What’s In the President’s Budget for Affordable Housing?

May 11, 2009

A couple of months ago, I noted that affordable housing wasn’t on President Obama’s reform agenda. His just-released budget for the Department of Housing and Urban Development confirms this in dollars and cents.

True, the budget proposes $1 billion to put the Housing Trust Fund in business. This first-time infusion of funds would help finance the development, rehabilitation and preservation of affordable housing for low-income families.

Proponents have estimated that the proposed appropriation would support the construction of about 10,000 units or the rehabilitation of a somewhat larger number. The initial goal of the Trust Fund was 1.5 million units over 10 years.

The HOME Investment Partnerships Program also supports activities that increase the stock of affordable housing. It provides grants to state and local governments that they can use to help fund the purchase, construction or rehabilitation of affordable housing and/or direct rental assistance.

The proposed HOME appropriation for Fiscal Year 2010 is $1.8 billion. This apparently would allow HUD to spend an estimated $684,000 more than in the current fiscal year.

The HUD budget says that the FY 2010 funding for HOME “is estimated to result over time in the production of almost 78,000 units of affordable housing,” plus an expected 17,000 plus units made affordable by tenant-based rental assistance.

If you crunch the numbers, it’s pretty clear that most of the funding for these units would have to come from other sources. And, of course, “over time” implies that the units won’t be available next year or maybe even the year after. No guarantee that any will be affordable for the neediest families.

So let’s look at programs that could deliver immediate relief to low-income people. The biggest is Housing Choice. This is the program that funds tenant-based vouchers–the kind that enables low-income individuals and families to rent apartments at market rates.

For FY 2010, the administration proposes $17.8 billion for Housing Choice. This, it says, will support all the vouchers effective as of the end of FY 2009. Apparently no funding here for more tenant-based vouchers in FY 2010.

Steady state is also the word for project-based rental assistance–contracts between HUD and private owners to provide affordable housing for low-income families. The proposed FY 2010 would cover the renewal of all existing contracts. Period.

There are two big reasons why more rental assistance is needed.

  • Large numbers of households are paying far more for rent than they can afford. As I recently wrote, figures from the National Low Income Housing Coalition show that this was a major problem even before the economy went into a free fall.
  • Many more households need–or will soon need–housing assistance. A jobs update from the Economic Policy Institute presents a dire picture of the unemployment situation. EPI doesn’t foresee a return to the pre-recession level any time soon. And look at the prospects for unemployed people who do find jobs. Even before the recession began, only 45% of those who’d been in their previous jobs for at least three years were earning as much as they did before.

“Over time” investments in affordable housing development will make a difference–even, I suppose, a modest $1 billion or so from the fed. But low-income households that have been paying 80% or more for rent can’t wait. Households that have plunged into the low (or no)-income category can’t wait.

HUD’s summary says that the FY 2010 budget “will restore federal leadership on promoting affordable rental housing.” I say, show me the money.


What’s In the Proposed DC Budget

April 6, 2009

DC Fiscal Policy Institute has once again stepped up to make the DC budget transparent. At last, we can find out exactly what the Mayor proposes to spend next year and how he plans to pay for it.

The just-posted DCFPI budget toolkit includes a summary of the entire proposed Fiscal Year 2010 budget, plus more detailed analyses for a range of key issues that affect homeless and other low-income District residents. And that’s only part of it. There are also links to key budget documents, backgrounders on the budget gap, a spreadsheet that tracks funding for major budget areas since 2004 and more.

As my recent rant suggests, I’ve looked forward to the toolkit to shed light on prospects for critical safety net programs. I know other advocates have too. But the toolkit isn’t just for those who advocate on a regular basis. It’s for all D.C. residents who care how our tax dollars are spent–and what those taxes may be.

So check out the toolkit. Then think about weighing in as the City Council shapes the final budget. DCFPI provides a timeline, hearing schedule and tips from other groups to help you do this.

For a quick and easy way to get involved, you can join the So Others Might Eat Advocacy Network. You’ll receive alerts at key moments in the decision-making process and suggested messages you can send with just a few keystrokes and a mouse click.


