The Housing We Need

President Barack Obama released his FY14 budget request to Congress yesterday, which includes $1 billion for the National Housing Trust Fund on the mandatory side of the budget and the partial restoration of funding for some HUD programs.

As housing advocates know, the shortage of rental housing affordable to the lowest income Americans is a growing, and ongoing, problem. Our nation needs a federal housing policy that provides the path forward to ending homelessness and ensuring extremely low income people have access to the housing they need. Unfortunately, the past three budget cycles have amounted to a shifting of cuts around different HUD programs.

We cannot achieve our bold vision of ensuring that the lowest income Americans have access to decent, affordable housing if all of our energy as advocates is spent protecting existing programs from constant threat of cut. Meanwhile, 7.1 million low income families are without the affordable rental housing they need.

That is why we support funding the National Housing Trust Fund through revenue from modifications to the mortgage interest deduction. The National Housing Trust Fund is not meant to replace existing federal housing programs, like public housing and Housing Choice Vouchers, it is meant to augment them. The National Housing Trust Fund is the only federal program that would close the gap between the number of extremely low income renter households and the number of rental units affordable and available to them.

Building the housing necessary to end the rental shortage for those 7.1 million renter households may sound like a stretch, until you realize that the federal government has the resources necessary to do this- they just have to be used a smarter way. Our proposal to fund the National Housing Trust Fund uses existing housing resources, through modifications to the mortgage interest deduction, to direct revenue to the middle and lower income people who most need help with their housing costs. It’s a common sense solution to the nation’s greatest housing challenges. We hope you’ll support it.

The Prosperity of the Poor: So Hidden as to be Completely Undetectable

The New York Times Opinionator blog recently posted a fantastic take-down of the “hidden prosperity of the poor” concept: the idea that the relative low cost of consumer goods means that poverty isn’t as hard on people as it used to be. Post author Thomas B. Edsall details both the liberal argument that the hardships of poverty are a barrier to achievement of the American Dream, and the conservative argument that consumer products keep decreasing in price relative to income, rendering income inequality a non-issue. Edsall looks at the research and concludes that consumption inequality is in fact increasing right alongside income inequality, and that compared to other developed nations, the United States has both more poverty, and fewer resources devoted to poverty reduction.

Back in August 2011, NLIHC analyzed an exchange between the Heritage Foundation and the Center for American Progress regarding a report from Heritage making the case that the presence of appliances in the homes of poor households means poor people are not experiencing the kind of material deprivation anti-poverty advocates claim. The Center for American Progress countered with an assessment of the kind of income the sale of such appliances would provide a poor family, noting that based on prices quoted from eBay and Craigslist, poor families could sell their refrigerators and use the cash to buy eight days of food (where that food could be stored in the absence of a refrigerator is, of course, anyone’s guess). NLIHC noted in its analysis that “Ownership of consumer durables, the asset class most likely to be owned by poor households, is not equivalent to financial or other forms of wealth that have the potential to appreciate and can be exchanged more readily for cash to help a family in times of need.”

Asset poverty is a significant problem for both poor and middle income households, according to a report from the Corporation for Enterprise Development. The report finds that 44% of American families do not have enough saved to weather a three-month personal financial crisis, and that one in three families do not have a savings account. Liquid asset poverty disproportionately affects those living below the poverty line and people of color, but the report notes that a quarter of middle class families and over 58% of white households are liquid asset poor.

Can you find the “prosperity of the poor” in all this? We can’t. And while it’s tempting to suggest those low and middle income households experiencing liquid asset poverty should put less money into consumer durables and more money into savings, it’s not the $150 you’d save from cutting out one latte a week or the $200 you’d save by forgoing the purchase of a used XBox from Craigslist that will spare your family from liquid asset poverty. It’s being able to cut your greatest costs, like the cost of housing.

A low income family paying half or more of its income for rent simply will not have enough money left over for the basics, like food or medical care, much less to put away for an emergency. The solutions the Corporation for Enterprise Development suggests, like increasing the minimum wage and lifting asset requirements for assistance programs, are important ones. Another way to help poor families is to decrease the housing costs that are eating up what income they have. Our proposal to fund the National Housing Trust Fund through modification of the mortgage interest deduction would put money into the hands of more middle and lower income homeowners while giving communities across the country the resources they need to build and preserve affordable housing for their poorest residents. This is rental housing that would cost no more than 30% of the family’s income, leaving them more money to spare on their needs, today and in the future.

