Under $2 a Day in America, Part 3

March 7, 2012 at 5:25 pm

As we have explained, proposals from the President and House Republicans to raise rents on the poorest recipients of federal housing assistance could impose unaffordable burdens on many of them.  Some people might question whether the proposed increases are really that significant:  who couldn’t afford another $20-$25 per month?

Lots of people, as the new study from the National Poverty Center makes clear.

The study reports a 130 percent increase since 1996 in the number of families with children living on less than $2 per person per day.

About 300,000 of these extremely poor families, or about one in five, received housing assistance as of the beginning of 2011, the study notes.  This is consistent with our analysis, based on data from the Department of Housing and Urban Development, that some 330,000 families with nearly 700,000 children — as well as another 150,000 households without children — would face a rent increase under the House proposal.  Even more families would face increases under the President’s proposal.

Let’s take a three-person family that receives federal housing assistance and has a monthly income of $180 (that is, $2 per person per day or $6 per family per day).  If that family pays the current federal $50 minimum rent, the family has about $4.30 a day left after taking out the rent money.  With a rent increase of $25, that family would have about $3.50 a day after taking out the rent money.  At this marginal level of survival, that $0.80 a day reduction can make a big difference in whether a family can afford, say, diapers or the bus fare to a doctor’s appointment.

This study also rebuts the argument from the Administration and House Republicans that rents should go up to reflect inflation since Congress set the $50 minimum rent in 1996.  Yes, rents have gone up in the last 15 years, but incomes at the bottom have not.

As my colleague Jared Bernstein noted recently, a recent Congressional Research Service study found that inflation-adjusted incomes for the bottom 20 percent of the population fell by 6 percent between 1996 and 2006, before the recession did further damage.  And at the very bottom, the new National Poverty Center study shows that during the same period that the minimum rent has been flat at $50, the number of families with children so poor that they will be hurt by a $25 rent increase has more than doubled.

So, while the proposed rent increase may not seem like much to most of us, it would be to hundreds of thousands of our nation’s poorest families.

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More About Barbara Sard

Barbara Sard

Sard rejoined the Center as Vice President for Housing Policy in 2011 after 18 months as Senior Advisor on Rental Assistance to HUD Secretary Shaun Donovan.

Full bio | Blog Archive | Research archive at CBPP.org

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