Although more than six years have passed since the start of the housing crisis that has devastated so many families, communities, and our economy, many of our nation’s most vulnerable households continue to suffer.
At the end of February, the U.S. Department of Housing and Urban Development (HUD) released the latest “worst case housing needs” summary report, revealing that the number of lower-income households struggling to pay rent, as well as those living in substandard housing, continued to grow over the last couple of years.
This report underscores that our housing system is still broken and is failing to serve those most in need.
Unfortunately, the polarization of our policymakers in Washington has prevented solutions to this, and other, challenges facing our nation. The only hope to see significant reforms enacted is to gain across-the-aisle consensus.
At the Bipartisan Policy Center (BPC), our Housing Commission has worked for more than 16 months to craft a solution that not only fixes our housing system, but also can find consensus among both Republicans and Democrats, in Congress and the administration.
Our commission, comprised of former members of Congress, cabinet secretaries, housing advocates, industry representatives, and experts, met with a wide range of stakeholders across the country. We heard first-hand of the diverse housing needs and out-of-the-box solutions in communities in Florida, Texas, Missouri, Maine, Illinois, California, and Washington, D.C., to name a few.
While it wasn’t easy, after months of meetings, phone calls, emails, and studies, we developed consensus on a set of recommendations to reform our systems of housing finance, homeownership, and affordable rental policies.
Entitled Housing America’s Future: New Directions for National Policy, the commission’s recently released report calls for dramatic reforms to our nation’s rental and homeownership policies to ensure our most vulnerable citizens are assured access to housing assistance if they need it.
To meet the needs of our nation’s most vulnerable, the commission took a hard look at the current housing system. Under the current system, demand for assistance far outstrips the supply of rental subsidies, with only one in four eligible Americans receiving the help they need. Rental assistance is allocated through lengthy waiting lists and lotteries. Our commission proposes replacing this lottery system and instead serving all the lowest-income households – those at 30 percent of area median income and below – who need help.
The commission also feels that the way rental assistance was delivered should be improved, and proposes moving to a new performance-based approach that focuses on resident outcomes and rewards high-performing state and local housing providers with increased regulatory flexibility, so long as they continue to demonstrate positive results. Our goal is to create partnerships that link housing with healthcare, education, employment, and other services that help residents do better across the board.
Also, as we saw during the housing crisis and the subsequent economic downturn, when a family suffers a financial setback, like a job loss or health crisis, a stable housing situation can quickly spiral down, even resulting in homelessness. To help minimize harmful housing instability, the commission recommends short-term emergency assistance for low-income renters—for those with incomes between 30 and 80 percent of area median income.
The BPC Housing Commission also worked on recommendations, such as the expansion of the Low Income Housing Tax Credit program, to address the shortage of affordable housing supply—a main driver behind the steady increase in the number of “worst case needs” renter households. There was agreement on the need to preserve the existing stock of public housing – 1.2 million units – by meeting its long neglected capital needs.
Clearly these recommendations will require a significant investment, and at a time when we face serious constraints on the federal budget. In that context, the commission notes that the federal government already spends a substantial amount in support of housing, the majority of which is in the form of tax subsidies for homeownership—primarily the mortgage interest and property tax deductions, and capital gains exclusion.
While we support continuation of incentives for homeownership, one of our principles is that there should be a better balance between the homeownership and rental subsidies. Recognizing that housing-related tax deductions will be under consideration as part of tax reform, we feel that any revenue generated from changes in tax subsidies for homeownership should be devoted to expanding support for affordable rental housing for low-income people in need. We recognize that these changes would have to take place over time.
For first-time homebuyers, the commission emphasizes the value of housing counseling to improve a prospective borrower’s access to affordable, prudent mortgage loans. The commission suggests counseling is especially beneficial for borrowers who might not otherwise qualify or who may experience other barriers to conventional lending.
Good housing is fundamental to each of us – not only as individuals and families – but also to our communities and our economy. Unfortunately, this “fundamental” is out of reach for too many vulnerable Americans, as the latest “worst case” data from HUD demonstrates.
Those of us on the BPC Housing Commission have an optimistic vision for our housing future. Through common-sense reforms we can create a system that ensures Americans have access to safe and affordable housing for the long term.
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Christopher “Kit” Bond is a former U.S Senator from Missouri.
Nan Roman is the president and CEO of the National Alliance to End Homelessness.
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