It is possible for America’s poor to truly prosper. What is required for this to occur is an investment in the policies, programs and resources that will help close the inequality gap. Only then will the American Dream be in reach of us all.

Is homelessness something we can accept?

You’d have to have a pretty cold heart not to be moved by this story: an empathetic doctor and a homeless inventor partner together to launch the homeless man’s invention, changing both their lives in the process.

The story of Mike Williams, who became homeless after a series of financial setbacks, reminds us that as much as we’d like to believe otherwise, none of us are immune from personal disaster. Even for those with great talent or success, like Mr. Williams, hardship or homelessness could be just a short run of bad luck away.

The invention in question is a six-foot by six-foot pod with a chemical toilet, a “secure, safe place for the homeless and people [who] are displaced in society.”

Providing a safe place for people to live is a laudable goal. And no doubt, Mr. Williams has the skill and ingenuity to create something truly useful to many people. But a so-called survival pod is not a solution to homelessness.

Homelessness is not a permanent aspect of our society, nor is it a logical, unavoidable side-effect of capitalism that we must all come to accept. We should not strive to make homelessness easier for people; we should strive to end it. Homelessness exists because the housing available in our communities is too expensive for low-wage workers, seniors and people with disabilities to afford, and because some people have additional personal challenges like mental illness or domestic violence that make maintaining their housing even harder.

Survival pods, like homeless shelters, are at best an interim solution. What is necessary is for the supply of housing affordable to the lowest income Americans to increase. It is not complicated, and it can be done. Our proposal is to fund this increase through a modification of the home mortgage interest deduction that will make home ownership tax benefits available to more middle and lower income home owners, while simultaneously producing savings that can be invested in the production and preservation of housing affordable to extremely low income renters.

When it was signed into law in 2008, the National Housing Trust Fund was a beacon of hope for housing and homelessness advocates. The financial crisis of that year postponed its initial funding. But the country’s financial climate- and its political climate- have changed. Our conversations with Senators and their staffs have convinced us that the mortgage interest deduction as we know it is not long for this world. We have the chance, this year, to influence this rare and welcome debate. Our hope, and our effort, is renewed.

Mr. Williams, like all the rest of us, deserves the dignity of a safe, decent, affordable place to call home. Join with us in support of housing policy that will get us there.

News Round-Up: Fighting Words

It’s time to fight for the National Housing Trust Fund.

So says the New York Times in an editorial this weekend citing the shortage of safe, decent housing affordable to the lowest income Americans as “one of America’s most vexing problems.”

Vexing is right. As National Low Income Housing Coalition analysis shows, there are only 30 units of housing affordable and available to every 100 extremely low income renters. This absolute shortage of housing has persisted and, in fact, increased over the years. The result is that these extremely low income renters are renting housing they can’t afford- the only housing available to them. And after paying for rent and utilities, 3/4 of extremely low income renter households have less than half of their income left for life’s necessities, like food, transportation and healthcare.

As dire as this situation sounds (and is), there are rays of hope when it comes to policy solutions. As the Times explains, the National Housing Trust Fund, when funded, will “create affordable housing, through rehabilitation or construction” that will end the affordable housing shortage and build on the successful efforts our nation has already made to stem the tide of homelessness.

There are two funding sources for the National Housing Trust Fund that have great potential: contributions from Fannie Mae and Freddie Mac, and the savings from reform of the mortgage interest deduction into a credit that will benefit more middle and lower income homeowners.

The basis for proposing these two funding sources is simple: the federal government makes a significant investment in making home ownership easy for people who can already afford high-quality housing. It’s time for the government to put its housing money where the need for housing is greatest.

Think this is an idea you can endorse? You can do that right here.

Ending the Shortage of Affordable Housing with Housing Tax Reform

We’ve written often about the shortage of rental housing affordable and available to the lowest income Americans. This shortage complicates our national efforts to end homelessness, and makes it harder for the growing population of chronically underemployed workers to find decent housing they can afford.

