Rental Housing Assistance Budget Balanced on Backs of Poorest

February 24, 2012

If you look at the President’s  Fiscal Year 2013 budget for low-income housing assistance as a whole, you’d think it’s pretty good — at least, considering the caps imposed by last fall’s debt ceiling/deficit reduction deal.

Or at least I did. But, as they say, the devil is in the details. And there are some very devilish details in the policy changes proposed to help make the numbers work.

One of them would raise monthly rents for the very poorest households that live in public housing or participate in any one of several programs the budget classifies as Tenant-Based Rental Assistance.

Current Minimum Rent Policy

Under current law, residents of public housing and people with housing vouchers generally must pay 30% of their adjusted income for rent. The same holds for residents of project-based Section 8 housing, i.e., units that have federally-funded vouchers attached to them.

The local public housing authority pays the rest, up to a cap based on the fair market rents the U.S. Department of Housing and Urban Development sets for the area.

For the very lowest-income households, however, 30% of adjusted income can be zero or pretty darn near. PHAs may, if they choose, require them to pay a minimum rent, but only up to $50 a month.

They can, but don’t have to also impose a minimum rent, up to the same maximum, on public housing residents. A $25 minimum rent is generally mandatory for residents of project-based Section 8 housing.

According to a 2010 study for HUD, 88% of PHAs have opted for a minimum rent. Not all of them, however, charge as much as $50 a month.

White House Proposal

For Fiscal Year 2013, the President proposes $4 million less to renew housing voucher contracts than Congress approved for this fiscal year.

Yet the White House fact sheet asserts that HUD’s rental assistance programs will serve as many families as they do now.

How can that be? In the past, increases have been needed just to keep up with rising rents.

Part of the answer is that PHAs would have to charge a minimum rent. And the minimum would be $75 a month, rather than the $50 that’s permissible now.

This may not seem like much, especially for households that are already paying the maximum minimum.

But to fall into the minimum rent category at the $50 rate, a household’s income, with adjustments, would have to be less than $167 a month. The new mandatory minimum would be nearly 45% of this.

Well, the fact sheet says, households would be eligible for hardship exemptions. Nothing new about these.

Under current law, PHAs must have policies for granting such exemptions. Most of the hardships their policies must include a significant loss of income, e.g., a job loss, the death of a family member.

But exemptions are also supposed to be granted if the minimum rent would result in an eviction — in other words, if the family simply couldn’t pay it.

Problem is that hardship exemptions are apparently few and far between. Of the PHAs the HUD study surveyed, 82% granted them to fewer than 1% of the households they served.

Maybe because $50 worked a hardship on only a few. Maybe because PHAs construe acceptable hardships too narrowly. Maybe, as the study suggests, because they don’t make sure that households know they can get exemptions.

Whatever the case, I see no reason to believe that PHAs will suddenly start granting more.

HUD apparently doesn’t think they will since Secretary Donovan has said that the new minimum rent requirement will save $150 million next year.

Households at Risk

The Center on Budget and Policy Priorities recently analyzed a bill already introduced in the House that would set a somewhat lower mandatory minimum rent.

It concluded that nearly 491,000 extremely low-income households would be exposed to “serious hardship and even homelessness.” The President’s proposal, it says, would affect about 15,000 more, bringing the total to well over half a million.

Nearly two-thirds of these households nationwide are families with children. As many as 40,000 include members who are elderly or have disabilities.

Seems to me the right hand doesn’t know what the left hand is doing — or maybe knows, but doesn’t care.

The President proposes a $330 million increase for homeless assistance grants to “continue progress” toward his administration’s goals for preventing and ending homelessness.

At the same time, he seeks savings in housing assistance that could well put more people on the streets — or into the already-stressed shelters and housing the homeless grants support.

NOTE: Fellow D.C. residents, I’ll have a separate post on what this proposal may mean for our HUD-funded rental assistance programs. So check back — or subscribe. You can now get my posts as e-mails just by clicking the Follow button.

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My Day at Mayor Gray’s One City Summit

February 15, 2012

Mayor Gray’s One City Summit wasn’t, as I originally thought, an opportunity for District residents to provide input for his proposed Fiscal Year 2013 budget — or at least, input that might substantially change the budget his staff is developing.

It wasn’t even a chance to set the agenda for making the District “truly ‘One City,'” though the online feedback site suggested as much.

Ideas galore were offered there. And a set developed by the Fair Budget Coalition got far more votes than the rest.

But when I looked at the topics the Summit would focus on, they were the same as before the feedback was collected.

And the very good guide for participants reminded me a lot of points and priorities laid out in the Mayor’s State of the District address. Blessedly fewer, however.

So I figured that what the Mayor really wanted was to build support for his core strategies to promote long-term job creation and local employment. That and to make us all feel he’s listening to us.

But I went to the Summit anyway to see what I could learn — and whether I could perhaps broaden the conversation to include what I view as some additional urgent priorities for low-income District residents.

We were, after all, told that the Summit “was a chance to express [our] views and make [our] voices heard.”

And it was in one sense. We were divided into small groups, each seated around a table. And we were free to say whatever we chose.

At the outset, this produced interesting results because the first substantive questions our small groups were to answer made just about anything on our minds relevant.

One of them sought our views on the greatest challenges to One City. My table mates and I agreed that affordable housing was a big one.

So apparently did many other participants because affordable housing/gentrification gained the most votes when we were all asked to choose the top three challenges from a list of those the small-table process had generated.

Maybe this will have some effect on the Mayor’s budget. That would certainly make for proposals very different from last year’s.

Perhaps the budget will also reflect some of the other broadly-shared concerns, e.g., the need for more affordable, high-quality child care slots for infants and toddlers.

And certainly the Mayor got a ringing endorsement for his plans to orient education and training toward in-demand skills in our evolving labor market.

But I personally feel that the highly-controlled structure of the Summit process filtered out ideas and concerns that didn’t fit his job creation/employment framework. Take a look at the small-group worksheets and you’ll see what I mean.

And some ideas that did fit the structure were shorn of budget impact — presumably by the team (or computer program) that compiled what the group as a whole could see and vote on.

Small groups, for example, apparently agreed that poverty was a major challenge for parents of young children. This was reflected in the reported results.

But none of the government resources and services captured by the team addressed income supports like the Temporary Assistance for Needy Families program.

My table agreed that TANF cash benefits should be increased and the five-year lifetime limit rescinded. Were we the only participants that sent a message of this sort to the team that compiled responses?

Should that have been enough to screen it out if we were?

Perhaps I’m expecting too much of a citizens engagement event like the Summit. But I can’t help feeling that the Mayor heard what he wanted to because the Summit was structured that way.

He who pays the piper calls the tune, as they say. And the payment, as you probably know, was a big one.

I think I’m in a minority here.

By and large, participants the press interviewed seemed pleased that they had a chance to speak out. Which I assume means they thought what they said would make a difference — or at any rate, hoped it would.

And the Summit certainly did, as one said, give us the benefit of coming together to “throw ideas around and lift each other up.”

Will it produce a budget that aims to lift up the struggling residents who sat around my table?

We’ll find out in a month or so.