Talk of the Town: Sequestration and Housing

Sequestration is the talk of the town this week in Washington, D.C. and much of the rest of the country as we close in on the end of the first week in this new federal budget environment. The New York Times predicted early this week that people living in poverty would be hit hardest by sequestration, the ten years of automatic, across-the-board budget cuts that started March 1.

The impacts of sequestration are already starting to show, with furlough notices being issued and cuts to overtime pay already begun.

Outside of D.C., communities are scrambling to cope with upcoming cuts. In Redondo Beach, CA, city leaders fear what cuts to Section 8 vouchers will do to the lowest income people in their city. Meanwhile, the local economy is dependent on defense contractors, who could also face reductions. Unemployment in the U.S. is the lowest it’s been since December 2008, but it remains to be seen what impact sequestration will have on the steady, if slow, growth the economy has seen over the last four years.

Has sequestration begun to impact your community? How has your local housing authority planned to deal with sequestration? Are you worried sequestration will cause you or a loved one to lose housing or a job? Let us know in the comments.

Talk of the Town: A Blunt Instrument

Something very serious is about to hit the United States, and it’s not a stray meteorite from outer space. It’s got the potential to impact the life of every American, but it’s going to hit low income people hardest. And as much as everyone wants to stop it, no one seems to know how.

What’s this very serious thing? It’s sequestration.

These automatic, across-the-board cuts to federal programs were supposed to be the stick that got lawmakers to agree on a more reasonable deficit reduction plan. Instead, Members of Congress and President Obama have continued to disagree over how to avert sequestration, locking heads over whether or not to include new revenue as well as cuts in a plan to balance the budget. The New York Times notes that President Obama already agreed to $1.5 trillion in spending cuts last year, making it high time to consider new revenue as an alternative to ten years of indiscriminate budget cuts.

Those on the far right have a different opinion. The Washington Post reports that a group called Americans for Prosperity are pushing House Republicans to allow sequestration to move forward. If you are a lawmaker in favor of limited government, they say, you should support the sequester.

So what’s the potential impact on housing? Reuters reports from the Senate Appropriations hearing on sequestration Thursday that HUD Secretary Shaun Donovan warned that cuts to HUD would have a tremendous impact not just on housing, but on the financial future of the nation as a whole due to the impact of housing on the economy. Secretary Donovan called sequestration a “blunt instrument,” and said that if sequestration took place, hundreds of thousands of low income and formerly homeless people would lose their access to housing they can afford, and the Super Storm Sandy recovery effort would be threatened.

Do you think Congress can act in time to avert sequestration? What alternative to sequestration do you want your Members of Congress to support? What do you think housing advocates can do to support better alternatives? Let’s talk about it in the comments.

Talk of the Town: Passing the Buck

The National Association of State Budget Officers and the National Governors Association have a new report (PDF) out showing the strain federal spending cuts and increasing healthcare costs put on state budgets. In short, if the plan for deficit reduction was to pass the buck to the states, the message from the states is that it’s not working.

According to the report, states depend on the federal government for about a third of their budgets. Infrastructure, education and public safety programs have to compete with growing healthcare costs for a shrinking pool of federal aid.

The National Low Income Housing Coalition has chronicled the impact of shrinking federal resources on the ability of states to provide housing for their lowest income residents. We wrote earlier this week about our research into ways state and local governments can maximize scarce housing resources to serve extremely low income households.

Meanwhile, the brewing (and largely pointless) fight over the debt ceiling means that negotiations over the budget, debt and deficit will continue well into next year. Extended negotiations mean additional opportunities for spending cuts, and as one commentator says, “if you’re not willing to inflict epic levels of suffering on the very poor, there just aren’t a lot of cuts to be had.”

How are federal budget cuts impacting your state? Have you talked with your Member of Congress or her staff about what budget cuts mean for the housing situation of low income people in your state? Share your thoughts with us in the comments.

Talk of the Town: Falling Off a Cliff

“A scary new world of higher taxes, reduced spending and austerity politics.” That’s what many say is in store if Congress and President Obama cannot come to an agreement on what to do about expiring tax cuts and sequestration, aka the fiscal cliff.

The president released his plan for averting the fiscal cliff yesterday, which includes proposals for new spending that Democrats say is essential to stimulating the economy. Many Republicans in Congress, on the other hand, want to see entitlement reform and a pledge not to raise taxes on the wealthiest Americans.  Some reports, however, say that there are Republican members of Congress who want their party to be a little more flexible on taxes.