A significant part of this real and serious problem is that federal housing policy does not adequately address the housing needs of lower income families and individuals. It’s about more than just the amount of money spent on HUD and USDA housing programs; it’s about how housing policy and tax policy combine to put tax dollars where they simply aren’t needed.

The mortgage interest deduction is a part of the tax code that allows some homeowners to deduct a portion of the interest they pay on their mortgage from their taxable income. The way the deduction is structured, the more money you earn, and the larger your mortgage, the bigger the tax deduction you will receive. According to the Office of Management and Budget, the mortgage interest deduction comes at a cost to the government of over $100 billion in 2013 alone. The entire HUD budget is less than half this amount.

But the problem isn’t just that one single subsidy to homeownership is larger than every other federal housing program combine. As this article in The Atlantic Cities shows, there is a geographic disparity in federal housing policy, as well. A small number of metropolitan areas on the coasts grab the majority of the benefit of the mortgage interest deduction, while those in the rest of the country benefit disproportionately little. To quote the article,

In 1999, the average subsidy per owner-occupied housing unit in the San Francisco/San Mateo/Redwood City metropolitan area was $26,385. In McAllen/Edinburg, Texas, on the other hand, it was $1,696. This is not the amount of interest these households deducted from their income on average. It’s the full amount they were able to save on their final tax bill (or, viewed from another angle, it’s the money the federal government didn’t receive as a result of subsidizing homeownership). About a third of this total directly comes from the mortgage interest deduction.

There is plenty of justification for making changes to federal housing policy generally, and to the mortgage interest deduction specifically. But the fact is, Americans love the mortgage interest deduction. We’ve come to value it so deeply that any discussion of making changes to it results in widespread fear that the government is trying to destroy the middle class.

It’s understandable that homeowners are protective of the mortgage interest deduction. Looking at the size of the savings our average San Francisco homeowner gained on her tax bill makes clear why: that’s a lot of money, and there are many people who could use a little more cash in their pockets right now. But the National Low Income Housing Coalition believes it is possible to rebalance federal housing policy and still retain tax benefits for the middle and lower-income Americans who really need it.

We propose a modification to the mortgage interest deduction that would make it available to all homeowners regardless of the amount of their mortgage, the size of their income or whether or not they itemize on their taxes. This proposal would also make mortgage interest tax breaks more available to homeowners in the wide swath of the country that isn’t benefiting much from the deduction right now. You can use our mortgage interest tax reform calculator to see how housing tax reform would impact your tax bill.

As an organization solely concerned with the housing needs of the lowest income Americans, we’re less interested in what our proposal would do for homeowners than in what it would do for low income renters. Our proposal would save the federal government around $30 billion a year that could be directed to programs that make housing affordable to extremely low income people. By funding the National Housing Trust Fund with savings from housing tax reform, we can accomplish the housing-related goals policymakers have for mortgage interest tax breaks while also addressing the pressing issue of homelessness. We think this is a win for the middle class, lower income people, and communities at large. Over 500 organizations from across the country agree.

Affordable Housing Scarcity: How Can Communities Cope?

The research we do at NLIHC often demonstrates that the need for affordable rental housing is greatest among extremely low income (ELI) households, meaning those earning 30% or less of the area median income. The need for housing assistance far exceeds the current capacity of federal housing programs, which are only able to serve one in four families eligible for assistance. As a result, ELI households face a constant struggle to locate decent and affordable housing, and are vulnerable to housing insecurity and homelessness.

Today, new affordable housing units tend to get built using funding from three federal housing programs: Low Income Housing Tax Credits (LIHTC), HOME and the Affordable Housing Program of the Federal Home Loan Bank. Of these three programs, none are required by federal statute to target their resources towards the families that need housing the most: extremely low income households.

Who actually benefits from affordable housing programs that produce new housing units, such as LIHTC? The data are insufficient to draw conclusions, but it seems that ELI households require additional subsidies to afford the rents, and these very subsidies are in short supply. This fall, NLIHC embarked on a new, long-term project to investigate how ELI households are coping with the scarcity of affordable housing. The project examines the programs available to ELI households at both the national and state level, and the ability of ELI households to access federal and state housing assistance. The purpose of the project is to determine how housing resources can more effectively reach the lowest income households.

