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Dimensions of the Affordable Housing Crisis
The following are select comments that Sheila Crowley of the National Low Income
Housing Coalition made on May 3rd before the Congressional Subcommittee on Housing
& Community Opportunity.
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Housing policy can be unnecessarily complicated, but housing is quite straightforward.
Everyone needs a basic, stable, safe, fair, and clean place to live and the capacity
to pay for it. Some may need additional services to assure stability. That is the
social minimum. In the absence of a national commitment to this standard, it is
foolhardy to expect people to succeed as workers, students, parents, or citizens,
all roles that depend on housing stability to be fulfilled well. Beyond the social
minimum, people can make all manner of other housing decisions - where, what size,
how much, what amenities, rent or own - and public policy should support those that
serve a good public purpose. But without attending to the social minimum in housing,
we undermine the potential to achieve other desired social objectives and erode
the foundation of our housing system.
The Housing Wage
I would like to place in the record two reports by the National Low Income Housing
Coalition that address housing unaffordability. The first is Out of Reach, which
documents the gap between income and housing costs in every jurisdiction in the
country. We publish these data in the fall and these are from September 2000. This
is the source of what has become a frequently cited refrain by housing advocates
and public officials: "There is no jurisdiction in the country where a full
time minimum wage worker can afford the fair market rent."
The National Low Income Housing Coalition has examined the 1999 American Housing
Survey data about the housing concerns of low income people. Some of the findings
* 34 million households rented their housing in 1999, about one third of all households.
* 62% of the renter households were low income using the federal definition of incomes
at or below 80% of the area median. 23% of all renter households are extremely low
income or have incomes at or below 30% of the area median. In Sussex County, NJ,
30% of area median income is $22,022 annually.
* 32% of owner households are low income and 11% are extremely low income.
* 24% of all renter households (8.2 million) had severe housing problems, either
housing costs at 50% of income or more or severely inadequate housing. Severe housing
problems are primarily the experience of low income households; 68% of renter households
with severe housing problems (mostly high cost burden) have extremely low incomes.
* 11% of all owner households (7.7 million) had severe housing problems, and 54%
of these households are extremely low income. Of note is that 37% of owner households
with severe housing problems are first time homebuyers.
The Rental Housing Shortage
One finding in this analysis is of particular importance to those who make housing
policy decisions. We analyzed the shortage of rental housing units by income. Although
these are national data and therefore cannot tell the story in any given community,
they do give a glimpse of the overall scope. Of the 34 million renter households,
7.7 million have extremely low incomes (30% of the area median or less). In the
aggregate, there are only 4.9 million units of rental housing that are affordable
to these households, thus an absolute shortage of 2.8 million units. (Note that
there is a range of incomes from 0 to 30% of area median in this group and not all
units are affordable to all households in this range.) However, only 2.3 million
of these units are actually occupied by households with incomes in this range. The
rest are occupied by higher income households who do not have high housing cost
burdens as a result. So overall, there is a shortage of 5.3 million units affordable
for the poorest renter households...
Besides low wage workers, the population of extremely low income rental households
includes elderly and disabled people whose only income is from SSI (Supplemental
Security Income) or other fixed income sources. According to the Coalition for Citizens
with Disabilities, about 1.4 million (35%) of the more than 4 million disabled SSI
beneficiaries have severe housing cost burdens.
The Meaning of the Affordable Housing Crisis for Families
The numbers are quite stark. You will learn about other analyses during this hearing
with equally gloomy data. But the numbers fail to convey the meaning of housing
unaffordability, especially for the very poor. We are all familiar with the stories
of people who cannot afford to pay for all necessities and therefore have to make
choices about paying the rent, keeping the heat on, and purchasing food or medicine.
We also can understand the negative consequences for family life and child well-being
when the adults in the household have to work two or more jobs to earn enough to
sustain the family. Families also reduce housing costs by doubling up down with
other families in crowded and stressful circumstances. Or they fall prey to unscrupulous
landlords who may charge less rent, but offer substandard and unsafe housing in
return. Families or individuals who fall behind in their rent risk poor credit ratings
at best and eviction and homelessness at worst. Children with high rates of residential
transience are likely to also have high rates of school transience and resulting
educational deficits. Adults with significant housing stress have a much harder
time maintaining stable employment, especially if they have to add the cost of child
care or transportation to their already stretched household budgets.
The relationship between housing affordability and housing stability is well illustrated
in the findings of research that examined predictors of family homelessness.
Families receiving public assistance who requested emergency shelter and a comparison
group of other families on public assistance who did not need emergency shelter
were interviewed on a range of dimensions and reinterviewed five years later. The
only variable that correlated with housing stability for the formerly homeless families
was receipt of housing assistance, that is, financial aid that closed the gap between
their incomes and the cost of housing.
Solving a Solvable Problem
This leads us to a discussion of the solutions to what we believe is a solvable
problem. The Coalition advocates for a multi-pronged strategy that begins with income
policy and measures to improve the economic well-being of low income families, including
increasing the minimum wage, expanding the earned income tax credit, living wage
requirements, education and training that improves employment prospects, and economic
development that creates better paying jobs.
Increasing the ability of low income families to compete in the housing market is
also the objective of the federal housing voucher program. Expansion of the number
of new vouchers each year, coupled with a range of reforms that will improve voucher
utilization, should be basic to any strategy that this committee advances. While
we applaud Secretary Martinez's decision to seek 34,000 new vouchers in this year's
HUD budget request, the data presented to you today clearly indicates the inadequacy
of this initiative.
In a multi-pronged strategy to solving the affordable housing crisis, the vouchers
vs. hard units debate becomes irrelevant. Preservation of the existing assisted
housing stock, principally public housing and Section 8 project-based housing, in
which the federal taxpayer has invested considerable resources, is sound housing
policy. No one supports keeping housing that is deteriorated beyond repair, but
housing that is in good condition and is now someone's home should be cared for
as we care for other publicly funded structures. Cuts to the public housing capital
fund as the Secretary proposes are short-sighted. Besides dealing with the backlog
in capital improvements to public housing, federal policy should support the transfer
of privately owned assisted housing to the non-profit housing sector committed to
assuring its long term affordability.
The third element of a comprehensive housing policy is continued replenishment of
the affordable housing stock. The federal retreat from affordable housing production
that began in the late 1970s must be understood as contributing to today's housing
crisis. Resources and incentives for the building of new rental housing have
lagged far behind the demand, and the shortage of affordable rental housing in many
communities is the result. In the last full year of the Ford Administration, HUD's
budget authority was three times what it is today. In the same time period, total
federal budget authority has almost doubled. While low income housing outlays have
increased at a slow rate, housing related tax expenditures have quadrupled in the
last 25 years. The more expensive one's home is, the greater the subsidy one receives
through tax expenditures. The value of homeowner assistance via the tax code is
now nearly four times greater than the HUD budget. Back
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