DC Council Committee Questions TANF Budget Proposal

April 2, 2009

Bread for the City has an interesting blog posting on the recent City Council Human Services Committee hearing on the proposed Fiscal Year 2010 budget for the Temporary Assistance for Needy Families (TANF) program.

As the Bread posting indicates, Councilmember Wells expressed concern that the Fenty administration isn’t proposing an increase in TANF cash assistance benefits. The current maximum benefit for a family of three is just $428 per month–the same as it was two years ago. Wells seems to think it’s time for an increase, since the Council “proposed … to hold off on,” i.e., eliminated, the increase it approved for this fiscal year.

However, Clarence Carter, the Director of the Department of Human Services, says that his agency prefers to focus on “growing [families'] capacity beyond their need”–in other words, job-related training, plus “connections” to other “goods and services.”

Wells doesn’t think this is a substitute for an increase, especially now, when jobs are so scarce. So perhaps there’s hope for struggling TANF families.

The Fair Budget Coalition has recommended a $2.7 million increase for the TANF program. This would fund a very modest (Carter calls it “meager”) increase in cash benefits–an average of $19 per month for a family of three. Both Wells and the FBC members who testified referred to it as a “cost of living increase.”

And I guess it is in a sense. The cost of living has gone up and so would the benefit. But let’s be clear about one thing. The recommended increase wouldn’t give TANF participants as much purchasing power as they had last year.

Look at the cost of living adjustment for Social Security benefits. This COLA reflects the past year’s average quarterly increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers–the same index that a number of states use to adjust their minimum wage rates for inflation. For calendar year 2009, which spans part of the District’s Fiscal Year 2010, the COLA is 5.8%.

If the FBC recommendation is adopted, the TANF benefit for the family of three will increase, on average, by 4.3%. So the family would still lose purchasing power, though less than under the Mayor’s proposal.

To understand what’s at stake here, we need to consider that, even with the increase, a family of three that depends solely on TANF for cash income will be at just 35.5% of the federal poverty level. And that is very poor indeed.

In fact, figures in the FBC FY 2010 budget report indicate that the extra $19 would give the family about 10.5% of what it needs for the basic costs of living in D.C.

Growing capacity is a fine thing. But how can a person focus on developing job-related capacities and/or looking for a job when so much time and energy must be spent on the challenges of day-to-day survival. I’d like to see Mr. Carter try it.


DC Coalition Reacts to Mayor’s Proposed Budget

March 26, 2009

The Coalition for Community Investment has come out in cautious support of D.C. Mayor Fenty’s proposed Fiscal Year 2010 budget.

CCI praises the Mayor for following its general principles for budget decision-making, saying that his budget:

  • Shows a commitment to protecting critical investments needed “at this time to ensure the stability and safety of city residents and neighborhoods.”
  • “Makes a strong effort to avoid cuts in service wherever possible.”
  • Reflects an effort to raise revenues, rather than trying to balance the budget by funding cuts alone.

At the same time, CCI notes that the proposed reduction in District-funded staff positions is “quite large” and says that a more detailed analysis will be needed to determine the potential impact on services.

In other words, we simply don’t know at this point whether the District can, as the Mayor has testified, continue moving forward on the delivery of critical services when about 1,300 positions are due to be cut.

CCI also expresses concerns about the Mayor’s proposal to eliminate the cost-of-living increases in three personal income tax provisions, saying that these “would disproportionately affect low- and middle-income residents.” It would like to see alternative revenue raisers that have less impact on those who are least able to afford them.

What these might be it doesn’t say. But, as I wrote awhile ago, it offered the Mayor and City Council numerous specific suggestions.

CCI says it looks forward to learning how the proposed budget “will help stimulate job growth, strengthen local businesses and support neighborhoods and families during the economic downturn.”

So do I. And, frankly, I’m not at all certain that the proposed budget represents the best that can be done to meet the urgent needs of the District’s growing low-income population. I suspect many CCI members aren’t either.

Let’s hope that the City Council asks lots of good questions at the upcoming budget hearings.


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