DC Coalition Urges Major Investments in Affordable Housing

March 20, 2017

While I’m on an affordable housing tangent, I’ll turn to what’s going on in my own community, the District of Columbia.

We’re in the fairly early stages of the annual budget season. And advocates have already begun pressing their cases — for more affordable housing funds, among others.

The Fair Budget Coalition has released its annual recommendations — a far-reaching set, both in scope and total cost. Not a mere wish list, however, since we’ve reasons to expect funding increases for some of the priorities, even if not as hefty as FBC calls for.

Nine of the recommendations address what the report terms “housing security,” i.e., safe, affordable housing for both families with children and people without. These recommendations represent at least 53% of the total new spending FBC advocates.*

Surely everyone who lives in the District or attends to what goes on here outside the White House and the Capitol buildings knows that the shortage of housing the lowest-income residents can afford is a huge problem — hence also the homeless problem.

The recommendations go at the linked problems in several different, though in some cases related ways.

Housing Security in the FBC Report

Housing Production Trust Fund. This is the District’s single largest source of financial support for projects to develop and preserve affordable housing. Funds available for the upcoming fiscal year will be half again as high — $150 million — as what the Mayor has consistently committed to and the Council approved, if FBC and allies prevail.

The new figure reflects the DC Fiscal Policy Institute’s 10-year estimate of the cost of meeting the District’s affordable housing needs and what seems realistic for the administering agency to actually commit within the upcoming year.

The recommendation wouldn’t necessarily mean $50 million more in the budget itself because the Trust Fund, by law receives a small fraction of taxes the District collects when it records deeds to real property and transfers to new owners.

The larger policy issue here is that the Trust Fund hasn’t done what it’s supposed to for the lowest-income households, i.e., those with incomes below 30% of the median for the area. The law requires that it commit 40% of its resources to housing for them.

Last year, only 15% of funds awarded helped finance new rental housing affordable for this officially lowest-income group, DCFPI’s housing policy expert recently testified. FBC wants the required percent raised by 10% and a mandated plan for meeting the full need.

Permanent Supportive Housing. FBC recommends $18 million for permanent supportive housing, That, it says, would provide 535 units for single individuals and 317 families.

The former, by definition, have been homeless for a long time or recurrently and have at least one disability. The latter have at least one member who meets this definition. The “supportive” part of the term refers to individualized services residents are offered, but not required to accept.

So the budget would have to include additional funding for these services. Don’t suppose I need to say why the District can’t expect the federal government to provide more.

Housing Vouchers. These now come in two different flavors — those funded by the Local Rent Supplement Program, i.e., indefinite-term vouchers like the federal Housing Choice vouchers, and the almost-new Targeted Affordable Housing vouchers, first proposed in the DC Interagency Council on Homelessness.

The TAH vouchers subsidize rents for individuals and families that no longer need the ongoing, intensive services they’ve received while in PSH, but will probably become homeless again if they have to rent at market rates.

They’re also designed for individuals and families who’ve reached the end of their short-term rapid re-housing subsidies and like the prospective PSH graduates will probably return to shelters — or the streets — if left to fend for themselves.

FBC recommends 425 subsidized TAH units for singles and 513 for families. It also calls for enough LRSP funding to house an estimated 466 families on the DC Housing Authority’s enormously long — and still closed — waiting list.

These vouchers will all be the tenant-based kind, i.e., those the fortunate families could use to rent on the open market from any landlord that would accept them.

We’ve reasons to expect that the voucher increases, whatever the kind will be more than offset by losses due to insufficient Housing Choice funding — about 1,300, if Congress passes the nick Trump’s budget takes.

Rapid Re-housing. Rounding out subsidies of the voucher sort, FBC recommends enough funding to accommodate 343 single individuals in the rapid re-housing program.

No more for families, which may tell us something — at the very least, doubts about how successful the vouchers are at truly ending homelessness for all but those temporarily down on their luck.

Public Housing. Funding to repair public housing units is the single biggest ticket item on the FBC housing security list — $25 million to eliminate such safety and health hazards as leaking indoor pipes, broken windows and doors, holes that rats and roaches crawl through.

This wouldn’t make all public housing units fully habitable. DCHA estimated its capital needs at $1.3 billion last year, noting ongoing shortfalls in federal funding for them. Yet another prospective cut that the District may have to deal with at best it can.

Bottom Line

FBC’s housing security recommendations total $118.9 million — not counting, as we probably should some portion of the Trust Fund investment.

In one respect, this is what we’re told good bargainers do — put on the table more than you think the folks on the other side will agree to.

