A new rental housing program for middle-income Americans won approval from a House subcommittee yesterday.
Some of the money to pay for it would come from existing federal rental aid for the poor.
The proposal seeks to stimulate construction of about 120,000 new rental units for middle-income people next year by giving developers subsidies on the interest rates they have to pay. These would then be passed on in lower rents.
Families with incomes up to about $30,000 a year -- 150 percent of median family income -- would be eligible. The plan is sponsored by Rep. Thomas L. Ashley (D-Ohio), chairman of the House housing subcommittee. The Carter administration considered such a plan in December but decided against it.
Under existing law, only lower-income families, with incomes no higher than about $16,000, are eligible for rental aid from the government.
Ashley said the program is needed because housing costs, especially for new units, are so high today that "middle America is being dramatically priced out of the housing market."
However, representatives of several housing organizations charged that Ashley's proposal could hurt poor people because the money to fund the new middle-income program is to be taken from existing rental aid programs.
They said this means more poor people now receiving rental aid will be forced to live in older apartments instead of new units, and may even mean a net reduction in subsidized units for poor people if not enough older rental units can be found.
"Why fund a middle-income housing program from lower-income dollars," demanded Cushing Dolbeare of the National Low Income Housing Coalition.
Mayor Luther Jones of Corpus Christi, Tex., spokesman for the U.S. Conference of Mayors, said in Tuesday testimony to the Senate Banking Committee, which is considering a proposal similar to Ashley's, that "we cannot support diversion of funds from the low-income program to a new middle-income program. Senate Banking Chairman William Proxmire (D-Wis.) is sponsoring the Senate plan.
Money for the new middle-income plan would be raised by making the existing poor people's plan rely less on new units where costs are high, and more on existing, less costly units.
Rental housing units are already in tight supply.
President Carter, in his budget, asked for authority to subsidize rents for 300,000 units (in addition to units already in the program) for poor people in fiscal 1981. About 180,000 were to be newly built or substantially rehabilitated older units.
According to Ashley's figures, by reducing the number poor people's new rental units by about 40,000, the government would save enough money to fund the new middle-income program and also put 347,000 new or existing units for poor people under subsidy contracts.