Points to Consider on Affordable Housing
The Need for Affordable Housing
Nationwide, there has been an increase in both rent and single family dwellings that has significantly outpaced income growth. Much of new construction, both rental and single family, is "high end", well beyond the reach of people earning less than median income.
Nearly a third of all households send more than 30% of their income on housing, and 13% (up 52% from the year before) spend more than 50% of the income on housing. [1]
In October 2003, the national median two bedroom apartment housing wage (the income one needs to rent a 2 bedroom unit paying 30% of income for housing) was $15.21 hr/ $31,637yr. [2]
Wages have not kept pace with steadily rising housing costs. After rising somewhat at the end of the 1990s, real median earnings have fallen throughout much of 2002 and 2003. [3]
Homelessness increased about 19% nationwide. One quarter of homeless people are children. Some 2.5-3.5 million people are homeless at some point in a given year.
2 million households live in severely inadequate housing. [4]
Because land cost and construction costs are so high in many areas, new construction of affordable housing can generally only be done using various federally funded housing production programs (Low Income Housing Tax Credits, HOPE VI, Rural Housing, project based Section 8, etc.)
Federal Housing Issues
In May of 2002 the congressionally appointed Bipartisan Millennial Housing Commission issued its report, "Meeting Our Nation's Housing Challenges. [5] According to that report 37 million households, about 94 million people, pay more than 30% of their income for housing. The commission estimates that there is such a shortage of affordable housing that we need to produce 1.8 million units of housing to meet the pent up demand. Yet the few federal programs producing new housing are at risk.
The proposed National Housing Trust Fund, endorsed by over 5,000 elected officials and organizations, would use surplus FHA funds that currently go into the general treasury to fund the production and rehabilitation of 1.5 million units of housing over the next ten years. 75% of the funds would be for rental housing, with at least 45% of those targeted to housing that is affordable to extremely low income households (those below 30% of area median income). [6] In addition to developing critically needed housing, economists predict that producing this volume of housing would create more jobs in the first 2-3 years than created by the proposed tax cuts over 10 years.
Public housing, which provides 1.2 million apartments at affordable rates to elderly, disabled and lower income people, faces decreased funding in the FY2004 budget. Both the operating funds and the capital fund are cut, jeopardizing both ongoing management and repairs. Rural housing funds and the entire HOPE VI program (which revitalizes public housing) are eliminated entirely.
Section 8 vouchers help elderly, disabled and low income working families pay for housing in market rate apartments. The administration has proposed block granting this program to the states. It is unlikely that funding for this program would keep pace with rising housing costs. This would leave the states having to either cut the number of vouchers offered or cut the dollar amount of the vouchers. Important protections for low income families could be removed, such as targeting 75% of vouchers to the poorest families. States could impose time limits and remove quality standards. And people using the vouchers would be restricted to the state of origin, creating problems along most state borders and in many metropolitan areas.
Proposed tax cuts are irresponsible and dangerous. They are too large, they would not provide immediate stimulus to the economy, and they are highly inequitable. In addition to creating huge deficits, they will force budget cuts that will hurt millions of people and fundamentally restructure government. [7]
Affordable Housing Questions for Candidates
A full time worker must earn $15.21/hour to afford a modest 2 bedroom apartment. This is almost 3 times the minimum wage. In addition, much of the new job growth pays far less than this. If elected, what will you do to close the gap between housing costs and what low wage, service sector workers are currently being paid so that working class families have access to safe, affordable housing?
Housing subsidies for homeowners through the federal tax code are $120 billion a year and growing. Yet federal subsidies to help low income families who can't afford basic housing are only $30 billion a year and shrinking. If elected, would you support establishing a maximum subsidy on high end housing and plowing that saved revenue back into creating safe affordable housing for low income households?
Over 5,000 elected officials, organizations and religious leaders have called for the establishment of a National Housing Trust Fund to build or preserve 1.5 million homes for the low income families in 10 years. Will you endorse the fund and what will you do to ensure its enactment?
The proposed changes and cuts to the Section 8 Housing Voucher Program will lead to fewer people being assisted, higher rents for already stressed households, and less focus on the very poor - many of whom are elderly or disabled. If elected will you fight efforts to take housing away from those in need?
Developed by the American Friends Service Committee New Hampshire Program, July 1, 2004
For more information: www.nlihc.org
[1] Joint Center for Housing Studies of Harvard University, State of the Nation's Housing, 2004.
[2] National Low Income Housing Coalition, Out of Reach 2003
[3] Economic Policy Institute, Economic Snapshot, April 2003, available at www.einet.org
[4] Op. cit. State of the Nations Housing 2004.
[5] Millennial Housing Commission Website, www.mhc.gov
[6] National Low Income Housing Coalition, the National Housing Trust Fund Campaign, www.nhtf.org
[7] Center for Budget and Policy Priorities, Robert Greenstein, April 17, 2004 www.cbpp.org
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