But more importantly, it’s yet another sign that the Mayor and DC Council should revise policies that unduly limit what the District can spend.

The Chief Financial Officer’s latest revenue forecast estimates about $221 million more than the the current budget requires — and further increases over the next four years.

Under current policy, the forecast will automatically trigger all the tax cuts that haven’t already reduced what the District can spend.

Next year’s budget would then have only 57% of what it could without the cuts — $103 million less for a host of critical needs. Even less in future years, as DCFPI’s analysis shows.

At the same time, the District continues to sweep all budgeted funds unspent at the end of each fiscal year into what are essentially savings accounts. It’s now got about $2.4 billion parked, probably earning at a miniscule interest rate.

It could well end the fiscal year with more unspent funds again. We’ve had surpluses every year since 2010, when the Council decided to save every penny of them.

They can’t be used for budget items that require ongoing funding commitments, but any one-time expense is okay. A transfer to the Trust Fund would qualify.

So, as the current campaign slogan says, the Mayor and Council should untie DC’s hands — or more precisely, their own. At the same time, with prospects of budgetary tornadoes, rather than rainy days, setting some money aside in a reserve they can readily tap would be prudent.

* In some cases other than housing, FBC recommends a range, rather than single dollar figure. And, as noted above, the Trust Fund recommendation would not involve total spending through the budget. The percent I’ve cited is the lowest.


Policy Changes Could Shrink the Affordable Housing Gap, But Trump Budget Likely to Worsen It

March 15, 2017

Picking up where I left off on the acute shortage of housing for the lowest-income renters. As I said, we’ve got policy remedies, but also threats. Those seem more imminent since the Washington Post reported a leaked preview of Trump’s proposed budget.

A Range of Policy Remedies

More Financing for Affordable Housing. The National Low Income Housing, as you might expect, focuses on the housing, rather than the income side of the equation. Within this broad spectrum, it’s zeroed in, though not exclusively on building the National Housing Trust Fund.

First, it calls for legislative changes that would significantly increase revenues that Fannie Mae and Freddie Mac could transfer to the Fund, which at long last got some money last year — a down payment, of sorts, on its promise.

Second, NLICH would have the mortgage interest deduction cut in half, to $500,000 and the additional tax revenues shifted into the Fund.

These two measures — if swiftly enacted and gradually phased in — would generate an estimated $21.3 billion over the first 10 years, NLIHC says, using in part a study by the Tax Policy Center. Millions more then to states and the District of Columbia.

They can use their Trust Fund shares to help finance a range of activities that preserve, create, upgrade and otherwise make available more affordable housing.

All but 10% must go to rental housing and at least 75% of that for the benefit of extremely low income households, i.e., those with incomes no more than 30% of the median for the area they live in.

More Opportunity to Increase Housing Assistance. Even with a beefed-up Trust Fund, we’d still need more funding for Housing Choice vouchers — both project-based, i.e., those that subsidize rents for specific units, and tenant-based, i.e., those that enable recipients to rent at market-based rates, while still paying only 30% of their income.

Funding for these vouchers got whacked by the 2013 across-the-board cuts. The annual caps on appropriations now leave a lot of discretion to the top-level decision-makers in Congress — and even to majorities in the subcommittees.

The caps have nevertheless surely played a role in severely limiting the reach of not only Housing Choice vouchers, but available public housing units and those funded by several programs that are smaller and more specifically targeted, e.g., for the elderly, for people with disabilities.

The Campaign for Housing and Community Development — a substantial, broad-based coalition — has just called on Congress to lift the originally-mandated caps, which will otherwise again become effective for the next fiscal year’s budget.

Very importantly, it calls for parity, unlike the lopsided defense increase/non-defense decrease we’re likely to see in Trump’s proposed budget, of which more below.

New Renters Credit. The Center on Budget and Policy Priorities has floated a proposal that would get around the caps — a renters credit. Not, you note, technically federal spending, because spending through the tax code doesn’t count.

The credit would work somewhat like the Low Income Housing Tax Credit in that states would get a certain number of the credits and then parcel them out to expand housing affordable for low-income people.

The new credit could go to both developers and owners and would subsidize rents like the Housing Choice vouchers, limiting what tenants pay to 30% of their income.

The difference here is that the developers and/or owners would get the difference as a tax reduction, rather than a direct payment from a public housing authority. And the big difference from the LIHT is that it would make units available for only the lowest-income households.

Like the NILHC mortgage tax interest reduction, the renters credit would shift the balance in current federal policies from housing assistance for high-income homeowners to the lowest-income renters and prospective renters.

The mortgage interest deduction, the related property tax deduction and some other tax preferences recently saved the highest-income households a total of more than $130 billion, according to the Center’s estimates.

