The Center's work on 'Public Housing' Issues

Charting a Mismatch in Housing Spending

December 18, 2013 at 11:32 am

Federal housing expenditures are unbalanced in two respects, as our new chartbook shows: they target a disproportionate share of subsidies on higher-income households and they favor homeownership over renting.  Low-income renters are far more likely than homeowners or higher-income renters to pay very high shares of their income for housing and to experience problems such as homelessness, housing instability, and overcrowding.

Federal rental assistance programs help these highly vulnerable families, but they are deeply underfunded and as a result reach fewer than one in four eligible households.  Families with children and non-elderly households without children or a disabled member face particularly severe shortages (see chart).

Moreover, budget cuts due to sequestration have forced reductions in the number of families that rental assistance can serve, and those cuts could grow deeper in the coming years.  Fortunately, the Murray-Ryan budget agreement that the House has passed and the Senate is expected to approve later today would make it possible to discontinue some of the sequester cuts planned in 2014 and 2015.

It’s critical that Congress use those resources to increase funding for housing programs targeted on the neediest families — especially for vouchers, the public housing operating fund, and homelessness assistance.  If policymakers don’t provide additional funding, unmet needs among poor renters will grow substantially and the imbalance in federal housing policy will become even more severe.

Click here for the chartbook.

One Goal of the March on Washington Gets a Bit Closer

August 28, 2013 at 11:39 am

On the 50th anniversary of the March on Washington for Jobs and Freedom, we want to highlight the President’s important recent step toward one of its goals:  the freedom to choose where to live without regard to the color of one’s skin.

The Fair Housing Act of 1968, a landmark civil rights law that followed the march, outlawed racial discrimination in the sale, rental, or financing of housing.  Now, some 45 years later, the federal government finally is proposing regulations to give meaning to the Act’s requirement that recipients of federal housing and community development funds “act affirmatively” to further fair housing.

That means “taking proactive steps beyond simply combating discrimination to foster more inclusive communities and access to community assets for all persons protected by the Fair Housing Act,” the proposed regulation explains.

Under the proposed rule, the Department of Housing and Urban Development (HUD) would provide public housing agencies (PHAs) that administer federal rental assistance, as well as states and localities that receive federal funds for community development or housing assistance, with data on racially and ethnically concentrated areas of poverty, assets like education and jobs, and related factors.  With public input, agencies and communities would then set fair housing goals and develop strategies to achieve them.

Some will likely criticize the rule as a new and unreasonable burden.  Such objections are misguided.

Congress — not President Obama — imposed fair housing obligations on federal grantees by enacting the 1968 law.  Indeed, Congress reiterated PHAs’ obligation to comply with civil rights laws and promote fair housing as recently as 2008.

HUD would provide the data, and PHAs and states and localities would set their own goals and strategies, as part of planning processes that they already must undertake under other existing laws.  What they could no longer do is simply check a box claiming that they comply with all fair housing requirements without giving any thought to the extent of fair housing issues in their area or what they are doing to address them.

This analysis will take some new effort for many, but PHAs can reduce the minor burden by joining with a local jurisdiction, regional group, or state in their assessment.

Public actions contributed to segregation, and public action is necessary to reduce its “heavy social cost.” Nowhere is this clearer than in the location of public housing, as this recent Urban Institute post explains.  But it’s true as well for recipients of Housing Choice Vouchers, too many of whom live in areas of concentrated poverty.

PHAs, as well as states and local jurisdictions, can do a lot to expand the housing choices of both public housing residents and voucher holders.  To cite just one example, they can make it easier for families to use vouchers to rent housing in safer neighborhoods with better schools.

HUD’s important rule is long overdue.

Senate Bill Reverses Sequestration Cuts to Housing Programs

July 22, 2013 at 1:52 pm

The Senate will vote tomorrow on whether to consider legislation to reverse most of the sequestration cuts to housing assistance next year, part of its approach of rolling back sequestration for defense and non-defense discretionary programs alike.

Our new report — with state-by-state data — contrasts the Senate funding bill for the Department of Housing and Urban Development (HUD) with its House counterpart, which would deepen the sequestration cuts to some housing programs.

As we’ve explained, this year’s sequestration cut will likely force state and local housing agencies to cut the number of low-income families using Housing Choice Vouchers by up to 140,000 by early next year.  That’s a sharp break from Congress’ bipartisan commitment over most of the program’s nearly 40-year history to renew assistance for at least the same number of families from year to year.

The Senate bill would restore most of those lost vouchers (see graph).  The House bill, in contrast, would lock in the elimination of vouchers for nearly 100,000 low-income families in 2014, roughly three-quarters of the number of those likely to be cut due to sequestration in 2013.

In public housing, which has been hit hard by three rounds of cuts since 2010, the Senate bill would provide a modest increase over this year’s post-sequestration level, whereas the House bill would cut it another 16 percent.

And, whereas the Senate bill would reverse this year’s sequestration cuts to the Community Development Block Grant (CDBG) and HOME block grant, the House bill would slash these programs below this year’s post-sequestration level by 47 and 26 percent, respectively.  CDBG and HOME funds help states and localities perform a host of important activities, including building and preserving affordable housing, improving damaged streets, sewers, and water systems in low-income neighborhoods, and providing community services to seniors and youth.

The Senate bill remains frugal.  Funding for most HUD programs would remain far below 2010 levels, adjusted for inflation (see this chart), even though the need for rental assistance has grown substantially.

