Federal housing policies play a critical role
The federal government fills a role that nothing else can fill
For example, housing assistance raised 4 million people out of poverty in 2012, including 1.5 million children, and has significantly reduced homelessness. (Center on Budget and Policy Priorities)
“The federal government also plays a critical role in convening and providing leadership to states and local communities to develop and implement strategies for addressing housing insecurity and homelessness in our nation. For example, HUD, the Department of Veterans Affairs, and the United States Interagency Council on Homelessness worked together with states and local communities to address veterans’ homelessness, which has seen nearly a 50% reduction since 2010. That achievement was largely made possible by increased federal funding directly targeted at those in need of assistance.”
“The role of federal affordable housing investments is even more important given the limited ability of the private market to address these needs. In fact, the private market often cannot provide rental housing that is affordable to the lowest income households without public subsidy (Joint Center for Housing Studies, Harvard University, 2015). Private sector housing developers have testified before Congress that without federal resources, the private market would not invest in affordable housing at all.”
We know what works. Solutions at the federal level are feasible, realistic, and effective.
The ambitious long-term goal of the campaign is to expand low-income households’ access to decent, affordable homes through federal policies that:
- Bridge the growing gap between renter incomes and rising housing costs through a variety of rental assistance strategies that include rental subsidies to landlords and tax credits. Federal policymakers can efficiently expand federal rental assistance for low-income renters using existing programs such as the Housing Choice Vouchers, mobility assistance, and the Rapid Rehousing programs. Targeting rental assistance through these programs could:
- Improve the affordability of homes for low-income households
- Ensure that families’ out-of-pocket rent costs are moderated so they can still afford other life necessities such as nutritious food, transportation, and health care
- Create opportunity vouchers to enable poor families with children to live in high-opportunity neighborhoods with access to strong schools, resources, and amenities
- Enable community-based housing for seniors and people with disabilities, thereby preventing unnecessary institutionalization and reducing public health and other costs.
Expanding these programs over the next decade can be achieved through an investment of resources via the federal appropriations process. Additional support could also be included in infrastructure, poverty, or other major housing legislation.
- Ensure housing stability for people experiencing major life changes (i.e., job losses, serious illness, or other economic shocks) through the creation of flexible tools and crisis assistance. Federal tools and resources should be targeted at families during these periods of extreme economic stress. In turn, it would improve the social and fiscal well-being of communities and states. Resources should be used to:
- Provide emergency aid for individuals and families facing severe economic hardship
- Provide legal assistance for families facing eviction and other threats to housing security
- Crisis assistance funds should be set aside through the federal appropriations process which could be distributed through new or existing mechanisms, including grants to states from HHS or HUD.
- Increasing the affordable housing stock for low-income people through deeply targeted production programs and rental supply investments. This will require significant funds to boost and/or maintain the supply of rental units available to those at lower income levels. Existing federal programs, including the national Housing Trust Fund, can be used as the foundation for expanding rental housing stock, and additional investments in infrastructure can also be made. Investments in rental supply financing can be made through federal budgeting and appropriations cycles, as well as through legislation that invests in infrastructure or housing finance reform.
The Opportunity Starts at Home campaign will work to make these long-term goals national and political priorities, and promote bold solutions wherever opportunities present themselves. While it will take years to fully achieve these goals, significant progress is possible over the next few years through a range of strong policies and resources.
In the short-term, the campaign will act to defend existing housing assistance from harmful cuts and, as opportunities arise, make gradual gains towards the long-term goals described above. The short-term policy agenda includes priorities such as:
- Protect and expand adequate funding to renew Housing Choice Vouchers and other rental assistance. Housing Choice Vouchers help people with low incomes afford housing in the private housing market by paying landlords the difference between what a household can afford to pay for rent and the rent itself, up to a reasonable amount. The Housing Voucher program is HUD’s largest rental assistance program. With a 2017 budget of $20.3 billion, it assists 2.2 million households, half of which are seniors or people with disabilities, and most of the rest are families with children. For two decades, policymakers and Congress have used housing vouchers to expand rental assistance – for instance, the creation of more than 80,000 new vouchers has played a key role in reducing veterans’ homelessness since 2010. But the Budget Control Act of 2011 spending constraints have sharply limited this growth, and the 2013 sequestration cuts even caused a steep (but temporary) reduction in the number of households receiving aid. Moreover, the cost of renewing assistance rises nearly every year because of rising private market rents, which makes it challenging for Congress to even provide the funds needed every year to avoid cuts. While it is too early to estimate housing voucher funding needs going forward, a significant increase is likely to be required to prevent a reduction in the number of households assisted.
- Protect and expand the national Housing Trust Fund to help build, rehabilitate, preserve, and operate rental housing for extremely low-income people. The national Housing Trust Fund is a dedicated funding stream with the primary purpose of closing the gap between the number of extremely low-income renter households and the number of homes renting at prices they can afford. At least 75% of the funds used for rental housing must benefit extremely low-income households. The Housing Trust Fund is a block grant to states and operates at no cost to the federal government because it is funded through fees on Fannie Mae and Freddie Mac.
- Protect and expand Low Income Housing Tax Credits (LIHTC) while advancing changes to better target assistance to the lowest-income renters. The LIHTC program encourages private investment by providing a tax credit: a dollar-for-dollar reduction in federal taxes owed on other income. This program effectively supports affordable housing development but rarely reduces rents to levels extremely low-income families can afford unless they also have a voucher or other rental assistance. In March 2017, Senators Maria Cantwell (D-WA) and Orin Hatch (R-UT) reintroduced the Affordable Housing Credit Improvement Act of 2017 to both expand LIHTC by 50% over 5 years, as well as improve the program to create new incentives for LIHTC units to be affordable to lower income households. The bill has strong bipartisan support. Additionally, key members of Congress are considering proposals for a renter’s tax credit, which could assist low-income people with paying the rent.
- Repairing and modernizing existing public housing stock. There are approximately 1.1 million public housing units, serving 2.6 million residents, with funding from residents’ rents and congressional appropriations. Additional public housing has not been built in decades, and advocacy is focused primarily on preserving the remaining public housing stock. Public housing has been chronically underfunded for decades, and the demand for public housing far exceeds supply. Lacking capital investment, the existing public housing infrastructure is crumbling and needs major repairs — there are more than $26 billion in unmet repair needs, according to a 2010 HUD study. In 2017, policymakers provided $4.4 billion for public housing operations and $1.9 billion for capital repairs—far short of the amounts needed. The Rental Assistance Demonstration that Congress first authorized in 2012 provides a new financing mechanism that will enable agencies to rehabilitate 225,000 units, but substantial additional investments will be required to preserve the remaining stock. It is estimated that more than 10,000 units of public housing go offline each year due to needed repairs.
- Protect and expand funding for Section 8 Project-Based Rental Assistance. Project-based housing is a public-private partnership to provide affordable rental housing. Project-based assistance is fixed to a private property under a rental assistance contract between HUD and the property owners. Today, over 1.2 million households live in homes with project-based rental assistance, which was funded at $10.8 billion in 2017. Over half of these households include someone who is disabled or elderly. Funding for project-based rental assistance must be renewed annually through the congressional appropriations process, and the cost of renewing assistance rises nearly every year. Because the program depends on the willing participation of private owners, timely and reliable program funding is essential — delayed or inadequate funding increases the chances that owners will exit, leading to the permanent loss of affordable housing.