Round 1 ends in stalemate. Meanwhile, the New York Times provides us with a reality check on tax rates, showing that for all but the lowest income people, tax rates have decreased in the last 20 years.  And in The Nation, we read about the very real consequences of sequestration for people living in poverty. When you’re already standing at the edge of your own personal fiscal cliff, it doesn’t take much to push you over the edge.

What do you think of President Obama’s proposal? Do you think the president and Congress will come to agreement in time? Tell us what you think in the comments.

Talk of the Town: The Low-Wage Recovery

According to a report from the National Employment Law Project released this week, most of the jobs added during the recovery from the Great Recession have been low-wage jobs, even though the majority of those lost were middle-wage jobs.

According to the report, the fastest growing occupations between the first quarter of 2010 and the first quarter of this year were retail sales and food preparation. While the average hourly wage for retail is $10.97, and the average hourly wage for food prep is $9.04, the Housing Wage- the amount a household must earn, working full time, to afford rent and utilities on a modest 2-bedroom apartment- is $18.25. As our report, Out of Reach 2012: America’s Forgotten Housing Crisis, demonstrated, those low wages are simply not enough to cover the cost of housing without scrimping on basic necessities like food and medicine.

The New York Times story on the report also mentions the ongoing polarization of the U.S. labor market, wherein job growth happens in both highly specialized-and high-paying- technical fields, and in low-paying, low-skilled jobs like the low-wage jobs cited in the NELP study. If this trend continues, it will mean an ever-growing gap between those who can easily afford housing, and those who can barely keep a roof overhead.

How do you think we can solve the housing problems of these low-wage workers? Is there a way to put a stop to the polarization of the labor market? What have you heard the presidential candidates, or other candidates for elected office in your community, say about these issues? Let’s talk about it in the comments.

Talk of the Town: Are we rebounding yet?

Is the housing market finally recovering? A brief Google search of the term “housing market rebound” produces month after month of news articles predicting that yes, this time, it’s finally a rebound.

This week saw the release of a few data points that suggest that recovery just might be around the corner. Fannie Mae and Freddie Mac are reporting high quarterly income, as the bad loans made during the housing bubble become smaller and smaller parts of their portfolios. At the same time, late mortgage payments are at the lowest level in three years, which means a greater proportion of homeowners are keeping up with their payments.

But not everything is rosy. Mortgage delinquency is still higher than the historic average, the unemployment rate is still high, and high consumer debt and low consumer confidence make home buying unattractive or out of reach for many. And according to one analyst, while home prices have been on the rise, that increase might not have the “momentum” necessary to sustain a recovery.

Meanwhile, the slack economy and troubled housing market keep people in the rental market, which drives up rents and decreases vacancies.

So what do you think? Are we seeing the start of a real rebound? Is your community’s housing market coming back? Are you seeing an impact on lower income renters where you live? Share your thoughts in the comments.

Talk of the Town: The Long Slog

Oh, the jobs report. The first Friday of every month is a day of anticipation and anxiety as we await the release of the Department of Labors’ monthly employment situation summary. Will the unemployment rate finally drop? Will the U.S. create more jobs? Will the “long slog” towards economic recovery finally speed up a little?

No, some, seems unlikely. The July unemployment rate increased to 8.3% from 8.2% in June (which at least three newspapers referred to as just a “ticking up,” though deeper analysis reveals that a broader unemployment measure actually shows a 15% increase in total unemployment), and the number of jobs increased by 163,000.

The “jobless recovery” rears its ugly head. According to the New York Times,

the economy now produces as many goods and services — more, in fact — than it did before the downturn officially began in December 2007. But it does so with almost five million fewer jobs.

This is a lot of American workers doing the work of more than one person, and it could be a sign that employers are still too uncertain about the economy to invest in hiring more workers. Even still, the Dow Jones surged 2% after the jobs report was released, so at least Wall Street found something to like. And since it’s an election year, there’s plenty of talk about what this means for the electoral prospects of President Obama and Governor Romney.

So what’s going on? Matthew Yglesias at Slate is among those who think the Federal Reserve is not helping improve matters. While they noted earlier this week that the economy is not looking so great now, it’s not going to improve dramatically in the near future, and inflation is going to stay pretty low, the Fed isn’t going to move to loosen monetary policy (i.e., make more money and credit available in the market) right away. The European Central Bank isn’t making big moves, either.

Another frequent target of scorn is the Federal Housing Finance Agency, whose acting director decided this week not to implement debt forgiveness for underwater homeowners (NLIHC takes no position on this matter). Writing in the New York Times, Paul Krugman says that “reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone,” so some principle reduction scheme should be implemented.

