The Center's work on 'Public Housing' Issues


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.

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.

Ryan’s “Opportunity Grant” Would Likely Force Cuts in Food and Housing Assistance

July 29, 2014 at 11:59 am

House Budget Committee Chairman Paul Ryan maintains that consolidating 11 safety-net and related programs into a single “Opportunity Grant” would give states the flexibility to provide specialized services to low-income people.  But providing these additional services would require cutting assistance funded through the Opportunity Grant to other needy people.  And because SNAP (formerly food stamps) and housing assistance together make up more than 80 percent of the Opportunity Grant, the cuts would almost certainly reduce families’ access to these programs, which are effective at reducing poverty — particularly deep poverty.

SNAP is an entitlement, which means that anyone who qualifies under program rules can receive benefits, and is heavily focused on the poor.  Over 91 percent of SNAP benefits go to households with incomes below the poverty line, and 55 percent goes to households in deep poverty — that is, households with cash incomes below half of the poverty line (about $9,800 for a family of three in 2013).

As a result, SNAP kept 4.9 million people out of poverty in 2012, including 2.2 million children.  It also lifted 1.4 million children out of deep poverty, more than any other benefit program.

Similarly, housing vouchers and other rental assistance lifted 2.8 million people — including 1 million children — out of poverty in 2012.

Chairman Ryan’s proposal to add new work requirements and provide individualized services to recipients of Opportunity Grant-funded assistance would surely require new staff and significantly raise administrative costs.  States would likely turn to SNAP for at least some offsetting savings:  it alone makes up more than half of the resources in the Opportunity Grant, and the Ryan proposal ends SNAP as an entitlement, eliminating eligible families’ guarantee to food assistance.  Rental assistance, which makes up nearly a quarter of the Opportunity Grant, is another likely target of cuts — though even today it serves only one in four eligible low-income families due to limited funding.

Whatever merit Chairman Ryan’s proposal for personalized services has, his Opportunity Grant could not possibly reach as many families as these existing programs serve.

Cutting food and housing assistance that lifts millions of people out of poverty and is effective at reducing hunger and homelessness in order to provide additional services to a smaller number of poor households isn’t a sound way to reduce poverty.

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.

Funding Bills Don’t Provide Enough Housing Help for the Most Vulnerable

June 20, 2014 at 2:20 pm

Congress may soon finalize 2015 funding for the Department of Housing and Urban Development (HUD).  Unfortunately, struggling working families, people with disabilities, and others unable to afford today’s high rents will see little housing relief in Congress’ funding, as I explain in a new post on TalkPoverty.org:

The House has passed its 2015 Transportation-HUD appropriations bill and the Senate may vote on its bill soon.  While the need for affordable housing continues to rise — the number of poor renter households who pay more than half their monthly income for housing costs has risen 28 percent since 2007 — and homelessness remains unacceptably high, the House bill cuts HUD funding compared to 2014, reducing the number of people receiving rental assistance.  The Senate allocated over $1 billion more to HUD than the House and its bill makes important investments in a few areas, but it fails to serve any additional very poor or homeless households.

These inadequate bills come as the Housing Choice Voucher program, the biggest federal rental assistance program, continues to suffer from losses due to sequestration in 2013, which imposed the steepest funding cut in the program’s 40-year history.  Over 70,000 fewer low-income families had vouchers at the end of 2013 than a year earlier.  Congress provided enough funding in 2014 to restore fewer than half of these lost vouchers, but the 2015 Senate and House bills won’t even renew all of the vouchers restored in 2014, locking in large voucher losses for years to come.

Although the funding bill before the Senate makes important improvements over the House bill, neither chamber has prioritized HUD’s housing programs, as my post explains.

These programs serve 10 million people in about 5 million households, most of whom are elderly, disabled or working parents with incomes below the poverty line and would be homeless or lack stable housing without federal rental assistance.  Yet only 1 in 4 people eligible for rental assistance receives it due to limited funding, and the unmet need is enormous. . . .

Even maintaining the status quo, as the Senate bill largely does, won’t help homeless children, who fall farther behind in school the longer they lack a home; it won’t help homeless adults with disabilities obtain supportive housing; and it won’t help more low-income seniors age with dignity in their communities. These bills are not good enough for our most vulnerable neighbors, and they shouldn’t be good enough for Congress.

Click here to read the full post.