Home Finance and Housing Quality in Ageing Neighbourhoods

Abstract

This paper is directed to the problem of mortgage financing for old, inexpensive, one- and two-family homes that are not competitive with new construction, but are at or above minimum code standards; and to the relationship of this problem to the level of expenditures for the maintenance and improvement of these homes. In American cities, it appears that such structures constitute as much as 15 percent of the total occupied inventory.². Moreover, numerous additional. dwellings, now in serious violation of local codes, were at some prior time no doubt in this category. The matter of adequate financing for ageing sectors of the stock is, therefore, a large component of the total residential finance problem. It is also a subject which American housing policy, in its emphasis on new construction and on rehabilitation programmes that operate largely outside normal market mechanisms, has almost completely ignored.

I wish to thank Morton S. Baratz, Cushing Dolbeare, Christy Emerson, Frank Kristof, Grace Milgram, and Sue Moyerman for their many helpful criticisms and suggestions.