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.

Attend United for Action and Help Launch a Movement

One of the best things about conferences is that they give you the opportunity to stretch a little- mentally and physically. A good conference provides new information and pushes you to think differently about the way you do your work. And instead of being tied to a desk all day, a good conference has you moving from room to room, meeting new people and gaining new perspectives. Plus, if you’re traveling from out of town, you get a chance to explore a new place or revisit favorite spots in a city you enjoy.

United for Action, the NLIHC 2013 Housing Policy Conference and Lobby Day, is just that kind of conference. We hope you’ll excuse us for boasting a bit, but we’re pretty proud of everything we do to ensure that the time you spend with us March 17-20 is enriching, exciting and worth every penny. Just take a look at this Pinterest board full of pictures, tips and resources and you’ll see the energy we invest in making our conference an essential part of your housing advocacy year.

This year, because we’re launching our Housing Tax Reform campaign in connection with the conference, we think this event has more to offer than ever. We’re taking real leadership in the fight to create the first federal housing resource in 30 years to build and preserve housing for the poorest of the poor, and we know you’ll want to be part of the movement we’re building.

Intrigued? We hope so! Check out the registration site to learn more about the conference and reserve your place. Registration rates increase on March 1, so now is the time to take action.

News Round-Up: Desperate Measures

Poor-quality housing conditions are often a fact of life for the poorest Americans. Two stories this week show the impact this reality has on families, and the different ways the story plays out in private and public housing.

On this blog, Senior Vice President for Policy and Research Linda Couch writes about family friends living in poverty and struggling for stability. Forced to leave the room they rented due to living conditions deemed unsafe by the local government, this family is hungry and nearly homeless. Linda knows all too well the conditions this family faces in the rental market, and wonders if there is a better life in their future.

Often, residents of federally assisted housing live in poor condition similar to their low income counterparts in private rental housing. As an article in the Tampa Bay Times explains, years of cuts to federal spending on public housing means public housing agencies often don’t have the funds necessary to operate and adequately maintain their housing. In response, HUD launched the Rental Assistance Demonstration, which allows housing agencies to seek out private investors to raise the capital necessary to maintain high-quality housing. Housing officials and advocates alike acknowledge the risks of private funding, but with housing need growing and budget cuts a fact of life for HUD-funded programs, many housing agencies see no other choice.

A Better America

This post is a personal reflection from Linda Couch, NLIHC’s Senior Vice President for Public Policy. 

There is a special family in my life that needs a lot of things. They have certain things, for which they are extremely grateful every day: they love each other deeply, they are usually healthy, they are optimistic. But, they are very poor and the strains of their poverty reach into every facet of their lives. If they had a safe, decent and affordable place to live, their lives would really be wonderful because so much else would have a place to, well, fall into place.

Last week, the basement apartment they were renting flooded and the city inspector plastered a bright orange, 6″ x 8″ sticker on their front door: no one can be in there or live there. On Saturday, I got a call from the mom, who is mother to my daughter’s best friend, asking if I had any boxes or plastic trash bags she could have. I went over, read the orange sticker and entered their home. The signs of flooding were obvious; the carpet in their one bedroom still wet. Some nasty vapor smell was coming from the furnace room, just a couple of feet from the bedroom. They were in the throes of moving, poor people style. Family photos, layered with tape from the walls of previous apartments dumped into the three suitcases they have, alongside the baby Tylenol and old perfume. Wet clothes from the flood mostly sorted from the dry clothes and jammed into large black garbage bags.

They are moving to another house owned by the same man. They moved into the attic room over the weekend but won’t know until later this week if they’ll have the $500 for rent. They moved anyway. They had no choice. Their room is in a different school district. The landlord will not give the mother any paperwork, no small slip of paper even, saying they live there and pay rent. Without this paperwork, the mom doesn’t know how she’ll get her older daughter into the new school. Since she’s not sure she can even afford the rent there, my husband and I are going to shuttle the daughter to and from her current school so she doesn’t have to change schools twice this year. What the mom could manage in rent is unclear. Rent money comes mostly from the baby’s father and his willingness to help out ebbs and flows. So, mom, baby and 10 year old live on the teetering edge of crisis.

The mom has no “papers.” She cannot prove she is here legally. She has worked in the past but is not working now. It’s very hard to find an under-the-table job that pays more than $5 or $6 an hour, the amount she has to make in order to pay a babysitter and still have a little left over for her family. She had been getting food assistance but that assistance is now on hold and won’t start again for a month or so. Until then, the baby’s father buys the baby cereal and milk;  the 10 year old eats breakfast and lunch at school and gets headaches on the weekends. The mom lets us help– buy groceries, drive to the laundromat so she doesn’t have to lug her laundry onto the bus– but only so much. No, she says, you do too much and I must tell you no, please let me tell you no. She taught me the word in her native language for embarrassed. She said that is what she has inside her.

