Do Housing Policies Contribute to the Cycle of Poverty in the United States?

Abstract

Housing has long been thought of as “a merit good”, with the thought that all U.S residents deserve to have a decent and suitable living environment. A merit good is defined as a good or service that the government feels is under consumed and which ought to be subsidized so that consumption does not depend on a consumer’s ability to pay. Market failures have put low-income families at risk for homelessness; this is a result due to increasing housing costs paired with decreasing real incomes (income that has been adjusted for inflation). With the declining income of the median renter, and housing expenditures increasing, renters are decreasing their consumption of other goods