A clear majority of senators support the bill, but it will likely need 60 votes to pass, including a number of Republicans, and it’s unclear how many Republicans will vote for it given differences between the parties over whether to replace sequestration with a balanced deficit-reduction package.  Moreover, Congress must resolve the differences between the House and Senate bills over the next several months.

Low-income families needing housing assistance — who have been hit hard by sequestration — have a lot at stake in the outcome.

A Tale of Two Bills

June 27, 2013 at 4:34 pm

Families that need housing assistance have been hit hard in recent years, as sequestration has deepened cuts to low-income housing and community development programs that the President and Congress made in 2011 and 2012.  Recognizing the harm caused by mindless sequestration cuts, both chambers of Congress approved their own 2014 budget plans earlier this year to replace it.  But, the funding bills that the House and Senate appropriations committees approved today for the Department of Housing and Urban Development (HUD) show that their overall budget plans are miles apart — and families that need assistance have a lot at stake in how this gap is bridged.

Recent cuts have fallen on rental assistance and community development programs (see chart).  In 2013, for example, total funding for HUD’s three major rental assistance programs — the Housing Choice Voucher, Public Housing, and Section 8 Project-Based Rental Assistance programs — is $3.6 billion, or nearly 10 percent, below the 2010 level, adjusted for inflation.  Meanwhile, states and localities have lost $1.2 billion (28 percent) in annual Community Development Block Grant (CDGB) funding and $1.0 billion (51 percent) in annual HOME funds.

Because of these cuts, tens of thousands of low-income families won’t get the housing assistance they need to avoid homelessness and other hardships.  While policymakers have recognized sequestration’s harm, however, the House and Senate proposals couldn’t be more different.

The House budget plan replaces sequestration with even deeper cuts in non-defense discretionary programs — including low-income housing and community development programs — while increasing funding for defense.  In line with this plan, the House HUD funding bill would lock in cuts in housing voucher assistance for more than 100,000 low-income families — nearly all of which include seniors, people with disabilities, or children — and cut funding for public housing, CDBG, and HOME to historically low levels, as we recently explained.

In contrast, the Senate HUD funding bill rolls back sequestration cuts and restores badly needed assistance to low-income families and communities (although funding in some areas would remain well below the 2010 level).  It can protect these critical safety net programs for low-income families because it is part of the Senate’s more balanced, yet fiscally responsible approach to addressing budget challenges.

The Senate bill would, for example:

  • Restore funding for most of the up to 140,000 Housing Choice vouchers that will be lost under sequestration.  (The President’s budget request for voucher renewals, which provides $400 million more for voucher renewals than the Senate bill, would restore all of the voucher assistance cut by sequestration.)
  • Roll back the deep cuts in homeless assistance, restoring Emergency Solutions Grant funding, for example, to help local communities prevent homelessness and provide housing assistance to homeless individuals and families.
  • Provide more adequate funding to operate and repair public housing, while also reversing the sequestration cuts in CDBG, HOME, and other HUD programs.

“Moving to Work” Compromise Would Cut Risk from Expanding Demonstration

June 25, 2013 at 4:16 pm

Major legislation to reform low-income housing assistance programs could include a significant, and risky, expansion of the Moving to Work (MTW) demonstration, which gives 39 state and local agencies sweeping authority to operate outside the laws and regulations that normally govern the public housing and “Section 8” Housing Choice Voucher programs, we explain in a new paper.  Despite its name, MTW is a broad and unwise deregulation initiative that is not mainly focused on promoting self-sufficiency.

Some of the program’s advocates have urged Congress to expand the demonstration sharply without placing significant new limits on participating agencies — a proposal that could jeopardize funding for housing programs, weaken tenant protections, and leave needy families without assistance.  The Government Accountability Office and the Department of Housing and Urban Development’s (HUD) Inspector General also have raised serious doubts about expansion, based on concerns that HUD has not adequately evaluated and monitored the existing demonstration.

Consider just one risk of an unconstrained MTW expansion:  it could lead to the block-granting of most public housing and voucher funds.  History suggests that could mean less funding for the programs over the long run.

HUD funds MTW agencies today mainly through block grants, which provide a fixed dollar amount that is adjusted from year to year for inflation and give agencies broad flexibility in how to use the funds.  By contrast, non-MTW agencies receive voucher and public housing operating funds based on the number of families they assist; generally they must use the funds in the program for which the funds are appropriated.

The President and Congress have cut funding considerably for most block grant programs.  The 2013 funding levels for the four major housing block grants were sharply below their inflation-adjusted 2001 funding levels, even before the 5 percent sequestration cuts were applied (see graph).  Policymakers have raised funding, however, for the voucher program and Section 8 Project-Based Rental Assistance (PBRA) — the two largest non-block grant housing programs — to keep pace with factors such as growth in the number of vouchers and rent increases that exceeded general inflation in the economy.

MTW block grants haven’t led to funding cuts so far.  But, currently, MTW covers fewer than one in eight vouchers and public housing units.  If the President and Congress expand MTW to the point where most units are funded through block grants, there is a strong chance that they will ultimately treat voucher and public housing operating funding more like they have treated housing block grant funding.  This could mean considerably deeper cuts in funding for state and local agencies, and ultimately, less assistance for needy families.

Legislation circulated last year by the House Financial Services Committee included a compromise that would expand Moving to Work but also reduce — though not eliminate — its potential adverse consequences by capping its scale, requiring rigorous policy evaluation, barring waivers of key tenant protections, and establishing a framework for the use of federal funds that would lessen the risk of cuts.  The President and Congress should expand MTW only if it’s critical to enacting broader legislation to strengthen federal rental assistance programs — but if so, these limits should be part of the plan.

Click here to read the full paper.