What’s your take on this month’s jobs report? Do you have hope for the economy turning around? What do you think elected leaders and federal agencies should do about it? How about the private sector? Let’s talk about it the in comments.

Talk of the Town: AIDS and Housing

AIDS 2012, the international AIDS conference, finishes is week-long run in Washington, D.C. today. Held in the United States for the first time in 22 years, the conference covers the broad range of clinical and epidemiological science, healthcare, policy, and advocacy issues related to HIV/AIDS.

The conference has provided the opportunity for serious conversation and reflection on AIDS in the United States. It also puts the spotlight on Washington, D.C.’s HIV infection rate, which is higher than that of many African countries, which are so often the focus of attention on the global AIDS epidemic.

America’s capital city has many of the factors that contribute to poor health outcomes generally. The poverty rate in D.C. is higher than that of any state in the U.S. Those D.C. residents working low-wage, part-time jobs are surely among those lacking healthcare access. According to the National HIV/AIDS Strategy, lack of access to healthcare among some Americans is a contributing factor to our national AIDS epidemic.

Affordable housing is an issue as well. Stable, affordable housing improves the lives of lower income people, and is especially important for anyone with significant illness. According to the National AIDS Housing Coalition, “stable, affordable housing offers the best opportunity for persons living with HIV/AIDS to access drug therapies and treatments and supportive services that will enhance the quality of life for themselves and their families.” Unfortunately, the Washington, D.C. metropolitan area is the tenth most expensive rental housing market in the country. With a Housing Wage of $28.96, D.C. is a difficult place for anyone to find affordable housing, much less those with the lowest incomes.

Solutions exist. On Saturday, AIDS housing leaders held a pre-conference HIV & Housing Summit to address the human right to housing, the connection between housing and healthcare, housing issues of individuals exiting incarceration and more. In the United States, the Housing Opportunities for Persons with AIDS (HOPWA) program provides communities with funding to address the housing needs of people living with HIV/AIDS and their families.

Did you attend AIDS 2012? What should the U.S. do to end the HIV epidemic? What is the impact of housing on the health of people in your life? Talk about it with us in the comments.

Talk of the Town: Over the Cliff

Ground feel unsteady under your feet? It might be that you’re standing at the edge of a fiscal cliff.

According to Politico, “If Congress doesn’t take action by the end of the year, a package of tax cuts adopted during George W. Bush’s administration expire while deep spending cuts kick in. If that happens, the economy would go over a ‘fiscal cliff.’” While a steep reduction in federal spending could help shrink the budget deficit, less spending also means even less stimulus to our weak and struggling economy.

Recent reports have shown Members of Congress in heated debate over the issue, but expectations are low for any resolution occurring before the November 6 elections.

As we noted in Memo to Members recently, there is another theory: it’s not a fiscal cliff, it’s a fiscal slope. According to the Center on Budget and Policy Priorities, chances are, even if a deal is not reached by the beginning of 2013, Congress is likely to work something out eventually- meaning that consumers and businesses will have enough confidence to keep spending. Democrats have shown a willingness to test that fiscal slope theory, if it means the richest 2% of Americans would pay their fair share of taxes.

Do you believe we’re at the edge of a cliff, or a slope? What action do you think Congress needs to take? Let’s talk about it in the comments.

Talk of the Town: SCOTUS, Health Care and Homelessness

Yesterday, the Supreme Court issued its decision on the Affordable Care Act. Across the country and around the Internet, advocates weighed in on the decision.

The court ruled the law constitutional and upheld the individual mandate. In addition, the court decided that states can choose whether or not to participate in the Medicaid expansion, without penalty. The Affordable Care Act gave the federal government power to withhold all Medicaid funding from states that chose not to participate in expansion.

While many advocates reacted positively to the decision over all, some mixed opinions were expressed among housing and homelessness advocates regarding the Medicaid decision. The Medicaid expansion includes coverage for adults without children, which would allow many homeless people who were previously ineligible for the program to access affordable healthcare.

With the court ruling that states are not required to participate in the expanded portions of Medicaid, some advocates have expressed concern about the impact of the decision on homeless people. Others have cast the decision as an opportunity to advocate at the local level to ensure Medicaid expansion is accepted by all states, and that homeless people who need coverage can access it. And it’s been noted that the law itself can help prevent homelessness, by keeping people from going bankrupt and losing their housing due to illness.

What do you think about the Affordable Care Act, and the Supreme Court’s ruling? Let’s talk about it in the comments!