One component of this project is an update to Housing Assistance for Low Income Households, a Coalition report that tracks the status of state housing assistance programs. NLIHC released earlier iterations of this report in 2001 and 2008. The upcoming report, to be released in early 2013, will cover over a hundred programs across forty states and the District of Columbia that provide rental assistance. This fall, NLIHC staff reached out to administrators of state housing programs across the country, and gathered data on recent funding levels, number of households served and other key program characteristics and trends.

What have we found so far?  While the number of programs has remained stable nationwide, the budgets of many state housing assistance programs are shrinking due to tight state budgets. And, more and more programs have institutionalized stringent time restrictions and eligibility rules. As a result of these trends, fewer households are able to access assistance through state-funded programs. Meanwhile, federal programs remain many states’ sole source of ongoing rental assistance for extremely low income Americans.

In 2013, NLIHC will be expanding this research to focus on state-level development programs and city-funded housing assistance. If you’re interested in learning more about this work, contact NLIHC Research Analyst Elina Bravve at Elina@nlihc.org.

How is your community dealing with the shrinking of housing resources? Let us know in the comments.

How Fannie and Freddie Can Make Us Whole

Housing is a part of our lives that is at once so important, and yet so taken for granted that its impact on us is nearly invisible. Invisible, that is, until a health emergency, job loss or other major life tragedy results in its loss.

Home is the foundation of the lives we live and of our access to opportunity. Imagine your daily routine: you get up to the sound of your alarm clock, make coffee, shower, put on clean clothing, maybe pack a lunch, and head out the door to work. Now, imagine doing that in a homeless shelter. Or in an apartment so unsafe and run-down that the water runs brown or electrical wires peek out from behind switchplates. Or in no home at all.

Time and again we’ve laid out the facts: with only 30 rental units affordable and available for every 100 extremely low income renter households, there are simply not enough decent places to live for the working poor families, senior citizens and people with disabilities who need them.

That’s why the National Housing Trust Fund was signed into law in 2008. It was designed to provide communities with funds to build, preserve, and rehabilitate rental homes affordable for extremely and very low income households- exactly those people who need that housing most. The authorizing legislation called for the National Housing Trust Fund to be funded with a dedicated source of revenue, and the original funding source was to be proceeds from Fannie Mae and Freddie Mac. These government-sponsored enterprises were taken over by the Federal Housing Finance Administration due to the financial trouble they experienced as part of the housing crisis, and their contributions to the National Housing Trust Fund were suspended. To date, the National Housing Trust Fund has never received funding.

Four years later, the housing problems of the lowest income Americans still have not been solved, but the prospects for the housing enterprises have significantly improved. As the New York Times noted Wednesday, Fannie and Freddie returned to profitability recently and have been repaying their debt to taxpayers. The Times argues that, “[n]ow that those companies have turned the corner, the time may have come to divert some of their profits to affordable housing.”

We agree: the time has come to ensure the opportunity and promise of America are available to all people, including those with the nation’s lowest incomes. Finally closing the affordable housing gap would mean more children doing well in school, more families with disposable incomes they could spend in their communities, and better health for seniors. Certainly, Fannie Mae and Freddie Mac must pay back taxpayers for the bailout we funded. But beyond just paying us back, they could truly make us whole by investing in the National Housing Trust Fund to build and preserve the affordable housing our communities so desperately need.

Reforming a Deduction to Provide Homes for the Poor

When the National Low Income Housing Coalition first launched our proposal to fund the building and preservation of affordable housing with the savings from modification of the mortgage interest deduction, there were skeptics who told us the mortgage interest tax break was untouchable. With everything we heard about “sacred cows” and “third rails,” it would not have surprised us if we suddenly found ourselves working on a dairy farm or in a subway station.

Just a few weeks have passed, and it seems the cows have shed their halos and the rails are no longer electrified. The reality of our nation’s fiscal challenges has shocked many in Congress into realizing that what was once viewed as untouchable might indeed be a source of funding for many things, including deficit reduction.

Conventional wisdom aside, it just so happens that this is far from the first time the mortgage interest deduction has come under scrutiny. Back in 1984, even President Reagan suggested that it might be worth reconsidering the deduction. But even more relevant to our interests is a 1972 proposal from HUD Secretary George W. Romney (father of Governor Mitt Romney) for a “staged reduction” in the mortgage interest deduction, with a shift of the savings to affordable housing for low income people.

