The Nation's affordable housing crisis has reached record levels, especially in central cities. At the same time, while homeownership is at its highest level ever, the central city homeownership rate continues to lag significantly behind the suburbs.

Homeownership rates are 70 percent in suburbs but just 50 percent in cities. Central city residents of all income levels are less likely to own a home than suburban residents with similar incomes. Racial discrimination at all income levels adds to the urban homeownership gap, according to a Harvard study. African American and Hispanic households of all income levels are less likely to own a home than white households of the same income group. Home Disclosure Act data show substantial differentials in the mortgage denial rates between whites and minorities and between city and suburban residents.

Despite strong economic growth between 1993 and 1995, a record 5.3 million very low-income renters paid more than 50 percent of their income for rent or lived in substandard quality housing - commonly referred to as "worst-case housing needs." Households with severe housing problems are disproportionately found in central cities; 18 percent of central city renters --2.8 million families -- have severe housing problems.

Worst-case needs increasingly affect the working poor. Between 1991 and 1995, worst-case needs for families with at least one person earning a full-time paycheck rose by 265,000 families -- an increase of 24 percent. There has been a sharp decline in affordable housing. Between 1993 and 1995, there was a loss of 900,000 rental units affordable to very low-income families -- a reduction of 9 percent. Congress has not provided additional rent vouchers since 1994.

Homelessness continues to plague cities, driven by a lack of affordable housing, inadequate access to decent jobs, and problems ranging from mental illness and substance abuse to domestic violence and outdated or non-existent job skills. Best estimates suggest that 600,000 men, women, and children are homeless on any given day, with several times that many people experiencing homelessness each year.

The President's budget includes proposals to expand homeownership, expand rental housing assistance, and reduce homelessness. These include an additional 100,000 Section 8 rental assistance vouchers; a new Home Bank that will expand the use of HUD's successful HOME housing block grant funds; another round of Homeownership Zones; record funding for Homeless Assistance programs; a 40 percent expansion of the Low-Income Housing Tax Credit; increased promotion of Fair Lending; expansion of FHA loan limits, and a 73 percent increase in funding for fair housing education and enforcement.