Inflation in the Standard Cost of Adequate Housing: Site I. 1973-1976. Housing Assistance Supply Experiment

摘要

Inflation in housing costs that occurred in Brown County, Wis., (Site I of the HUD Housing Assistance Supply Experiment) between 1973 and 1976 is analyzed, along with its effect on program benefits. The Experimental Housing Allowance Program was designed to enable participants with low incomes to afford the full costs of decent, safe, and sanitary housing by providing direct cash assistance for rent and utilities, but inflation has made the payment schedule obsolete, and program benefits are inadequate for program purposes. The analysis of inflation addresses two issues: (1) the extent of housing cost increases, and (2) the responsibility of the program itself for the increase in housing costs. Data sources were field surveys of renter households in Brown County, fuel and utility rate schedules obtained from local suppliers of these items, and administrative records of the allowance program. Results show that between 1973 and 1975, contract rents for housing in Brown County increased at an average annual rate of about 4 percent and gross rents increased at an average annual rate of about 6 percent. There were marked differences in inflation rates for different sectors of the rental market. Rates were higher for single - family homes than for apartments, higher for large units than for smaller ones, and higher for low - rent units than for high - rent units. Less comprehensive evidence for the period after February 1975 indicates that the identified pace and pattern of inflation are characteristic through 1976. Increases were due largely to higher prices for domestic fuels and utility services, and these prices have affected program participants even though their contract rents have remained stable. It is concluded that the program has had no discernible effect on inflation for housing in the county. Increases in benefits to participants are recommended to compensate for inflation as well as realignment of the benefit schedule for very small and large households. Supporting data are appended. (Author abstract modified).