," she said. "Then I thought, no, I'm not ready yet."