All rental assistance was somewhere around $55 billion — less than the mortgage interest deduction alone.

Threats on the Horizon

We don’t know yet exactly what Trump will propose for next fiscal year’s budget, but he’s said it will increase defense spending by $54 billion. Not, however, so as to increase the deficit. He seems intent on doing that in other ways.

His forthcoming budget will offset the significant breach in the defense spending cap by reducing spending for non-defense programs that depend on annual appropriations. How he’ll apportion the cuts remains to be seen.

But the Washington Post reports that “preliminary budget documents,” probably the marks that the Office of Management of Budget passes down to federal agencies, call for more than $6 billion in cuts to Housing and Urban Development programs — roughly 14% of the insufficient amount they get now.

The work-in-progress budget would level-fund rental assistance programs, the Post says. This would not preserve the number of vouchers in current use because they cost more annually to plug gaps between what renters pay and landlords’ permissible rental charges, which HUD bases on the costs of  modest units on the open market.

Both the Center and NLIHC say that about 200,000 vouchers would effectively vanish, leaving more low-income renters with the huge cost burdens many already bear — or homeless.

Public housing would take big hits. The capital fund would lose about $1.3 billion or more than 31%* — this when public housing has major repair/rehabilitation needs that now total nearly $40 billion, NLIHC says.

The cut, on top of years of under-funding would mean the loss of even more public housing units — more than half of which provide affordable units, presumably with accommodations hard to find on the open market, for seniors and younger people with disabilities.

The budget document also cuts funding for operating public housing by $600 million. This funding stream subsidizes not only administrative activities like overseeing buildings and renting vacating units, but routine maintenance. Neglect that and you’ve got a capital need, as all of us housed people know

The prospective budget would also blow away a flexible block grant that densely-populated communities can use to provide affordable housing and cuts two others, including one helps fund improvements in rundown subsidized housing and surrounding neighborhoods.

A fourth — the Native American Housing Block Grant—would be cut by more than 20%, leaving housing on some reservations severely over-crowded and without such basics as hot and cold running water and/or toilets.

In not-so-short, billions more for defense, billions less for poor and near-poor people who urgently need affordable housing — like, for example, what the First Lady’s living in, rent-free.

* The Center, which links to the Post report, says the capital fund cut is about $2 billion.


What Would DC Lose Under The House Budget Bill?

February 26, 2011

I’ve been trying to get my mind around what the spending cuts passed by the U.S. House of Representatives would mean for the District of Columbia.

Still working on it. There are, after all, a great many cuts and many different formulas for distributing such funds as remain.

Fortunately, the Center on Budget and Policy Priorities has come to the rescue with big parts of the answer — a state-by-state breakout of the major cuts in five broad categories.

It’s an heroic effort, but not exhaustive. Missing, for example, are breakouts of the $747.2 million cut to WIC (the Special Supplemental Nutrition Program for Women, Infants and Children)* and cuts to several other health-related programs.

One of these would totally wipe out long-standing federal funding for family planning and related preventive health care. Another would cut funding for community health centers by $1 billion — about a third of their total federal funding, says Joan McCarter, Senior Policy Editor at Daily Kos.

The CBPP figures reflect the continuing resolution as it was introduced. The version of House passed included numerous amendments. But so far as I know, only one of them affected the cuts CBPP calculated. I’ll post an update if I learn I’m wrong about this.

So, with caveats, here are some of the top-line figures for programs that are especially important to low-income District residents.

Education

The District would lose a total of $8.6 million in grants for K-12 education programs. (I’m assuming here that the funds the House restored for special education would be offset by the larger funding cut approved for school improvements.)

About 44,000 local college students would see their Pell grants reduced or altogether eliminated. The maximum grant they could receive would be $845 less than it is now. Because all grants are based on the maximum, the cut would affect all recipients.

Vocational and adult education programs would be cut by a total of $190,000.

Workforce Development

The job training and related services funded under the Workforce Investment Act would take a much bigger hit than the vocational and adult ed. programs — bigger even than CBPP originally reported.

WIA programs operate on a fiscal year that begins on July 1 — three months before new federal appropriations become effective. So they customarily get advance funding to carry them through. The continuing resolution doesn’t provide any.

So according to CBPP’s recalculation, the District would stand to lose $8.2 million for its WIA Fiscal Year 2011 program year. An estimated 20,900 adults now eligible would lose opportunities for skills assessments, training, job search help and the like, as would about 450 youth.

Affordable Housing

The District’s capital fund grant for public housing would be cut by $9.2 million. This is the grant that helps cover the costs of upgrading and repairing public housing units.