I said that this family is optimistic, and they are. So much of their lives is up in the air, is unknown, that being any way but optimistic could just be too much to bear. I dare not voice it to the mom, but I am the pessimistic one. What path do they really have to housing – not to mention safe, decent and affordable housing? What will change so the mom can work, the baby can be looked after? How is it that this straight-A-student 10-year-old will not have to move twice a year until she graduates from high school? How can they get out of a world where they fear speaking up about lack of heat, lack of water, or cockroaches because the crappy landlord holds so much control over them?

There has to be a better America out there somewhere, right?

Stories like this play out in millions of families across America every day. Socially just housing policy can help make the better America these families need. Visit our website to learn what we propose, and share your ideas about what can be done in the comments. 

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.

News Round-Up: It Takes a Village

It takes a village to raise a family, and it may take assistance from multiple levels of government to ensure affordable housing is available to those who need it. As NLIHC research has shown over the years, some local communities have in place programs and resources to help make up for where the federal government has fallen short in meeting the affordable rental housing needs of the lowest income people. News from two communities shows what that investment can look like- and why it’s so important.

In Connecticut, a state with one of the highest Housing Wages in the nation, advocates and government officials have high hopes a new state Department of Housing will be able to reverse that state’s trend of housing costs that swiftly outpace what low income residents can afford.

San Francisco has by some measures the highest rental housing costs in the nation. While recent reports of a leveling-off of rents in that city may be a positive sign, it isn’t as if rent there became affordable. The creation of a new city housing trust fund last year should help increase the availability of affordable housing, but it may take more than just local resources to meet San Francisco’s tremendous housing need.

A call for examination of federal real estate programs

The following is a guest post by Alex Dodds, Online Communications Manager, Smart Growth America.

The home mortgage interest deduction turns 100 years old this year. Is it still doing the most it can for American families and taxpayers?

Smart Growth America recently examined the federal government’s involvement in the real estate market and its impact on homeowners, renters and communities across the country. The new report, Federal Involvement in Real Estate: A call for examination, surveys 50 federal real estate programs to better understand where this money goes and how it influences development in the United States. The spending examined in the report’s analysis includes tax expenditures, loan guarantees, and low-interest loans and grants – totaling $2.23 billion in federal spending over the five year study period.

This involvement has an enormous impact on the U.S. real estate market, and even a cursory analysis reveals this impact is uneven. Outdated programs and lack of coordination across agencies contribute to this imbalance, the report explains. As a result, many federal programs are not targeted to those most in need, are not targeted to strengthen existing communities and are not targeted to create more places with economic opportunities.

The mortgage interest deduction (MID) is one example of a program that deserves to be reexamined. The MID costs an average $80 billion annually and is meant to increase rates of home ownership. It can be claimed by homeowners, but only by households that itemize their taxes. The deduction is claimed significantly more by higher income households because of the required itemization.

There is no similar support for homeowners that do not itemize their taxes (often middle class households) or for renters. Compounding these challenges, the deduction may also be taken on second homes – possibly making it even tougher for families still working to afford their first.

This is just one of the many expenditures and commitments outlined in the new report as needing review. The National Low Income Housing Coalition has called for similar examination of federal real estate programs – and these two organizations aren’t the only ones.

The U.S. Government Accountability Office (GAO) recently released Tax Expenditures: Background and Evaluation Criteria, a report that looks at the efficacy of all federal tax expenditures and programs, and proposes developing a framework for evaluating them. Most tax-expenditures – including the MID – are not systematically monitored or routinely examined to determine if they are still achieving their intended purpose.

The GAO report suggests five questions to ask to gauge a tax expenditure’s value. Those questions are similar to Smart Growth America’s recommended criteria to evaluate programs by:

1. Support balanced housing choices in suburbs, cities and rural towns.
2. Reinvest in America’s existing neighborhoods and communities.
3. Provide a safety net for American families.
4. Help more Americans reach the middle class.

Congress is approaching the end of FY13, and discussion of next year’s budget will soon begin. As members on both sides of the aisle look for ways to be more effective with taxpayer dollars, now is the time to reexamine these federal programs.

Smart Growth America is asking allies and advocates to join the call for an examination of federal real estate spending. These programs could be helping communities grow stronger and families more prosperous — in addition to achieving their primary goals — but Congress will need to take action in order for that to happen.

Smart Growth America and the National Low Income Housing Coalition both want to help families find homes that are affordable and within healthy neighborhoods. The federal government’s investments in real estate development have huge implications for this work, and the work to examine these programs needs to begin now.

NLIHC welcomes guest posts from individuals and organizations with something to say about low income housing policy. Contact amy@nlihc.org if you’d like to submit a post.