More About Douglas Rice

Douglas Rice

As a Senior Policy Analyst, Rice's work focuses on the impact of federal housing policy on low-income families.

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


Sequestration’s Effects Linger for Housing Agencies

September 16, 2014 at 7:47 am

The 2013 sequestration budget cuts caused severe shortfalls at state and local housing agencies that administer federal rental assistance programs, and the cuts are continuing to affect low-income families, as the New York Times reports.  Most agencies sharply reduced the number of families they assisted by not reissuing housing vouchers when the families using them left the program.  These cuts have continued into 2014, despite the fact that Congress partly reversed sequestration this year.  As of March, housing agencies were assisting some 90,000 fewer low-income families due to sequestration.

The agencies are passing the budget strain on to low-income families in other ways, too.  In New York, the city’s Department of Housing Preservation and Development is raising the rent for nearly one-third of the 32,000 low-income families using its housing vouchers.  This forces families to make tough choices: either absorb rent increases of as much as several hundred dollars per month or move to a smaller, lower-priced unit, if they can find one in New York’s tight rental market.

Such choices are particularly difficult for seniors, who are disproportionately affected by the rent increases in New York.  Many have lived in their current apartment for many years, and they may have difficulty navigating the process of finding, moving, and adapting to a new apartment and neighborhood.

Housing authorities across the nation — from Napa, California, to Alexandria, Virginia — have continued to make similar changes in response to sequestration.  While Congress partly reversed the sequestration cuts in 2014, many housing agencies have been reluctant to reverse rent increases or cuts in the number of families they’re assisting, due in large part to the uncertain budget outlook for 2015.

Congress has yet to complete the fiscal year 2015 budget for the Department of Housing and Urban Development (HUD), which administers the housing voucher program and most other federal rental assistance programs, and it likely won’t until after the November elections.  Moreover, the HUD funding bills approved by the House and the Senate Appropriations Committee would increase housing voucher funding modestly, but not enough to cover the increase in program costs due to rising rent and utility costs.  As a result, they would risk locking in most of the sequestration voucher cuts.

As Congress completes the 2015 budget this fall, it should make a priority of fully restoring the vouchers lost to sequestration, or current voucher holders will face higher rents, while families on waitlists continue to pay unaffordable rents, risking homelessness if they fail to make ends meet.

Why the Ryan Plan Should Worry Those Who Are Concerned About the Affordable Housing Crisis, Part 1

July 31, 2014 at 12:33 pm

A centerpiece of House Budget Committee Chairman Paul Ryan’s poverty plan is the proposal to consolidate 11 safety net programs — including four housing assistance programs — into a single, flexible block grant to states.  Among its downsides, this proposal threatens to lead to reductions in funding that provides housing assistance to millions of low-income families and individuals.

My colleagues have already set out some of the reasons to be concerned by Chairman Ryan’s proposal:

  • Block grants have proven to be easy targets for funding cuts, in part because their inherent flexibility makes it difficult to demonstrate how cuts would affect needy families and communities.
  • Total funding to assist low-income families — from federal, state, and local sources combined — likely would also decline, because broad block grants afford states opportunities to use block grant funds to replace state and local funds now going for similar services.

Because housing assistance and SNAP make up more than 80 percent of Ryan’s Opportunity Grant, any cuts in block grant funding would very likely reduce families’ access to these programs, as my colleague LaDonna Pavetti has explained.

The history of housing and community development program funding shows the risk of funding cuts that rental assistance programs face under Ryan’s plan.  Funding for flexible block grant programs such as the Community Development Block Grant (CDBG), HOME (which helps states and localities develop and preserve affordable homes for owners and renters), and the Native American Housing Block Grant has fallen sharply over time.  Meanwhile, programs that provide more narrowly prescribed forms of assistance to low-income families and that Congress funds separately each year — a category that includes housing vouchers, rural rental assistance, Section 8 Project-Based Rental Assistance, and Public Housing, the four rental assistance programs that Ryan’s proposal targets — have generally avoided reductions (sequestration in 2013 notwithstanding). (See chart.)

