More About Will Fischer

Will Fischer

Fischer is a Senior Policy Analyst, focusing on federal low-income housing programs, including Section 8 vouchers, public housing, and the Low-Income Housing Tax Credit.

Full bio and recent public appearances | Research archive at CBPP.org


Rental Assistance Kept Over 3 Million People Out of Poverty Last Year, New Census Data Show

October 16, 2014 at 4:33 pm

Rental assistance programs kept millions of people above the poverty line in 2013, according to CBPP’s analysis of new Census data.  The findings highlight the central role that rental assistance plays in helping low-income Americans keep a roof over their heads.

Our analysis using the Census Bureau’s Supplemental Poverty Measure (SPM), which accounts for non-cash benefits and taxes as well as cash income, shows that rental assistance kept 3.1 million people, including 1.0 million children, out of poverty last year (see chart).  (The SPM methodology understates the value of some types of rental subsidies, so the actual impact on poverty likely is somewhat higher than these estimates indicate.)

The SPM data don’t break down what type of rental assistance kept these people out of poverty, but for most, it likely was one of the three primary federal rental assistance programs: Housing Choice Vouchers, Public Housing, and Section 8 Project-Based Rental Assistance.

Rental assistance could lift many more people out poverty, but due to funding constraints only one in four families eligible for assistance receives it.  Families without rental assistance are far more likely to experience homelessness and housing instability, which have been linked to negative health, education, and developmental outcomes over the long run.

Sequestration cuts to Housing Choice Vouchers in 2013 caused tens of thousands more families to be left without the assistance they need to afford stable homes.  Those cuts were only partly restored in 2014.  When it returns in November, Congress will consider legislation setting 2015 funding levels for many federal programs.  As they weigh their options, policymakers should place a high priority on protecting funding for rental assistance to avoid exposing more of the nation’s most vulnerable people to poverty, homelessness, and hardship.

[Revised] Key Lawmaker’s Bill Would Raise Rents on Poor While Lowering Them for Better-Off Households

September 24, 2014 at 10:54 am

A new bill from Rep. Randy Neugebauer (R-TX), chair of the House Financial Services Committee’s Housing and Insurance Subcommittee, would raise rents on some of the nation’s poorest families.  The bill apparently intends the rent increases to balance the possible cost of allowing the Department of Housing and Urban Development (HUD) to lower rents for families with somewhat higher incomes.  The rent increases could cause hardship — and even homelessness — for vulnerable families.

Today, families that receive rental assistance through Housing Choice Vouchers, public housing, and other HUD programs generally pay rent equal to 30 percent of their income, the maximum share that’s considered affordable.  State and local housing agencies can charge the lowest-income families a “minimum rent” of up to $50 a month.  Agencies also must allow public housing residents to pay a “flat rent” of their unit’s estimated market value, even if it’s less than 30 percent of their income (which is typically only for the highest-income residents).

The Neugebauer bill would raise minimum rents, requiring agencies to charge voucher holders and public housing residents at least $50.  The bill would also eliminate the cap on minimum rents, allowing agencies to raise rents for a large share of assisted families.  Private owners who receive direct HUD subsidies through programs such as Section 8 Project-Based Rental Assistance would have to collect rents of at least $50 a month — up from $25 — and HUD could raise this minimum without limit.

Housing agencies could choose whether to raise public housing and voucher minimums above $50, but many would likely do so, in part to cope with tight budgets in coming years.  Of the 39 agencies granted discretion through HUD’s “Moving to Work” demonstration to set rents outside the regular rules, more than a dozen have minimums above $50 and several have set them at $200 or higher.

As we’ve explained, many affected families would struggle to pay higher minimum rents.  Technically, housing agencies and owners must exempt families from minimum rents if they would cause the families hardship, but this requirement is poorly designed and places the burden on vulnerable families to apply for exemptions.  A 2010 study found that most agencies exempted less than 1 percent of the families subject to minimum rents.

The bill’s other provision would allow HUD to lower flat rents for some public housing residents.  In January, Congress established new standards intended to prevent housing agencies from setting flat rents below market levels, but some agencies have complained that the standards go too far and require above-market rents.  The Neugebauer bill would give HUD discretion to set flat rent standards, including authority to permit lower rents than the January law requires.  The lower rents may more accurately reflect local market rents.  But since families paying flat rents can opt instead to pay 30 percent of their income, this change isn’t needed to make their homes affordable.

The Neugebauer bill gets its priorities backwards.  The top priority of the nation’s rental assistance programs should be to help the neediest families afford housing.  Some adjustment to flat rents may be warranted but, if so, Congress should enact it without adding to the struggles of the most vulnerable rental assistance recipients.

Ryan Backs Reform to Mortgage Interest Deduction — But Bigger Changes Needed

August 27, 2014 at 1:34 pm

Endorsing House Ways and Means Chairman Dave Camp’s proposal to limit the mortgage interest deduction recently, Budget Chairman Paul Ryan explained that it “ought to be a middle class tax break, not something for higher-income earners.”  He’s right to criticize the deduction for favoring those at the top but, while Camp’s proposal moves in the right direction, policymakers should go further.

The deduction, which Camp would limit to mortgages up to $500,000 (cutting the current $1 million limit in half), is ripe for reform (see graph).  Some 42 percent of its benefits go to households with incomes above $200,000, the Joint Tax Committee estimates, while only 8 percent go to households with incomes below $75,000.  Close to half of homeowners with mortgages don’t benefit at all because they either don’t owe federal income taxes (though they typically pay substantial payroll taxes and/or state and local taxes) or don’t itemize deductions.

