CARSON SAYS HE ADVOCATES FOR BOTH FISCAL RESPONSIBILITY, COMPASSION’
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 California’s own rental crisis.
“I think Carson’s ideas, that public housing shouldn’t be multigenerational, are noble,” Williams said. “But right now these programs are a stable, Band-aid fix, and we really need them.”
Underlying the conflict between Carson and officials like Williams are fundamental disagreements over the role the federal government should play.
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 Carson privately pushed for a restoration in programs for seniors and people with disabilities, 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,” Carson told a House committee in June. He declined to comment for this article.
Under Carson’s most significant policy proposal as secretary, minimum 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, Carson has huddled with Rep. Dennis A. Ross, R-fla., 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. 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, CEO 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.”
The crisis didn’t begin under Trump’s presidency.
Median national rents rose 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 past few years, buoyed by an improving economy.
The rent increases are hitting poor and elderly people, blacks 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 Republicans won control of the House in 2010.
During the 2008 campaign, President Barack 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 crosshairs of 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 Trump, funding for public housing, vouchers and new construction has risen slightly — against the president’s wishes.
In March, Republican and Democratic negotiators rejected 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 36 percent, while units for poor people shrank 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.
Toro Fortyz has been turned down for federal vouchers, reflecting a shortage in assistance that has shut out 3 of every 4 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.
“I stay home a lot. I’d rather not go out because going out means you have to spend money,” said 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.”
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 & Co., 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 Sens. Maria Cantwell, D-wash., and Orrin Hatch, R-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. 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 Carson to move more aggressively to impose work requirements on federal aid recipients.
For his part, 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 throughout 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 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.”