The Continued Importance of Affordable Housing and “Poverty, Politics and Profit”

On May 9, PBS aired a Frontline and NPR investigation on federal dollars that are spent on affordable housing, examining why so few low-income Americans receive the help they need. Central themes of the investigation highlighted the urgency for additional resources needed to address the nation’s growing affordable housing crisis. Currently, one in four renter households spends more than 50 percent of their income on housing, and there is no state in the U.S. where a worker earning full-time minimum wage can afford a modest, one-bedroom apartment. NAHRO welcomes discussion on the importance of addressing our nation’s affordable housing needs, which continue to escalate, however, we would like to clarify a number of points in response to this program.

Low-Income Housing Tax Credit

  • The Low-Income Housing Tax Credit (LIHTC or “Housing Credit”) is widely regarded as our nation’s most successful tool for encouraging private investment in the production and preservation of affordable rental housing: LIHTCs have been a critical source of equity for almost 3 million affordable housing units over the last 30 years, providing affordable homes to 6.7 million low-income families, seniors, veterans, people with disabilities and the formerly homeless, and supporting 3.25 million jobs.
  • The LIHTC is an extremely vital component in our nation’s affordable housing toolkit: Virtually no affordable rental housing development would occur without LIHTC.  Many communities have used this program to leverage other federal, state and local affordable housing programs that exist today, including the Rental Assistance Demonstration, Choice Neighborhoods, HOME, and CDBG.
  • The LIHTC is a tax credit program that is not directly funded by the federal government: The Public Housing and Section 8 programs mentioned in the show are administered by the Department of Housing and Urban Development (HUD). HUD’s annual budget is subject to the annual appropriations process and it is Congress who ultimately decides whether to fully fund HUD programs or not. LIHTC is statutorily authorized through the federal tax code and is administered by the Internal Revenue Service (IRS) through an annual allocation of tax credit authority. Unlike a direct funding program, private investors – not the federal government – provide all the equity up front and bear the financial risks in the housing development. Thus, investors audit and inspect properties regularly and thoroughly or else they forfeit their tax benefits.

Section 8 Vouchers

  • There are not enough vouchers to meet demand: As the program points out, there is only one voucher for every four eligible households, which creates long wait lists to receive vouchers which may span years in certain areas. Additional funding is needed for the Housing Choice Voucher Program and other Section 8 programs to ensure that all those who need vouchers receive vouchers.
  • In many areas, finding landlords who accept vouchers can be difficult: One of the reasons that many landlords do not accept vouchers is because of the excessive regulations that are tied to the voucher program. Streamlining these regulations and making it easier for housing authorities to start payments to landlords will help landlord retention.

Public Housing

  • There are 1.1 million units of federally subsidized public housing: Although the Faircloth Amendment to the United States Housing Act of 1937 prohibits HUD from funding the construction or operation of new public housing units, the Public Housing program continues to house millions of families, elderly individuals, disabled persons, and veterans. The Frontline program included a family that received a voucher, but could not find a landlord to accept the voucher. In the end, the family was able to find a home through the Public Housing program.
  • Public housing is a federal asset: Due to the “Declaration of Trust” placed on public housing units, the Public Housing program is the only federally-assisted housing that must remain affordable to its tenants in perpetuity.  
  • Although public housing provides safe, affordable, and secure housing to millions of low-income Americans, the inventory faces a mounting capital needs backlog: Appropriations for the Public Housing program continue to lag dangerously behind accruing modernization needs. At the same time, funding for operations has endured deep cuts, forcing units to go without critical maintenance functions and thus further jeopardizing the long-term sustainability of many properties. More money is needed from Congress to ensure that these critical affordable units continue to provide low-income Americans with access to safe, secure housing.

Finally, we’d like to emphasize that, while the affordable housing crisis continues, NAHRO members and other affordable housing and community development practitioners nationwide continue to work tirelessly to provide our nation’s most vulnerable with decent, safe and affordable housing in sustainable communities. The NAHRO Awards of Excellence Database contains many of their successes and achievements. Even more can be found via by searching for the  #WHAAT (What Has Your Housing Agency Accomplished Today) hashtag on Twitter or going through our tweets at @nahronational.

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