New Hope for Affordable Housing Production

One of the primary causes of our nation’s housing crisis is the shrinking supply of homes affordable to low-income families. Over the past decade, the supply of low-cost housing has decreased significantly even though the number of low-income renters has increased due to stagnant wages. One in three households now pays more than 30% of their income on housing and one in eight households spends more than 50%, while an additional 2.5 million families live in overly crowded or structurally inadequate housing (State of the Nation’s Housing 2005, Harvard Joint Center for Housing Studies).

In a promising new development this year, Congress may provide substantial new funding for building affordable housing for the first time in a decade. On May 25, the House Financial Services Committee passed the Federal Housing Reform Act of 2005 (H.R. 1461) to strengthen federal regulation of the two government-sponsored mortgage finance agencies, Fannie Mae and Freddie Mac. Included in the bill is a provision that would establish an Affordable Housing Fund with 5% of the after-tax profits of Fannie Mae and Freddie Mac. This could generate $400 million or more each year for the production, preservation, and rehabilitation of housing that the lowest income families can afford.  For more details, check out the National Low-Income Housing Coalition’s Affordable Housing Fund toolkit, which includes more background on the bill, housing affordability statistics for your district, and more.

A vote on the House bill is expected after the July 4th recess, and similar legislation is expected in the Senate shortly. There is strong bipartisan support for this new funding in Congress, as there was for the National Housing Trust Fund last year, but some powerful conservative forces are lining up against it. Time is short to ask your Representatives and Senators to support the Affordable Housing Fund, letting them know how great the need for affordable housing is in your community.

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House Partially Rejects President’s Cuts to Housing

On June 30^th, the House passed HR 3058, an appropriations bill providing funding for housing and community development programs for fiscal year 2006. While the bill is not all we would like it to be, the House did reject many of the President’s proposed cuts, thanks to the efforts of Good Shepherd and other affordable housing advocates. 

The President had proposed slashing the budget of the Department of Housing and Urban Development (HUD) by 11.5% by eliminating the Community Development Block Grant, making deep cuts to public housing, and cutting housing for persons with disabilities and other programs.  Instead, the House preserved the Community Development Block Grant, slightly increased funding for public housing, and maintained housing for persons with disabilities at the 2005 level.  However, while the House bill increased funding for Housing Choice Vouchers by $735 million, it fell short of the $1.1 billion increase recommended by the President and needed to restore the vouchers lost in fiscal year 2004 and 2005 (see our 2004 page on Section 8 voucher funding for more details).  The National Low-Income Housing Coalition provides a table detailing the funding levels for all HUD programs.

The Senate appropriations subcommittee and full committee responsible for funding HUD are scheduled to work on the Senate version of the appropriations bill on July 12 and 14 respectively.  It will then come for a vote before the full Senate, after which the House and Senate will work out any differences in a conference before a final vote.

HUD Proposes Harmful Changes to Section 8, Public Housing

The Bush Administration’s Department of Housing and Urban Development has drafted legislation, introduced in Congress in April as The State and Local Housing Flexibility Act of 2005 (S. 771 and H.R. 1999),  that makes sweeping changes to the ‘Section 8’ voucher program and public housing.  The National Advocacy Center and other affordable housing advocates strongly oppose this legislation because it would have the effect of shifting scarce federal housing resources away from those who need help the most. 

One particularly harmful change would dramatically alter the income targeting of ‘Section 8’ vouchers.  Today, at least 75% of vouchers are earmarked for extremely low income households below 30% of the area median income (AMI).  Considering that 84% of households severely cost burdened by housing costs have incomes below this threshold, this is a prudent policy that effectively directs assistance toward those most in need.  Instead, the Administration wants to dramatically loosen this targeting and allow 90% of vouchers to go to households with incomes of up to 60% of AMI. The bill would also allow housing authorities to impose time limits on voucher holders and charge higher rents that they may not be able to afford, among other harmful changes. These changes may allow for cost savings, but it is unacceptable to save money by making housing assistance less accessible to those who need it the most.  The National Low-Income Housing Coalition provides a more detailed summary of the bill.

Fortunately, the bill has gotten little traction in either the House or the Senate.  When testifying before the House Financial Services Committee, HUD Secretary Alphonso Jackson came under particularly harsh questioning by committee members who shared advocates’ concerns that the State and Local Housing Flexibility Act would reduce undermine the Section 8 program and reduce assistance to low-income families.  Advocates do not expect any further action on the bill this year, but remain watchful for other Administration proposals to alter housing assistance.

HUD Makes Unilateral Changes to Public Housing Funding