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Housing prices putting squeeze on working families, study finds.

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WASHINGTON - More than 3 million working families, most of them homeowners, are struggling to keep a roof over their heads as housing trouble moves from its poor urban origins into middle-class suburbs.

The number of working families facing critical housing problems increased by 440,000, or 17 percent, between 1995 and 1997 as a result of soaring rents and home prices coupled with stagnant wages, according to a study released Friday by the National Housing Conference.

The study focused on moderate-income families who spend half or more of their income on housing or who live in decrepit houses. Most - 51 percent - own their own homes.

Surprisingly, 1.3 million live in suburbs, while 1.2 million are in cities and 500,000 in rural areas, the study said.

Because most federal and local housing programs assist only the poorest of the poor - for whom housing problems are most severe - thousands of law-enforcement officers, clerical workers, teachers and other moderate- income workers must fend for themselves while being slowly priced out of local housing markets.

"This is the first time we've got a national picture of this problem as it moves up the income scale and goes from being a poverty- and welfare-based problem to one affecting people in the workday world. We believe the housing needs of working families clearly justify a higher place on the policy agenda," said study co-author Michael Stegman, director of the Center for Community Capitalism at the University of North Carolina at Chapel Hill.

No state better illustrates the problem than California, where 278,000 new jobs have been created since 1984, but only 78,000 new homes, said F. Gary Garczynski, vice president of the National Association of Homebuilders. If unaddressed much longer, the problem could hurt business development, he warned.

"Homes are where jobs go to spend the night," Mr. Garczynski said at a news conference where the study was unveiled. "We have to remind our governors, mayors and town councils about that fact."

Nationally, 10 percent of households with at least one full-time worker are faced with crisis-level housing cost and quality problems, according to the study, which is based on census data. The study classifies "working families" as those earning at least $10,700 per year but not more than 20 percent above the median family income for their areas.

In a detailed look at 17 metropolitan areas, the study found that working families in many areas of the country face far worse housing problems than national averages suggest.

In San Jose, Calif., where housing costs are among the nation's highest, 27 percent of working families spent at least half their income on housing or lived in shoddy quarters, the study found. In San Francisco, the comparable figure was 26 percent; it was 20 percent in Boston and Tampa, Fla.

"We have to do more to provide adequate housing for these families, who work hard and save carefully, only to find there is not enough housing to meet their needs," said Paul Reid, executive vice president of the Mortgage Bankers of America.

Solutions can come from both public and private endeavors, Mr. Reid said. He urged local groups to look at regulatory hurdles that may be blocking housing development and to adapt strategies that have spurred affordable housing construction for low-income people.

Tax-exempt development bonds and the low-income housing tax credit are two possible models, Mr. Reid said.

Cleaning up the nation's 500,000 brownfields - abandoned properties, typically in urban areas - would provide additional building space, Mr. Garczynski said.

He also called on Congress to pass legislation that would allow the use of community development block grants to provide mortgage assistance and down payments for home purchases.

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