[Marxism] As Affordable Housing Crisis Grows, HUD Sits on the Sidelines

Louis Proyect lnp3 at panix.com
Sat Jul 28 11:32:45 MDT 2018


NY Times, July 28, 2018
As Affordable Housing Crisis Grows, HUD Sits on the Sidelines
By Glenn Thrush

WASHINGTON — The country is in the grips of an escalating housing 
affordability crisis. Millions of low-income Americans are paying 70 
percent or more of their incomes for shelter, while rents continue to 
rise and construction of affordable rental apartments lags far behind 
the need.

The Trump administration’s main policy response, unveiled this spring by 
Ben Carson, the secretary of housing and urban development: a plan to 
triple rents for about 712,000 of the poorest tenants receiving federal 
housing aid and to loosen the cap on rents on 4.5 million households 
enrolled in federal voucher and public housing programs nationwide, with 
the goal of moving longtime tenants out of the system to make way for 
new ones.

As city and state officials and members of both parties clamor for the 
federal government to help, Mr. Carson has privately told aides that he 
views the shortage of affordable housing as regrettable, but as 
essentially a local problem.

A former presidential candidate who said last year that he did not want 
to give recipients of federal aid “a comfortable setting that would make 
somebody want to say, ‘I’ll just stay here; they will take care of me,’” 
he has made it a priority to reduce, rather than expand, assistance to 
the poor, to break what he sees as a cycle of dependency.

And when congressional Democrats and Republicans scrambled to save his 
department’s budget and rescue an endangered tax credit that accounts 
for nine out of 10 affordable housing developments built in the country, 
Mr. Carson sat on the sidelines, according to legislators and 
congressional staff members.

Local officials seem resigned to the fact that they will receive little 
or no help from the Trump administration.

“To be brutally honest, I think that we aren’t really getting any help 
right now out of Washington, and the situation has gotten really bad 
over the last two years,” said Chad Williams, executive director of the 
Southern Nevada Regional Housing Authority, which oversees public 
housing developments and voucher programs that serve 16,000 people in 
the Las Vegas area.

Nevada, ground zero in the housing crisis a decade ago, is now the 
epicenter of the affordability crunch, with low-income residents 
squeezed out of once-affordable apartments by working-class refugees 
fleeing from California’s own rental crisis.

“I think Carson’s ideas, that public housing shouldn’t be 
multigenerational, are noble,” Mr. Williams said. “But right now these 
programs are a stable, Band-Aid fix, and we really need them.”

Underlying the conflict between Mr. Carson and officials like Mr. 
Williams are fundamental disagreements over the role the federal 
government should play.

Mr. Carson believes federal aid should be regarded only as a temporary 
crutch for families moving from dependency to work and sees the rent 
increases as a way to expand his agency’s budget. Low-income renters and 
many local officials who run housing programs see the federal assistance 
as a semi-permanent hedge against evictions and homelessness that needs 
to be expanded in times of crisis.

This year, the White House proposed to slash $8.8 billion from the 
Department of Housing and Urban Development’s most important housing 
programs. While aides say Mr. Carson privately pushed for a restoration 
in programs for seniors and disabled people, he publicly supported the 
gutting of his own department, reiterating to lawmakers last month that 
he felt as much responsibility toward taxpayers as tenants.

“I continue to advocate for fiscal responsibility as well as 
compassion,” Mr. Carson told a House committee in June. He declined to 
comment for this article.

Under Mr. Carson’s most significant policy proposal as secretary, 
so-called maximum rents paid by the poorest households in public housing 
would rise to $150 a month from $50.

His proposal has received little support from local housing operators. 
Over the past month, Mr. Carson has huddled with Representative Dennis 
A. Ross, Republican of Florida, who is drafting less stringent 
legislation that would allow, but not mandate, local housing authorities 
to raise rents and carry out reforms to streamline the process of 
verifying the poverty of applicants, aides said.

Still, both proposals represent a paradigm shift in federal housing 
policy, ending the requirement that low-income tenants spend no more 
than 30 percent of their net income on rent.

Tying rents to incomes has been a central part of the system since 1981, 
especially for the Section 8 housing voucher program, enabling 2.1 
million low-income families to rent private apartments they could not 
otherwise afford. Mr. Carson’s proposal would peg rents to 35 percent of 
gross income for all tenants. The Ross bill excludes voucher recipients, 
at the request of local housing authority officials.

“We need sensible reforms to make the system more efficient for agencies 
and residents,” said Adrianne Todman, chief executive of the National 
Association of Housing and Redevelopment Officials. “But now is not the 
time for arbitrary federal rent hikes.”

“This isn’t about dependence,” said Diane Yentel, president of the 
nonprofit National Low Income Housing Coalition, a Washington-based 
advocacy group that has released several recent reports documenting the 
affordability crunch. “Today’s housing crisis is squarely rooted in the 
widening gap between incomes and housing costs.”

And the crisis didn’t begin under Mr. Trump’s presidency.

Median national rents rose by 32 percent in constant dollars from 2001 
to 2015, while wages remained flat, according to the Pew Charitable 
Trusts. The pace has picked up over the last few years, buoyed by an 
improving economy.

