Props for the Future

In a flurry of budget cutting last January, the Nixon Administration clamped an abrupt moratorium on all Government-subsidized housing for low-income families. Since then, tight money and towering interest rates have put an equally prohibitive crimp in the house-buying plans of middle-income families. As a result, housing starts in the U.S. have severely declined from once record levels; last month they sank to a yearly rate of 2,045,000, their lowest level since October 1971.

Last week, in his long-awaited housing message, President Nixon tossed out a bundle of proposals for stimulating home building at all price levels. He also presented a plan for providing direct cash payments to low-income buyers as an alternative to subsidized housing.

Many of the President's recommendations for stimulating construction require congressional approval. These include 1) offering tax credits of up to 3 1/2% to financial institutions supplying home loans, 2) raising the Federal Housing Administration loan limit on a single-family house from its present $33,000 to $40,000 or more, and 3) providing legislation to enable families to pay only partial fees for several years after they purchase homes, then later, after they have reached higher-income years, to make larger mortgage payments.

An experimental program of direct housing payments to help low-income families rent or buy homes has been operating for some time in ten cities. If Congress approves, the President wants to expand the program gradually. If its proposals are acted on, the Administration estimates, they could add 150,000 starts to the housebuilding industry's forecast of about 1.8 million next year.

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