In the midst of the fear and furor over sequestration and the fiscal cliff (and the argument over whether there even is a cliff at all), it is easy to forget one simple truth: as it is, the federal programs that provide safe, affordable housing for the lowest income Americans do not have enough funding to serve all of the people who need them. Housing advocates wish we had the luxury of defending housing programs from “entitlement reform;” while entitlements like Social Security are promised to everyone who qualifies, only about 25% of people who qualify for housing assistance receive it, because the funding just isn’t there to serve everyone who needs help with housing. The result? For every 100 extremely low income renter households, there are only 30 housing units affordable and available to them. This means that 4.3 million renter households stand at the edge of their own fiscal cliff, every day of the year.

So before they go scrambling to fill in holes in the federal budget with money from sacred-cow deductions, we hope lawmakers take a step back and consider the impact investing these savings into people and communities, not just deficit holes, could have. Building and rehabilitating affordable housing means low income renters will have some disposable income to spare, and they can then spend that cash in their communities. Safe, stable housing means kids who can concentrate in school, and go on to lead productive, fulfilling lives. Healthy homes for families and seniors mean lower healthcare costs for all of us.

We think it’s time to reform the mortgage interest deduction and use the savings to fund the National Housing Trust Fund, which can build and rehabilitate housing that lower income people can afford. If you feel similarly, we hope you’ll sign on to support our proposal and help us show lawmakers that there is a better way.

Helping Women Veterans, Ending Veteran Homelessness

According to a recent report from HUD and the Department of Veterans Affairs, while homeless veterans are not likely to be women, female veterans are more likely than female non-veterans to become homeless.

Women veterans can face unique challenges when leaving the service, in addition to those challenges faced by male veterans, that can be a factor in their becoming homeless. Contributing factors to instability include being a single parent, or military sexual trauma, which is experienced by one in five female service members.

As a part of its commitment to ending veteran homelessness, the VA has special resources for women veterans. These resources address the physical and mental health needs of women veterans and their families. VA also works with HUD to provide housing to all veterans through special housing vouchers just for them.

If you or someone you love is a veteran who is homeless or at risk of homelessness, there are resources available to you. Visit the VA homelessness resources website or access to VA services 24 hours a day, seven days a week by calling the National Call Center for Homeless Veterans hotline, toll-free, at 1-877-4AID VET (1-877-424-3838).

Protecting Renters from Foreclosure- Permanently.

The housing market is sending decidedly mixed signals to Americans: On the one hand, increases in new home construction are suggesting to analysts that the housing slump might finally be over, which could mean positive economic impacts outside of the housing construction sector. On the other hand, banks are sending increasing numbers of homes into foreclosure, putting the stability of many households at further risk.

What is for certain is that foreclosure has a serious, if often hidden, impact on renter households. Approximately 40% of families affected by foreclosure rent their homes. It used to be that these tenants could be evicted from their homes with as little as a few days notice, for no fault of their own. Thanks to the Protecting Tenants at Foreclosure Act of 2009, when landlords go into foreclosure, bona fide tenants can now stay in their homes for the remainder of their lease or for at least 90 days. This legislation has prevented countless individuals and families from being uprooted from their homes and their lives.

There’s just one problem: The Protecting Tenants at Foreclosure Act is set to expire in 2014. Foreclosure is clearly an ongoing problem, and NLIHC is among the many groups that believe this law should be ongoing as well.

Happily, Representative Keith Ellison (D-MN) introduced legislation, the Permanently Protecting Tenants at Foreclosure Act (H.R. 3619) that would make the the act a permanent law. H.R. 3619 would address the ongoing impact of the foreclosure crisis on renters by removing the sunset date, ensuring that renters have a basic level of federal protections irrespective of when their residence is foreclosed on. The legislation would also add a private right of action for tenants whose rights under the act have been violated. Giving the law some “teeth” will make it even more effective, and make it easier for renters to exercise their rights.

Right now, this bill needs cosponsors. We’re inviting organizations from across the country to sign on to a letter urging representatives to cosponsor the Permanently Protecting Tenants at Foreclosure Act. You can read the letter and sign your organization on today.

The deadline to sign on is Friday, July 20, so we urge any organization that may be interested to take action quickly to support the bill. Renters in your community will thank you.