An additional $900,000 would be lost for affordable housing development and rental assistance funded under the HOME Investment Partnerships program.

Community Development

The District would also lose $12.4 million of the funds it receives from the Community Development Block Grant. That’s about 63% of what it received in Fiscal Year 2010.

The block grant can be used for a broad range of activities, including affordable housing development, neighborhood revitalization, improvements to public facilities like neighborhood centers and assistance to businesses for economic development activities that will benefit principally low and moderate-income people.

Mental Health and Substance Abuse

Two other block grants provide the District with funding for mental health services and for substance abuse prevention and treatment. Both would be cut, leaving the District with $471,000 less.

And, once again, the District would be banned from using its own funds for needle exchanges to help control the spread of HIV/AIDS.

Funding Exclusively for the District

CBPP understandably doesn’t cover the impending cut to funding the District receives because it’s the nation’s capital — and a unique state-city hybrid created and still controlled by Congress.

Under the continuing resolution, federal payments to the District would reportedly be cut by more than $80 million. Our Metro system would lose an additional $150 million.

“Another serious blow to the District’s precarious financial situation,” says Mayor Vincent Gray. He warns that the cuts “will probably result in the elimination of key services for residents of the District.”

Unquestionably, especially if he’s talking about the total prospective losses.

On the brighter side, the District almost certainly won’t lose all the funds the pending continuing resolution would take away. The Senate won’t pass the bill as written. President Obama has all but said he’d veto it if the Senate did.

However, the House Republican leadership has made clear that it won’t agree to even a short-term bill to avert a government shutdown unless it includes some cuts in current spending levels.

As so often in these cases, low-income people are likely to get thrown under the bus.

* This is the figure in a just-released budget report by the Coalition on Human Needs. CBPP’s overview for the state-by-state tables and my own calculations put the figure at a rounded-down $752 million.

UPDATE 1: After posting this, I found a state-by-state breakout for the cut to community health centers. According to the national association that represents them, the District would lose $865,826, and 3,755 patients would lose access to care.

UPDATE 2: I originally reported that K-12 education would be cut by $5.4 million. This was an error on my part. The correct figure is in the text above.


How Mom Lives

September 2, 2010

My husband and I just got back from a visit with his mother in Cleveland. We were celebrating her 91st birthday.

Mom is one of those wonderful stereotype-busters. A single mother who successfully raised two boys, keeping them securely housed, well-fed, at the top of their classes and, I gather, happy on the wages she earned as a housekeeper.

She’s still sharp as a tack and fiercely independent. I think she might decline — just sort of settle into waiting for the end — if she had to move to a nursing home.

Instead, she lives alone in the same apartment she’s lived in for about 27 years. She doesn’t get around as much any more. Tires easily and not so steady on her feet. But she takes regular walks and visits with her neighbors.

A testimony to her fighting spirit, since she was paralyzed on one side after a stroke eight years ago. Also to the intensive physical therapy she got, including home visits after she left the rehab facility. Then came an excruciating case of sciatica. All but cured after she decided to risk a spinal operation rather than become bed-bound.

Mom reads a lot. She’s curious about many things — animals, far off places, famous and not-so-famous people, American history. And she does love those Grisham mysteries. The public library delivers the books she asks for and picks them up when she’s finished them.

Still cooks for herself. Free fruits and vegetables come to the building biweekly through an arrangement with a farmers’ market. One of the younger residents picks up bags of non-perishables from a local food pantry. A home aide does in-between shopping, plus some housekeeping.

I’m telling you about Mom because her housing, health and general well-being are all made possible by public benefits.

Her apartment building is public housing for seniors and younger disabled people. Most of her medical care and the home aide are covered by Medicaid. So was the visiting physical therapist. The book service is also publicly funded, as is a portion of the costs of the food pantry items.

So I worry. Ohio has been hard it by the recession. It will soon have to close a budget gap that’s been estimated at $8 billion. And we know what often happens to programs for low-income people when elected officials face a revenue shortage.

The food bank that supplies the pantry depends in part on commodities the U.S. Department of Agriculture purchases under The Emergency Food Assistance Program (TEFAP). As I earlier wrote, funding for these purchases has dropped at the same time need is increasing.

This may help explain why the bags Mom and her fellow residents get have fewer items and less variety now. Just two small cans of veggies in the bag I unpacked. No fruit, fish or dairy. The building’s food pantry intermediary says, “The rest of us [who aren’t well-off] are expected to get by.”

I know this is foolish and sentimental. But I can’t help thinking that if the decision-makers knew Mom they’d find a way to protect the programs that make her life possible.