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.

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.

News Round-Up: Sequestration and the Housing Shortage

Last week, NLIHC released Housing Spotlight: America’s Affordable Housing Shortage, and How to End It. It’s a startling look into the depth of the affordable housing shortage facing extremely low income households, providing data at both the national and state levels showing the amount of housing needed is far greater than what is affordable and available to the lowest income renters.

Prior to the release of our report, HUD released a summary of its report to Congress on the worst case housing needs. As the Seattle Medium notes, the report shows 8.48 million renter households experiencing the worst case housing needs– severely unaffordable housing, substandard housing conditions or both– which represents a 43.5% increase since 2007.

The local CBS affiliate in Phoenix reports that due to the shortage of affordable rentals available to the lowest income people, three out of four of these renters will spend more than half of their incomes on housing costs.

Foster’s Daily Democrat in New Hampshire reports on the HUD worst case needs report, and notes that while rents in the state are increasing, the data shows that vacancy rates are down, adding another layer of difficulty for lower income renters.

While the data continue to show that low income renters face a severe housing shortage, the federal programs that help the poorest Americans with their housing needs are now subject to deep cuts. As the New York Times reports, sequestration, which took effect Friday, will result in hundreds of thousands of very poor households losing their housing assistance and becoming at risk of homelessness.

Home for the Holidays

If you could ask for any gift this holiday season, what would it be?

Would you want to take a trip around the world? To have that car you’ve been dreaming about since you were a kid? Or would you prefer something less tangible, like more time with the people you love?

If we could wish for any gift, the National Low Income Housing Coalition would ask for the lowest income Americans to finally have decent, affordable homes they can afford.

It’s been a difficult year for low income people. Poverty rates are high, income inequality is growing and budget negotiations have yielded little more than cuts that hurt the people who can least afford them.

We are far from seeing our wish for housing for all fulfilled, and our work has never been more urgent.  This is why, during this season of giving, we’re asking for a gift from you: a donation to the National Low Income Housing Coalition to support our work to ensure the availability of housing that will end homelessness and bring access to opportunity for families and individuals across the nation.

When you give to NLIHC, you’re giving to a unique organization that truly makes a difference in meeting the housing needs of extremely low income people. Will you put us on your gift list today?

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.

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.

News Round-Up: Sacred Cows

In housing news this week, we found encouraging signs that the conventional wisdom about housing policy might be changing, and continued concern that not enough is being done to end poverty and suffering in our nation.

CQ covers a new wrinkle in the tax debate raging in Washington: Willingness to let go of sacred cows. Both an NLIHC poll and a Pew poll indicate public support for modifying the mortgage interest deduction, and even the home builders are said to be open to a mortgage interest credit that would be helpful for first-time home buyers. NLIHC proposes converting the mortgage interest deduction into a 15% to 20% credit and capping it at interest on mortgages up to $500,000, and using the savings to fund the building and rehabilitation of affordable rental housing.

The Nation celebrated an anti-poverty Thanksgiving last week with reflections on the holiday from advocacy leaders and low income people. In her reflection, NLIHC President & CEO Sheila Crowley said, “ I will know that change has come when people are not sleeping outside on concrete in November two blocks from the White House.”

Finally, a column in Yes! Weekly explores the social cost of an economic and political system that requires minimum-wage workers to work 75 hours or more per week to be able to afford decent housing and other household expenses. The author suggests that other social ills could be the result if Americans cease to believe in the promise of the American dream.

Meet our Interns: Isabella Blanchard

The National Low Income Housing Coalition is fortunate to have great interns every semester and summer. Our fall interns have been with us for a few weeks and are excited to share their experiences at the Coalition with you. Think interning with the Coalition might be for you? You’re in luck! We’re now accepting applicants for spring 2013 internships.

My name is Isabella Blanchard and I am (quite unexpectedly) an Outreach intern. My experience with the National Low Income Housing Coalition has been whirlwind, and I’ve enjoyed every minute.

NLIHC and I crossed paths for the first time in July of this year. I was exploring the Washington Post Jobs website, desperate for something to jump out at me, and at number #106 of 1,000+ entries I found it. My parents have always instilled a sense of giving back in my siblings and me, and in a city that sometimes seems to forget that idea, NLIHC seemed the perfect fit.

