Affordable housing initiatives have stalled with the collapse of the market in tax credits which fund construction. Advocates are resting their hopes in the stimulus bill to turn things around.
"With the whole housing market in a deep freeze, it's perhaps not surprising that fewer low-income units – which require huge subsidies to get built even in flush times – are being constructed. But the slowdown is happening at a time when rising foreclosures are forcing more people into the rental market.
The problem stems from the fact that the primary mechanism for expanding housing for the poor – tax credits – has collapsed. These credits, though little known, are responsible for financing as much as 70 percent of the cost of constructing new low-income housing.
The stimulus bill being debated this week in the US Senate does just that. So far, it would grant $2 billion to be distributed to individual states to fill affordable-housing financing gaps. Under the House version of the bill, the US government would buy a portion of credits that developers couldn't sell, in the hope that would be enough to get construction moving again."
FULL STORY: Affordable housing hits a wall in time of rising need

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