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Nation's poor hit by housing crunch
Tony Pugh | McClatchy Newspapers
<http://www.mcclatchydc.com/227/story/17894.html>
last updated: July 13, 2007 03:49:56 PM
WASHINGTON -- Growing numbers of the nation's poorest
households are using more than half their earnings for
rent while waiting years for federal housing assistance
that may never come.
The phenomenon is largely playing out in urban and
suburban locales, but has exploded recently in rural
areas as coveted rental assistance becomes harder to get
due to high demand and scant funding from Congress.
The lack of affordable homes for poor families is the
nation's No. 1 housing problem and undermines the
stability and security of families and communities
nationwide.
A new report by the Department of Housing and Urban
Development describes the startling growth of the
problem since 2003. It found that 6 million impoverished
households used most of their monthly earnings for
housing or lived in substandard conditions in 2005.
Thatâs an increase of 16 percent, or 817,000 families,
since 2003.
The number of rural families facing this dilemma grew by
51 percent to nearly 1 million households over the same
two-year span.
At the same time, these struggling households saw their
average monthly incomes decline while their average rent
payments increased.
Despite the considerable squeeze and growing need for
help, these 6 million families received no federal rent
assistance from HUD. In fact, federal housing assistance
reaches only about one in four income-eligible
households.
Thereâs simply not enough to go around, in part because
for many years the Bush administration and a compliant
Congress have diverted money from housing and other
domestic programs to pay for tax cuts and the war in
Iraq and Afghanistan.
"There definitely has been a diminution of federal
support for low-income housing in recent years," said
Nicolas Retsinas, director of the Joint Center for
Housing Studies at Harvard University. "Clearly, it says
there are other priorities, and this is not on the short
list."
The lack of assistance, soaring rents, slow wage growth
and a shrinking inventory of affordable apartments have
made it nearly impossible for millions of low-income
renters to adequately house their families.
"If youâre not one of the lucky 25 percent to receive
assistance, you're very likely to have a very high rent
burden or live in substandard conditions or in
overcrowded conditions," said Sunia Zaterman, executive
director of the Council of Large Public Housing
Authorities. "The demand for assistance goes
significantly unmet."
In fact, a family with only one full-time minimum-wage
earner canât afford a standard two-bedroom apartment
anywhere in the country, the Harvard study found.
"We're reaching crisis dimensions in many communities,"
said former HUD Secretary Henry Cisneros, who now chairs
CityView, a Santa Monica, Calif., company that helps
finance and develop affordable housing.
"Itâs just unreasonable to expect that suddenly we're in
an era where 50 percent of a familyâs budget can be
spent on housing. I donât think anyone who looks at the
way families are living in America can justify that, not
even this administration."
Rosalinda Santana, 23, a single mother of two in East
Hartford, Conn., lost her hotel housekeeping job after
taking two weeks off to care for her sick son because
she couldn't afford a babysitter.
While she looks for work, she's putting the bulk of her
$563 monthly unemployment insurance check toward her
$750 rent. Santana applied for a slot in the "Section 8"
Housing Choice Voucher program, the nationâs primary
rent assistance program for low-income families. But she
faces a two- to three-year wait because program funding
hasnât kept pace with demand.
Santana's landlord has been patient about her unpaid
rent, but she and her children could end up back with
relatives in New York City if she doesnât find work
soon.
"I would be in a 14-story building in the projects, in a
small cluttered two-bedroom apartment with my
grandmother and five other cousins," she said. "I left
New York City to give my kids a better life, and I don't
want to go back to living in a crappy situation. I feel
like if there's help out there, I should be able to get
it."
While some view housing assistance as welfare for the
poor, the nationâs largest housing subsidy by far is the
federal mortgage interest tax deduction. Itâs projected
to provide U.S. homeowners an estimated $75.6 billion in
tax breaks this year. Most of that relief will go to
higher-income families.
Voucher recipients, most of whom are elderly or
disabled, pay 30 percent of their earnings for housing
and utilities -- an average of $280 per month -- while
the government subsidizes the balance of housing costs
up to a specified amount.
But long waiting lists for the program are common
nationwide. In Washington, D.C., the waiting list tops
56,000 people. Miami housing officials have reviewed
applications from only 4,000 of the 40,000 people on its
waiting list.
Philadelphiaâs waiting list stood at 30,000 when it was
closed in 2000. Nearly seven years later, some 5,500
people are still waiting.
About 1.8 million families get rent assistance through
the voucher program, which is administered by local
housing authorities. Recipientsâ average household
income is about $12,000.
