The 17-month-long, 124-page study by the 22-member Millennial Housing Commission largely recommended a hackneyed, treat-the-symptoms approach to the high cost of housing when it should have focused more on a cure.

In doing so, the Commission ignored the underlying causes of the problem and used questionable data and measures that resulted in it overstating the true magnitude of housing problems, according to a lone commissioner, whose dissenting remarks have gone largely unreported.

"To improve affordability, we must increase family incomes and reduce governmental policies that restrain housing supply and raise costs. The Millennial Housing Commission report proposes widely expanding housing programs, but, to a large degree, ignores these underlying factors that create housing problems in the first place," writes the dissenting commissioner Robert Rector, a senior research fellow with the Washington, D.C.-based Heritage Foundation, a conservative public policy think tank.

Created by Congress two years ago, the Commission's mission was to identify, analyze, and develop recommendations highlighting the importance of housing. It also was charged with developing recommendations to improve the housing delivery system and to provide affordable housing for the nation.

Among other suggestions it largely recommended revamping, revitalizing, expanding or creating new tax credits, subsidies and other government assistance to build new owner-occupied and rental housing. It also called for transforming the public housing program, restructuring the U.S. Department of Housing and Urban Development's (HUD) Federal Housing Administration (FHA), establishing a work requirement linked to housing assistance and expanding the housing choice voucher program.

Without offering many specific recommendations, Rector says more attention should have been given to underlying causes for more direct, far reaching and permanent solutions.

"The average poor family with children works between 800 and 1000 hours per year. That's the equivalent to full-time work for only five or six months out of the year. Clearly, if we wish to reduce child poverty, the hours of parental work must be substantially increased. And if we wish to enable families to pay more for housing, the hours of work must be increased," he writes.

He concedes it was a positive first step when the the Commission did recommend a work requirement tied to housing assistance.

"Since the beginning of welfare reform, for example, black child poverty has fallen by a third and is now at the lowest point in U.S. history. While the recommendation to establish work requirements in housing programs is a positive step, much more must be done to increase work and earnings," he says.

Rector also says the erosion of marriage is a leading factor generating the need of housing assistance and that current housing programs actively penalize and discourage marriage.

"Nearly two thirds of all child poverty occurs in single-parent families. Not surprisingly, 87 percent of the families with children receiving housing aid are single-parent families. Clearly, the erosion of marriage is a principal factor behind the need for housing assistance. The Millennial Housing Commission has taken a"head in the sand" attitude toward this critical problem. This refusal to address the anti-marriage elements of housing law will lead to an increase in child poverty and an undermining of child well-being in the long-term," he said.

The Commission also missed the fact that regulatory restraints on housing production cramp the supply and that increases costs.

"It is a simple fact that those cities that have the greatest "affordability" problem are those that have "smart growth" or other regulatory policies that severely limit new housing growth. Policies such as restrictive zoning, antiquated building codes, and high impact fees for new construction reduce housing supply and greatly increase costs for everyone in a community.

Finally, Rector points to what he calls faulty data used by the Commission which under counts national income by as much as two trillion dollars per year. He says much of the under count occurs in low income families. Under counting income overstates the affordability problem, he says.

The Commission's concept of "affordability" -- housing that costs no more than 30 percent of income -- is flawed because a family spending more than 30 percent of its income on housing does is not necessarily suffering economic hardship, Rector says.

As an example, a family with an income of $20,000 per year paying $5,000 in housing costs is paying 25 percent of its income to housing and, by definition, does not have an affordability problem. A family with an income of $25,000 per year paying $10,000 in housing costs is paying 40 percent of its income to housing and, by definition, does have an "affordability" problem.

However, after housing costs, both families' incomes are the same, $15,000.

"It is unclear that the family with the "affordability" problem is worse off than the family without the problem. In fact, the family with the "affordability" problem may be better off. In short, affordability is a very misleading measure of either relative living conditions or economic hardship. Policies that are based on this misleading measure are likely to be misguided," Rector said.

Published: July 11, 2002

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.