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.

What does sequestration mean for housing?

As housing advocates know, the impacts of sequestration will be felt most deeply by America’s poorest individuals and families. But how big will the cuts be? How will HUD and other agencies handle them? What can advocates like us do to ask Congress to replace sequestration with a more balanced approach to the budget?

NLIHC just created two pages on its website with all the information you need to help you understand sequestration from a housing perspective.

First, we’ve compiled a page on sequestration with links to all the necessary HUD, Obama administration, and Office of Management and Budget information. We also include links to resources from other organizations, like the Center on Budget and Policy Priorities. We’ll update this page regularly as agencies post new guidance and other information on sequestration becomes available.

Second, the Campaign for Housing and Community Development Funding, a coalition of over 70 national organizations staffed by NLIHC, has its own sequestration resources specially created for housing and community development advocates. On our CHCDF sequestration page, you’ll find talking points, a Twitter campaign, and in-depth information about the housing impacts of sequestration.

Sequestration was never supposed to happen; it was a “stick” Members of Congress adopted as a way to force themselves to negotiate a budget deal. The stick didn’t work, and now we’re living with the consequences. It will be crucial for all of us to advocate this month– beginning today– for the damaging impacts of sequestration to be minimal and short-lived. Take a look at our sequestration resources, join our National Call-In Day today, and encourage your colleagues and friends to join you in this fight for a more balanced approach to the federal budget.

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.

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.

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.

News Round-Up: Strapped for Cash

Farmworkers are essential to maintaining a functioning economy in areas where agriculture is an important industry. But often, agricultural workers’ wages are so low that they are unable to afford housing in their communities. This report from Ventura County, California shows the impact of low wages and high rents on farmworker families, like extreme overcrowding and impacts on the ability of children to learn.

Farmworker housing advocates in Ventura are raising money to support the development of more housing affordable to agricultural workers and their families. But according to NLIHC President and CEO Sheila Crowley in an interview (subscription required), relying exclusively on local funding for housing results in an inequitable situation.

“There are some local communities which are very wealthy that have an economic base that would allow them to be able to come up with these kinds of programs and pay for them,” Crowley said. “But by and large, local governments are really strapped for cash, and they have enormous obligations, in particular education. So the notion that there will be extra money floating around to do these kinds of things seems highly unlikely.”

While many cities and service providers feel federal block grants, like HOME and CDBG, provide necessary funding for local projects, some in the House of Representatives attempted to limit or eliminate those programs, favoring the exclusive use of local funds.

News Round-Up: Desperate Times, Inadequate Measures

Evidence has been mounting for decades that there exists in the United States an extreme shortage of rental housing affordable to the lowest income Americans. What those with influence choose to do about this situation is another matter.

The Los Angeles Times and the Huffington Post reported last week that a Los Angeles landlord took advantage of that city’s demand for low-cost rental housing by subdividing a triplex into 44 separate apartments. While housing this substandard is illegal, and criminal charges have been filed, as Huffington Post notes it is no surprise that demand exist for this kind of living situation, when the national Housing Wage is $18.25.

Presumably, those Los Angeles renters must now move to new apartments. As reported by Affordable Housing Finance and in Memo to Members, a recent study from the Brookings Institution and First Focus shows that switching schools due to a move is detrimental to a child’s education, as well as to her physical and mental health. The report recommends funding the National Housing Trust Fund, as well as increasing funding for HUD’s voucher, public housing, and project-based rental assistance programs.

How will Congressional appropriators address this issue? The House passed its FY13 budget for HUD on Friday with inadequate funding for key programs serving low income people. According to Coalition president Sheila Crowley, in spite of the efforts of a few Representatives to introduce helpful amendments to the bill,

“The U.S. House of Representatives broke faith with many thousands of the poorest, most vulnerable Americans who are served by the programs of the Department of Housing and Urban Development. Housing assistance is not an abstraction. Real people, the majority of whom are elderly or disabled, will lose their homes if these cuts are enacted. And turning the clock back on fair housing shows that the House is out-of-step with 21st century American values.”

It might be some time before the FY13 budget is decided; the Senate has yet to weigh in with its own appropriations bills.

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With all the talk about the work Congress is doing to decide on next year’s appropriations for HUD and rural housing, it’s easy to forget that there is another big budget issue looming: sequestration.

