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.