The reasons are easy to understand.  For example, HUD provides Congress every year with precise estimates of the cost of renewing the Housing Choice Vouchers that assist more than 2 million low-income families.  If Congress fails to provide sufficient funding to renew the vouchers, some of those families will lose assistance (and possibly their homes).  In contrast, policymakers can justify cutting a block grant by claiming that local agencies can avoid cutting direct assistance to families by using their flexibility to shift funds from other activities.

Cuts in rental assistance would fall mainly on low-income people who are elderly or have disabilities and working-poor families with children.  More than 80 percent of households with rental assistance in 2010 were elderly, had a disability, worked, or had recently worked.  (2010 is the most recent year for which these data are available to us.)

Rising rents and stagnant incomes have left increasingly more low-income Americans unable to afford decent, stable housing without cutting back on other basic needs.  Already fewer than one in four eligible low-income families receive rental assistance due to funding limitations, and waiting lists are long.  The cuts that would likely result from the Ryan plan would make this shortfall more severe and thus leave more families struggling to pay the rent and keep their homes.

Better Federal Policy Needed to Address Rental Affordability Crisis

July 2, 2014 at 4:24 pm

Housing has become increasingly unaffordable for many Americans, especially those with the lowest incomes, as a recent report from Harvard’s Joint Center for Housing Studies documents and I pointed out earlier this week.  And federal policy is helping fewer families meet this challenge.  The number of households experiencing “worst-case needs” ­— those with very low incomes that pay more than half their income toward housing or live in severely inadequate housing — has risen dramatically, but the share of households eligible for assistance that receive it has fallen to just 23 percent (see chart).

These trends have significant negative consequences for low-income families, as Harvard’s report details.  To afford housing, they may be forced to live in neighborhoods with high crime rates or in inadequate housing.  Families that pay more than half their income for housing also spend far less on other basic needs, including 39 percent less on food, 65 percent less on health care, and 66 percent less on transportation, than families with affordable housing.

Federal rental assistance is a lifeline that can help prevent those kinds of negative results for low-income families.  About 5 million low-income households receive assistance to afford decent, stable, modest housing while paying about 30 percent of their income toward rent.  Rental assistance programs reduce poverty, homelessness, and housing instability, and help families afford decent quality housing in safer neighborhoods.

Nevertheless, Congress has cut these programs in recent years.  Between 2010 and 2014, Congress cut funding for Housing Choice Vouchers by $528 million, public housing by almost $1.6 billion, and housing for the elderly and people with disabilities by almost $600 million, adjusted for inflation.  These cuts have kept tens of thousands of eligible families from receiving rental assistance.  As we’ve explained, for example, last year’s sequestration cuts dropped the number of families using Housing Choice Vouchers by more than 70,000.

Unfortunately, Congress may provide little relief in the 2015 budget.  While Congress provided sufficient funding in 2014 to restore half of the vouchers lost to sequestration, the 2015 spending bills that the House recently approved and the Senate may consider this summer fail to renew those restored vouchers.  Congress can and should do more to help low-income families live in safe and affordable homes.

New Report Documents Growing “Crisis of Affordability” for Renters

June 30, 2014 at 3:59 pm

More than 80 percent of households earning under $15,000 a year — roughly equivalent to full-time work at the minimum wage — paid more than 30 percent of their income for housing in 2012, a new report by Harvard’s Joint Center for Housing Studies finds.  The federal government and many private-sector landlords and lenders consider housing unaffordable if it exceeds 30 percent of household income.

The shortage of affordable housing, which is hitting the lowest-income families the hardest, seems to be growing worse.  The number of households earning under $15,000 paying more than half of their income for housing jumped by over 2 million from 2002 to 2012 (see chart).  In fact, in that latter year, 69 percent of households earning under $15,000 paid more than half of their income for housing.

