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The Housing Crisis No. 149

Adopted 2001
Reaffirmed 2003
Amended 2005
Revised 2006

The nation has reneged on its 1950 promise of a decent home for all Americans, and, especially since the 1980s, the federal government has abdicated its responsibilities to low-income families. The Section 8 Housing Voucher Program is vital, but needs reform, and its funding must be increased substantially. Yet total reliance on market forces to fill the need is misguided. The market reflects an economy of growing inequality and spurs the construction of highly profitable expensive housing. The federal government alone can fill the need for affordable housing for low-income housing.

The National Low Income Housing Coalition has documented that millions of low-and moderate-income Americans in all parts of the country now facing a growing crisis in affordable housing.

1. 95 million Americans, About one-third of the nation, had face housing problems, including high cost burden some costs, overcrowding, poor quality and homelessness, two-thirds of these are low-income.
2. 65 million people with housing problems were low-income, as defined by federal policy (household income at or less than 80% of the area median.)
3. 23 million extremely low-income people, nearly 1/10 (8.6%) of the people in the United States, had housing problems. We face a shortage of 1.6 million units of affordable housing. Between 2003 and 2005 the supply of low-cost rental units (those charging less than $600 a month) decreased by 1.5 million; the supply of very low-rent units decreased by 800,000; while the supply of moderate and high-rent units increased by 600,000 units.
4. 20 million A third of the low-income Americans facing housing problems were children.
5. The crisis of affordable housing intensified over past five years. The Harvard-MIT Joint Center for Housing Studies reported that as of 2004:
6. Nearly 1/3 of American households spend more than 30% of their income for housing.
7. 13% spend more than 50% of their income for housing.
8. 2 million households live in severely inadequate units.
9. 2.5-3.5 million Americans are homeless at some point during a given year.

Even middle- and upper-middle income communities are now facing this serious problem. The California Budget Project of the Center on Budget and Policy Priorities reports that even in Orange County, 47.3% of households were spending more than 30% of income on housing, including 21.8% of households were spending more than 50% of their income on housing, including 88.6% of Orange County residents earning less than $20,000 per year. Metropolitan areas throughout the United States report similar problems in the face of the rapidly escalating housing market.

In 1950, Congress adopted the national goal of a decent home and suitable living environment for every American family. In 1968 Congress authorized construction or rehabilitation of 6 million low income housing units, 600,000 a year for ten years. If we had done this and continued to provide housing assistance at that level, we would now have more than 22 million families living in federally subsidized housing, and we would have been gaining on the problem, not falling behind.

However, the number of assisted households peaked at 5 million in the mid-1990's and has been dropping ever since because federal assistance contracts expired because of demolitions, and because many subsidized housing owners exercised their option to withdraw from the program when their contracts lapsed.

The federal investment in affordable housing continues to drop. In January 977, the outgoing Ford administration submitted to Congress a budget request that would have funded 506,000 additional low income housing units (400,000 Section 8, 6,000 Indian Housing, 100,000 home ownership.) No President since has proposed a program on this scale.

In fact, despite the growing crisis of affordable housing, the Bush administration is advocating a significant reduction in federal support in this area. The President proposes $28.5 billion for the entire HUD budget, a cut of 11.5% from FY '05 levels.

Nothwithstanding a backlog of $21 million of public housing modernization needs, the President proposes a 10% cut of $273 million.

The President proposes $3.5 billion in public housing operating expenditures, although this would meet only 89% of the operating costs facing public housing authorities.

The President proposed the total elimination of the Community Development Block Grant program, a major source of support for low- and moderate-income housing revitalization for more than 30 years. While the Congress has rejected the outright elimination of this program, it could face significant reductions in the FY 2006 budget process.

In response to the President's ill-advised recommendations, ADA urges Congress to reaffirm the national commitment to providing affordable housing to every American established more than 50 years ago. Specifically, we urge the following:

1. Expanding the successful Low Income Housing Tax Credit and HOME Housing Partnership programs to address the shortage of affordable housing for the most renter households and providing deeper subsidies to make the units produced affordable to low-wage workers, the elderly and others with special needs who could not otherwise obtain decent housing. In addition, the existing stock of subsidized low income housing should be preserved through provision of the funds and program changes required, including facilitating the sale or transfer of developments from for-profit to non-profit ownership.
2. Offsetting the loss of public housing for very low-income families through either demolition or changes in admission policies by expanding the supply of public housing targeted to low income people, particularly in areas of employment opportunity and in mixed income developments.
3. Integrating low income housing with neighborhood revitalization and improved education and employment opportunities and access to supportive services and counseling as necessary.
4. Continuing to support housing developments and neighborhood revitalization by neighborhood-based community development corporations and other nonprofits and through increased funding for the Community Development Block Grant program.
5. Establishing a federal housing trust fund to capture the income generated by the FHA and Government National Mortgage Corporation rather than returning it to the general funds of the Treasury, as well as from other sources.
6. Improving the greatly expanding rental assistance programs so that funding constraints do not force eligible households to wait years to get vouchers and so they can obtain housing when they do get them.
7. Continuing and expanding the support for home ownership, including measures to assist current low-income owners who may have difficulty in maintaining their units.
8. Addressing the barriers of housing discrimination through rigorous enforcement of fair housing laws, including standards for state and local governments receiving federal housing and community development grants.
9. Housing is more than a basic human need. Lack of decent, stable, affordable housing has a major impact on health, education, employment and family stability. ADA recognizes that there are many ways to address our housing problems and to meet our housing needs and that neighborhoods and communities vary widely. But there is no way to address these problems at the scale necessary without dramatically expanding federal housing assistance programs for low income people - perhaps even to the level of support now provided through the tax system to more affluent home owners.

No. 149
Social and Domestic Policy

Federal Legislation Introduced:

Source: www.thomas.loc.gov