The rent increases are hitting poor and elderly people, 
African-Americans and low-income wage earners the hardest. A survey by 
the National Low Income Housing Coalition found that a worker earning 
the state minimum wage could afford a market-rate one-bedroom apartment 
in only 22 of the country’s 3,000 counties.

The Obama administration initially proposed steep increases for Section 
8 and other programs, but pulled back after the Republicans won control 
of the House in 2010.

During the 2008 campaign, Mr. Obama promised to fund an affordable 
housing trust fund for the construction of new units. But the 
$200-million-a-year program, funded by the profits of Fannie Mae and 
Freddie Mac, was blocked by Republican lawmakers until 2014. In 2017, it 
was on track to finance the construction of about 1,000 units of 
affordable housing in 32 states, according to federal data.

Its sister program, the Capital Magnet Fund, which has leveraged private 
investment to create 17,000 new units, is in the cross hairs of Mr. 
Trump’s budget director, Mick Mulvaney, who tried to cut it by $141.7 
million this year as part of his unsuccessful budget recession effort 
this summer.

Under Mr. Trump, funding for public housing, vouchers and new 
construction has risen slightly — against the president’s wishes.

In March, Republican and Democratic negotiators rejected Mr. Trump’s 
budget, adding $1.25 billion to HUD’s rental assistance programs and 
injecting an additional $425 million to the HOME program, which funds 
state, local, nonprofit and private partnerships to build affordable 
housing.

Those moves, while significant, are likely to have a limited impact on 
the larger problem of the increasing number of families who cannot 
afford a place to live.

While prices are cooling at the high end of the market in many big 
cities, the low- and middle-income housing markets in Nevada, Texas, 
California, Florida and Colorado are so hot, local officials say, that 
landlords routinely reject subsidized tenants because they can charge 
more to other renters.

Rental construction has focused on attracting high-income tenants. From 
2001 to 2013, the number of rental apartments for high-wage earners 
increased by 36 percent, while units for poor people shrank by nearly 10 
percent, according to federal housing statistics.

With affordable stock scarce, prices are spiking. An estimated 12 
million Americans, most of them poor, now spend more than half of their 
earnings on housing, according to HUD statistics.

One of them is Judith Toro Fortyz, 75, who receives $848 a month in 
Social Security and pays $594.88 of it to remain in the small 
two-bedroom apartment on Staten Island that she once shared with her mother.

Mrs. Toro Fortyz has been turned down for federal vouchers, reflecting a 
shortage in assistance that has shut out three of every four eligible 
applicants for Section 8. Even with an additional housing stipend from 
the city, she is spending 70 percent of her income on rent.

That has forced her to make wrenching decisions, like forgoing her 
favorite fruit, oranges, after a price spike at her local supermarket.

“I stay home a lot. I’d rather not go out because going out means you 
have to spend money,” said Mrs. Toro Fortyz, a retired data storage 
worker. “I have a friend who gets Section 8 and, oh my God, they pay 
$200 a month. I can’t even imagine having that much money to live on.”

Mr. Carson’s proposal alarmed many low-income tenants, especially older 
ones, who could face significant rent increases under the plan. “We 
basically wouldn’t be able to get by,” said Patrick Greene, 69, a 
retired truck driver who lives in a small HUD-subsidized apartment with 
his wife in Montgomery, Ala.

A more immediate threat to affordable housing, critics say, is the huge 
tax bill passed by Congress last year, which imperils one of the most 
important sources of long-term funding, the Low Income Housing Tax Credit.

Novogradac & Company, a firm that provides analytics for the 
construction and finance industries, estimated that demand for the 
$9-billion-a-year credit could dry up as investors realize savings 
through the tax cuts. The firm estimates that nearly 235,000 fewer 
apartments could be built over the next decade as a result of the tax 
code rewrite.

A bipartisan coalition, led by Senator Maria Cantwell, Democrat of 
Washington, and Senator Orrin Hatch, Republican of Utah, was able to 
expand the credit by an additional $400 million. But that is not likely 
to offset the damage done by the tax measure.

The administration is observing these efforts from the sidelines. Mr. 
Trump, scion of a New York real estate family that made its fortune in 
the 1950s and 1960s building affordable housing for white working-class 
neighborhoods, has shown little interest in tackling the problem.

He made only passing mention of the issue during the 2016 campaign and 
has pressed Mr. Carson to move more aggressively to impose work 
requirements on federal aid recipients.

For his part, Mr. Carson publicly acknowledges the crisis in most of his 
speeches. “Alarmingly high numbers of Americans continue to pay more 
than half of their incomes toward rent,” he told a House panel in 
October. “Many millions remain mired in poverty, rather than being 
guided on a path out of it.”

But he is focused less on federal solutions than on prodding local 
governments to ease barriers to construction. He has ordered his policy 
staff to come up with proposals to push local governments to reduce 
zoning restrictions on new projects, especially low-cost manufactured 
housing. HUD will also begin working with landlords around the country 
to come up with ways to make housing vouchers more attractive and more 
inclusive, aides said.

“Subsidies are a piece of the puzzle,” said Raffi Williams, a spokesman 
for Mr. Carson, “but we must also address the regulatory barriers 
relative to zoning and land use in higher-cost markets that are 
preventing the construction of new affordable housing. This is not just 
a federal problem — it’s everybody’s problem.”




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