The report documents a growing “crisis of affordability” for renters, driven by a widening gap between rental costs and renter incomes.  The gap began growing well before 2007 but worsened during the Great Recession.  The median renter income plummeted 13 percent between 2001 and 2012, while median rents rose 4 percent.

Federal policymakers have made things worse by cutting rental assistance.  For example, the number of families using Housing Choice Vouchers, the most common form of federal rental assistance, fell by more than 70,000 in 2013 due to across-the-board sequestration cuts.  Congress provided funds to restore up to half of these vouchers in 2014, but the 2015 spending bills that the House and Senate appropriations committees have approved for the Department of Housing and Urban Development don’t renew all of those vouchers and risk locking in the full sequestration cuts.

Some 5 million low-income households receive federal rental assistance, mostly working families with children, seniors, and people with disabilities.  Studies show that vouchers and other types of rental assistance are extremely effective at reducing poverty, homelessness and housing instability.  With a stable home — the foundation necessary for families to thrive —becoming unaffordable for more Americans, policymakers should be strengthening these programs, not cutting them.

Update: Senate Housing Bill Improves on House But Still Would Lock in Large Voucher Losses

June 6, 2014 at 3:52 pm

The 2015 funding bill for the Departments of Transportation and Housing and Urban Development (HUD), which the Senate Appropriations Committee approved yesterday, is a significant improvement over its House counterpart but still falls short in major respects.

As we’ve reported, the across-the-board sequestration cuts eliminated housing vouchers for some 70,000 low-income families in 2013.  Congress provided enough funding in 2014 to restore roughly half of those lost vouchers.

But the 2015 spending bill that the House Appropriations Committee approved on May 21 would likely lock in the loss of more than 70,000 vouchers in 2015.  The Senate bill provides only $26 million more than the House bill to renew vouchers in use in 2014.  This means that, like the House bill, the Senate bill provides enough funding to renew all vouchers in use this year only if housing agencies either don’t use their available 2014 funds to restore lost vouchers this year or freeze subsidies in spite of rising rent and utility costs.

In other words, the bill would either lock in the loss of more than 70,000 vouchers (see graph) or require families with meager resources to absorb significant increases in housing costs next year.

Also like the House bill, the Senate bill would make little progress against homelessness.  While both bills include $75 million for new rental assistance for homeless veterans and the Senate bill raises homeless assistance grants by $40 million over last year’s level, the latter is only enough to renew existing grants.  And any progress against homelessness is doubtful if Congress locks in sequestration cuts in vouchers, which are an important part of state and local efforts to reduce homelessness.

In some other areas, the Senate bill made significant improvements over the House bill with the roughly $1 billion more for HUD housing and community development programs it had available.  (The Senate Appropriations Committee allocated $2.4 billion more for the Transportation-HUD bill as a whole than the House did.)  The key areas of improvement include:

  • $6.38 billion for public housing operations and capital needs, $200 million more than the House bill and $100 million above the 2014 level.  The Senate bill also raises to 185,000 the number of public housing units authorized to participate in the Rental Assistance Demonstration and provides $10 million in new funding for this promising initiative, which enables public housing agencies to obtain more private capital for repair needs.  And it provides $90 million ($65 million more than the House bill) for the Choice Neighborhoods Initiative to revitalize public housing, other assisted housing, and surrounding distressed neighborhoods.
  • $1.55 billion for state and local agencies to administer vouchers, $205 million more than the House bill and $55 million above the 2014 level.  While the Senate funding level is still $150 million below the President’s request, the added funding over the House level is important to enable agencies to run the voucher program effectively.
  • $950 million ($250 million more than the House bill) for the HOME Investment Partnerships program, which helps states and localities develop and preserve homes for lower-income owners and renters.

To be sure, Congress faces severe budgetary constraints in writing the fiscal year 2015 appropriations bills.  Yet policymakers should place high priority on protecting key safety net programs, including rental assistance programs — which enable more than 5 million low-income families to avoid homelessness and other hardships.

Congress should do more to protect low-income families as the House and Senate bills move forward in the next two weeks.