Washington Post: This budget shift would make a bad housing situation worse

September 08, 2017 1:09 pm Categorised in: News
 September 8

IF WE needed more evidence that the country is undergoing a housing crisis, we can look no further than the Department of Housing and Urban Development’s latest assessment of worst-case housing needs. According to the biennial report to Congress, more than 8.3 million “very low-income renters” were eligible for, but failed to receive, federal housing assistance in 2015. This means there are 8.3 million more households living in sub-par conditions, or spending more than half their paychecks on rent, than there should be.

The 2015 figure is the second highest on record, behind the record of nearly 8.5 million households in 2011 because of the mortgage foreclosure crisis. The report attributes this to shifting preferences from homeownership to rentals, which have resulted in rising rents and a large gap between the number of very low-income renters and the federal assistance available. Though very low-income people in cities in the South and West face the greatest difficulties, the lack of affordable housing reaches across all racial and geographic demographics.

The numbers are alarming, and the Trump administration is threatening to make a bad situation worse. Its budget proposal includes the most dramatic cuts to HUD since the Ronald Reagan era. It proposes gutting federal housing assistance and federal funding for neighborhood improvements — the very initiatives that could reduce the affordable housing crisis. The White House claims it will redirect the savings from these HUD programs to “higher priority areas.” But what could be of higher priority than ensuring that millions of hard-working Americans have access to safe, affordable and adequate housing?

HUD Secretary Ben Carson has responded to his agency’s report by calling for a more “business-like approach” that boosts private-sector participation. Mr. Carson is not entirely wrong in claiming that private-sector involvement could help create more affordable housing. States and localities have seen varying degrees of success in streamlining permitting processes and curbing regulatory barriers. Yet, as advocates and experts have repeatedly pointed out, the private sector has proved unable to meet the needs of low- and middle-income families.

There are several common-sense policies that could help reduce the ongoing crisis. It is long past time to reform the mortgage-interest deduction, a costly tax break that favors higher-income homeowners. Reducing the mortgage cap could save billions that could be redirected to funding for the most vulnerable. The administration could also look into ways to make the low-income housing tax credit program more targeted and effective. But, with just a quarter of very low-income households receiving federal assistance, one thing is clear: Reducing federal funding where it is needed the most will hurt millions of families nationwide.

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