Defining the federal role in housing: Back to basics

The several objectives of government intervention in the housing sector and the economic rationale for them are briefly reviewed. The case for and efficiency of this intervention is then examined pursuant to two objectives—ensuring the availability of adequate and affordable housing to low-income households and encouraging homeownership. Present approaches are found wanting in both cases. The paper concludes with suggested modifications that appear to be reasonable on budgeting, efficiency, and political grounds.