As we wrote in Memo to Members in January,

The Budget Control Act of 2011 required Congress to form a bipartisan committee to develop a plan to reduce the federal deficit by $1.2 trillion over a ten-year period. The act specifies that if a bipartisan Joint Select Committee on Deficit Reduction (the Super Committee) fails to produce a plan, the $1.2 trillion will be sequestered from discretionary spending. Sequestration would make across-the-board cuts to discretionary programs to reach the $1.2 trillion goal. The committee did not reach agreement by the statutory deadline of November 2011, triggering sequestration for FY13.

The defense community and their supporters are voicing their concerns about the impact of sequester on national security. Members of both parties and in both houses of Congress seem concerned about the effects of sequestration, and steps have been taken to ask the White House to provide details of how it would carry out the across-the-board cuts.

For our part, affordable housing advocates have been sounding the alarm from the beginning. An 8.4% cut to core government functions like education and job training, public safety and law enforcement, public health, and housing and social services would be devastating to every community in the United States.

Fortunately, there is a way to take action. Every local, state, and national organization in the country that cares about funding for any of these core government functions is urged to sign onto this letter urging Congress to avoid the planned sequester and take a balanced approach to deficit reduction that does not include additional cuts to these programs. The letter argues that nondefense discretionary programs have already contributed their share to deficit reduction and the sequester must be nullified.

Want to sign your organization’s name to this letter? It’s easy. Just visit this website and add your name. But act quickly: Signatures must be received by close of business Friday, June 29.

It’s No Time to Cut Housing

An editorial in today’s New York Times chides lawmakers for considering cuts to HUD programs and asks Congress to “shor[e] up the precious few federal programs that provide affordable housing for the poor, the elderly and the disabled” in this time of record homelessness and continuing economic instability.

The Times outlines the challenges facing public housing and other HUD programs: a $25 billion backlog in repair that has been building since the 1990s; the House funding proposal for HUD which would make deep cuts to vouchers and other programs; and the funding bill debated by the Senate last week which would make even deeper cuts to programs serving extremely low income households.

Cuts to Tenant Based Rental Assistance (vouchers) and Project Based Rental Assistance are of particular concern. As we reported in Memo to Members, the Senate bill “would not provide sufficient funding to renew all vouchers in use in the Tenant Based Rental Assistance program,” and “would also cut TBRA Administrative Fee to $1.4 billion, which is $250 million lower than the President’s request. The National Association of Housing and Redevelopment Officials reports cuts in Administrative Fees will force PHAs to reduce staff, which could result in slower voucher processing, decreasing the number of vouchers in use and, ultimately, a loss of vouchers.”

Project Based Rental Assistance would fare no better, with insufficient funding provided by the Senate bill. A too-low level of funding means “HUD would either have to fund some contracts and not others, or would have to provide short-term contracts instead of full-year contracts. Providing short-term contracts diminishes participating property owners’ confidence in the program and encourages contract opt-outs.”

Cuts to HUD programs of the magnitude proposed would have a devastating impact on the most vulnerable individuals and families in our community. In the long term, continued cuts of this nature would cripple the decades of investment our nation has made in ensuring our lowest income neighbors have access to safe, decent, affordable housing. We must let our Members of Congress know that this is no time to abandon those in the greatest need.

Talk of the Town: the Super Committee.

Everyone’s talking about the Super Committee.

According to news reports, discussion by the 12-member Joint Select Committee on Deficit Reduction has naturally included talk of reshaping the nation’s tax code, modifying entitlement programs, the future of America’s military footprint in the Middle East, and other topics.

Speculation continues about the content of these private meetings, and as Huffington Post notes, the value of these discussions may be up for debate:

Just how much the supercommittee’s deliberations matter, however, remains in doubt. The driving motivation behind the committee is a series of “automatic, across-the-board cuts” that will go into effect if the panel deadlocks… Those cuts don’t begin to take effect until 2013, meaning that Congress will have more than a year — a time span that includes a lame duck Congress — to reverse itself.

Some have also asked what would happen if the super committee fails.

We want to hear what conversations you’ve been having on the Super Committee.

Will they be able to not only agree upon a proposal, but also get it passed by Congress? If the automatic, across-the-board cuts are indeed triggered and we face $294 billion in cuts to nondefense discretionary programs, what do you expect the impact will be on housing? What influence, if any, do you believe election-year politics have on the debate? Share your thoughts with us in the comments.