Every Wednesday and Thursday I am up with the rest of the working world (I haven’t quite perfected the art of early-morning wake-ups yet, but it’s getting easier) and spend my day at the office across from the Treasury. Each day is a test of my ability to learn on the go, to work with people and to problem solve–skills that will serve me in my career no matter which path I take. It has been easy to work with the staff at NLIHC. Everyone has the same goal in mind, and President & CEO Sheila Crowley directs the group with humor and strength.

If you’re looking to intern in D.C., NLIHC will challenge you, but I have found, especially in the wake of Hurricane Sandy, that the knowledge there is an organization working on behalf of the housing needs of the lowest income Americans, and you can be part of it, is a great motivator. And there’s the added bonus of the city; buy yourself a Metro card and enjoy.

News Round-Up: No New Funding

In Massachusetts, state lawmakers and social service organizations are working to improve services available to victims of domestic violence. According to this story, incidences of domestic violence are on the rise in the U.S., with 1.03 million incidents reported in 1998, and 7 million reported in 2010. While better, more coordinated services are planned, shelter for victims of domestic violence is another issue. A shortage of shelter beds, disaster-related housing losses and having the eighth highest rental costs in the nation all make it difficult for victims of domestic violence to find new, safe places to live.

No new funding is on the horizon in Massachusetts for domestic violence shelters. But a group of nuns, calling themselves the “Nuns on the Bus,” is working to change that. They traveled across the country recently gathering support for an alternative to the proposed FY13 budget authored by Rep. Paul Ryan (R-WI). They heard stories from many Americans, including a gentleman who must choose between paying the rent and buying food for his family. The nuns support the “Faithful Budget,” which includes funding for the National Housing Trust Fund.

Talk of the Town: What our leaders need to hear.

From DC to LA, people have been talking about housing problems all week.

On Tuesday, the U.S. Census Bureau announced that in 2010, median household income declined and the nation’s poverty rate increased 14.3%. In 2010, there were 46.2 million people in poverty, making 2010’s figures the fourth consecutive increase and the largest number in the 52 years for which poverty estimates have been published. Press nationwide spotlighted these alarming figures, pointing out as USA Today did, that “a typical U.S. family got poorer during the past 10 years in the first decade-long income decline in at least a half-century.”

These reports of increased poverty were paired with other reports revealing housing prices falling nationally and foreclosures spiking in the month of August. The Washington Post and news outlets across the country reported on the drastic increases in foreclosure last month. 55% increase in California, 46% increase in Indiana, 42% in New Jersey… Augusts’ dramatic increase in foreclosure filings represents the biggest month-over-month increase since 2007.

As Dean Baker, co-director of the Center for Economic and Policy Research, said for Atlanta Journal-Constitution on Wednesday, “Housing is the story.” Unfortunately all this talk doesn’t seem to be making its way out of the field, past the press, and into the conversations of the President and Members of Congress.

The Los Angeles Times summed it up well:

More than four years after the sector’s initial collapse, housing has become the economy’s silent killer. But Obama, in unveiling his proposed $447-billion package, said little more on the issue than that he would help ‘responsible homeowners’ refinance their mortgages.

Everyone has their opinions on how our housing woes should be addressed and resolved, but we at NLIHC know one thing for sure. The National Housing Trust Fund should have been included in President Obama’s jobs plan, but the Administration failed to provide that funding which would help alleviate some of the housing and economic troubles that millions of Americans are facing. As stated in a letter to White House officials from forty-four national organizations:

Once funded, the National Housing Trust Fund will produce, rehabilitate, preserve, and operate rental housing that is affordable for households with incomes at or below 30% of the area median (extremely low income). Every $10 billion spent through the National Housing Trust Fund will create 122,000 new jobs in the construction trades and 30,000 new ongoing jobs in the operation of the rental housing.

The National Housing Trust Fund will help to end homelessness, provide jobs, and fill the gap of available affordable housing for Americans nationwide. With widespread reports highlighting the need for all of those things, we are shocked that the Administration did not grant the National Housing Trust Fund the funding to get to work. There are still other potential sources of funding for the NHTF, but the White House and Congress need to listen and respond to what people across the country are talking about.

And we want to hear from you too! Do you think the Administration should have addressed housing more in its jobs proposal? How do you think Members of Congress should respond to the distressing reports on poverty and foreclosure rates? Are you satisfied with how our nation’s housing problems are being handled by Washington?

Let us know and come back Monday where we can continue this conversation until we get some answers…