But despite a growing need, Congress hasnât funded an
expansion of voucher recipients since 2002. And
lawmakers underfunded the program by $570 million in
2005, leaving vouchers used by roughly 80,000 families
without funding.
The shortfalls and funding changes enacted since 2004
have resulted in 150,000 fewer families being in the
program, experts say.
Utilization rates for vouchers have been declining in
recent years, as public housing agencies hold rather
than issue unused vouchers because of funding
uncertainties.
"Many have tried to accumulate funding reserves rather
than assist more families in order to reduce the risk
that they will be caught short in the future," said
Douglas Rice, a housing policy analyst with the Center
on Budget and Policy Priorities, a liberal think tank.
Making matters worse, Retsinas estimates that 200,000
affordable apartments -- in which tenants pay less than
30 percent of their income for housing and utilities --
are lost in the U.S. each year.
For every new affordable housing unit constructed, two
are demolished, abandoned or become condominiums or
expensive rentals, according to the John D. and
Catherine T. MacArthur Foundation.
Nearly 375,000 U.S. apartments have been converted to
condominiums since 2002, according to Real Capital
Analytics, a New York real estate consulting firm.
Other affordable apartments are lost when building
owners opt out of a HUD "Section 8" program that
guarantees rent payments to owners who lease to low-
income tenants. More than 118,000 HUD-subsidized
apartments have been lost that way since 1997, 600 alone
in Washington since October.
When the owner of Dorothy Paulâs HUD-subsidized
townhouse in D.C. decided in 2002 not to renew his
subsidized-housing contract, Paul tried to buy the home
for $106,000, which was the fair market price at the
time. But the owner balked at the deal just as property
values took off throughout the city.
Five years later, Paul is still in litigation to enforce
the original sale agreement, but the home could now
fetch well more than $400,000. Thatâs much more than
Paul can afford.
The owner is trying to evict Paul so he can renovate and
sell the property in the open market. As her legal
battle drags on, her rent has soared to $1,200 a month,
which eats up well over half of her income as a hair
stylist.
If evicted, Paul fears sheâll be forced to leave the
neighborhood and city she loves.
"All I can do is keep fighting until they say itâs over.
I don't know what else to do. I canât afford to stay in
D.C. I just really believe that I'll get justice," she
said.
Federal funding for housing assistance reached 10.2
percent of non-military discretionary spending in 1998,
a 36-year high. But it fell to 7.7 percent of federal
spending last year, a 16-year-low.
The Democratic-controlled Congress is moving to address
the problem. Thursday night, the House passed
legislation by Rep. Maxine Waters, D-Calif., to revamp
and increase funding for the voucher program. The bill
would also add 100,000 new vouchers over five years.
"This bill sets the voucher program back on track as a
credible and reliable program," said Sheila Crowley,
president of National Low Income Housing Coalition. And
on July 19, the House Financial Services Committee will
hold a hearing on proposed legislation to create a
national housing trust fund to build, preserve and
rehabilitate 1.5 million affordable housing units over
10 years.
HUD Secretary Alphonso Jackson has called on cities and
states to loosen development and zoning restrictions
that delay or block the construction of affordable
housing units. But housing advocates generally give the
Bush administration low marks for providing little
relief to struggling renter families.
While housing assistance accounts for just over 1
percent of the federal budget, the voucher program
consumes nearly half of HUDâs budget, up from 36 percent
in 1998.
The Bush administration has tried for several years to
eliminate and replace the program with new initiatives.
HUD officials said the changes would contain costs and
streamline the program. Critics said the moves would cut
program funding, jeopardize tenant rights and increase
their out-of-pocket costs. Congress never implemented
the changes.
HUD now wants to lift a longstanding cap on the number
of families that can be served in local voucher
programs.
Doing so would free about $840 million in unspent
voucher funds that housing agencies accrued from funding
changes and conservative distribution and would allow
more people to be served, said Orlando Cabrera, HUD
undersecretary for public and Indian housing. Rather
than increasing program funding, Cabrera favors giving
housing authorities more flexibility to tailor the
program to their needs.
"Instead of trying to provide greater flexibility, the
argument invariably goes to 'Oh, gee, no, itâs not
enough (money).' Well, wait a minute. It is enough.
Letâs look at these caps (on voucher recipients). Letâs
give these housing agencies greater flexibility to act,"
Cabrera said.
But the administrationâs 2008 budget proposal provides
no inflation adjustment even though the program relies
on private market rents, said Linda Couch, deputy
director of the National Low Income Housing Coalition.
The HUD proposal "deserves a serious look," said Rice of
the Center on Budget and Policy Priorities, but not
until the programâs funding formula is changed and
stabilized, giving struggling agencies a chance to
rebuild their programs.
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