Federal housing spending as a whole is poorly matched to need, and policymakers could do more to rebalance it if they not only capped the deduction for the largest mortgages but also converted the deduction to a credit worth a fixed percentage of a household’s mortgage interest.

Several bipartisan plans — including those from President George W. Bush’s tax reform panel and the chairs of President Obama’s fiscal commission, Erskine Bowles and Alan Simpson — have backed this approach, which would trim benefits for higher-income households while expanding them for many middle- and lower-income households.

Policymakers should redirect part of the savings from reforming the mortgage interest deduction (after deficit-reduction goals are met) to help low-income renters, for example by creating a renters’ tax credit.  Low-income renters — including elderly people, people with disabilities, and working-poor families with children — are more likely than other groups to struggle to keep a roof over their heads, but federal housing policy provides far more help to homeowners and higher-income households.

Why the Ryan Plan Should Worry Those Concerned About the Affordable Housing Crisis, Part 2

August 5, 2014 at 11:52 am

House Budget Committee Chairman Paul Ryan’s proposal to consolidate 11 safety net and related programs, including the four largest federal rental assistance programs, into a single block grant to  states risks significant funding cuts to housing assistance that helps 4.7 million low-income families, as we explained last week.  Today, we’ll describe how the combination of those cuts, and the possible elimination under Ryan’s plan of program rules that ensure housing stability and affordable rents, could undercut rental assistance programs’ effectiveness and put substantial numbers of vulnerable families at risk for homelessness.

Federal rental assistance programs are effective.  They sharply reduce housing instability and homelessness and lift 2.8 million people out of poverty (with the bulk of these impacts coming from the programs included in the Ryan plan).  These effects, in turn, are linked to educational, developmental, and health benefits that can improve children’s long-term life chances.

But Chairman Ryan’s proposal, which would give states broad latitude in spending block grant funds, could enable states to jettison federal rules that are essential to the rental assistance programs’ success, or even to eliminate one or more programs.  The drops in funding that likely would occur over time would increase the risks that states would make damaging changes to housing assistance programs.  The following actions are among those states could take:

  • They could cut the number of families receiving rental assistance.  Such cuts would cause the long waiting lists to grow longer and could occur despite Ryan’s promise that his plan would honor existing rental assistance contracts. Most assistance included in the proposed Opportunity Grant is provided through the Housing Choice Voucher and Public Housing programs, which are typically funded annually (with assistance provided through annual contracts).  Most contracts with private owners under the other two rental assistance programs that Ryan would fold into the block grant also are short term, so this protection would not last long.  Moreover, if states seek to shift some funds from housing programs to other uses and don’t renew a substantial share of these contracts or maintain public housing properties, cities and towns — which may have little say in state decisions on how to use the Opportunity Grant funds — could see housing developments become unaffordable for many low-income households.  And if there is a perception that a state could fail to renew contracts or maintain rental subsidies, that almost certainly would make it more difficult and costly to attract private investment for affordable housing.
  • They could reduce per-unit subsidy levels, since the rules that set those levels in existing rental assistance programs would no longer apply.  In the Housing Choice Voucher program (which allows most participants to rent modest units of their choice in the private market), such cuts could force families to rent lower-priced units in higher-poverty neighborhoods with high crime rates and poor schools.  The other three programs that Ryan would include in the Opportunity Grant (Public Housing, Section 8 Project-Based Rental Assistance, and rural rental assistance, which the U.S. Agriculture Department administers) tie subsidies to particular developments; in those programs, subsidy cuts could make it difficult to pay for adequate building maintenance — already a major problem among Public Housing developments — or for owners to make units available to poor families at an affordable rent.
  • They could shift costs to participating families by raising rents.  Rent rules currently require most assisted families to contribute 30 percent of their income for housing, a share consistent with commonly accepted standards of affordability.  Rental assistance fills the gap between this contribution and actual costs, within reasonable limits that the federal and local agencies set.  Some poor families who may not be able to pay higher rents might find they could no longer afford their apartments if their rents rose substantially.

Helping Renters Afford Their Homes

July 16, 2014 at 4:31 pm

Today’s New York Times “Room for Debate” forum asks “Should Housing Policy Support Renters More?”  It’s an important discussion since, as we explain in this chart book, federal housing policy is imbalanced in two ways.  It favors homeowners over renters, and it targets a disproportionate share of subsidies on higher-income households (see chart).

This is the case even though, as Henry Cisneros, former Secretary of the Department of Housing and Urban Development, points out, “the primary focus of federal housing policy should be to help those most in need.”  Need among renters is rising.  As MacArthur Foundation president Julia Stasch notes, “increasing rents, stagnant wages and inadequate federal support have made rental housing less affordable for more people.”  Low-income renters — including veterans, seniors, people with disabilities, and working families — are far likelier than homeowners and higher income households to need assistance to keep a roof over their heads and make ends meet.

Three ongoing policy debates offer opportunities to move in this direction:

  • Most immediately, Congress should provide more resources in 2015 funding bills to restore Housing Choice Vouchers and other low-income rental assistance that was cut as a result of sequestration in 2013.  Those cuts prevented thousands of low-income Americans from receiving the assistance they need to escape homelessness and housing instability, both of which have been linked to developmental, health, and education problems in children.
  • If tax reform moves forward, Congress should replace the mortgage interest deduction with a less-expensive, better-targeted credit that would trim subsidies for higher-income families while expanding them for middle- and low-income homeowners.  It should also use some of the savings from this reform to fund a new renters’ tax credit that would address part of the unmet need for housing assistance among the lowest-income renters.
  • If Congress reforms the housing finance system, it should use new financing fees for robust funding — like that provided in the reform bill that the Senate Banking Committee approved in May 2014 — to develop and rehabilitate affordable rental housing through the National Housing Trust Fund.