Federal housing support cut? Step up, private sector

By Kevin Zwick and Emmett D. Carson

The steady stream of Executive Orders, the ongoing promise of sweeping budget cuts to many parts of government and the ongoing lack of cohesion in Congress are creating anxiety for many safety-net programs that rely on federal funding. Will there still be dollars coming in fiscal year 2018? Should local programs reduce their services in anticipation?

These are the hard questions facing many agencies, including those focused on affordable housing. There are three specific budget/policy changes under consideration that could wallop affordable housing programs and the people who rely on assistance to pay the rent.

In April, the U.S. Department of Housing and Urban Devel- opment began warning local housing organizations of reduced funding for housing vouchers and other housing programs. That is, less money will be available to help a community’s poorest residents stay housed.

In Santa Clara County alone, President Trump’s FY18 budget proposal could mean lost funding exceeding $57.7 million.

Created in the 1970s, the “Section 8” Housing Choice Voucher Program helps more than 5 million people in the U.S. find and keep decent housing by subsidizing rents. Under Trump’s budget proposal for 2018, vouchers for about 290,000 low-income households would be eliminated. In our high cost area, the loss of this support would be life-changing for these families.

The federal Low Income Hous- ing Tax Credit is also at risk. Since 1986, the program has been instrumental in the construction or rehabilitation of nearly 3 million affordable homes.

With the promise of corporate tax rates being cut to as low as 15 percent (from 35 percent), investors will have much less incentive to support affordable housing construction to reduce their tax bills. Santa Clara County alone needs more than 70,000 new affordable homes for lower income renters. How will developers fill the massive funding gaps created by drastic reductions in low-income housing tax credit equity?

Finally, there is the real possibility that the President’s budget would mean the end of the Department of Treasury’s CDFI Fund, the largest single source of equity for Community Development Financial Institutions. CDFIs such as Housing Trust Silicon Valley are driven by a mission—to promote economic opportunity in our region and among the poor. The CDFI Fund provides grant capital to institutions that leverage these public dollars as much as eight to 10 times in their local markets.

As dire as these three threats to affordable housing are, there is a unique opportunity for us in the Bay Area. We are a region of innovation and a region that recognizes the need to provide opportunities for all. We know we have the prosperity, but do we have the desire to mend the leaks in affordable housing funding caused by federal actions?

We saw the first steps toward local empowerment in November, when voters in three Bay Area counties approved measures that will generate more than $2 billion for affordable housing.

While we fight potential doomsday scenarios from Washington D.C., now is also the time for corporations, philanthropic foundations and individuals with wealth and resources to actively tackle the housing crisis that threatens our region’s vibrancy, diversity, quality of life and economic sustainability.

Private investment may not be able to compensate for federal cutbacks, but it can help thousands of our most vulnerable residents have safe, stable places to live.

Kevin Zwick is CEO of Housing Trust Silicon Valley. Emmett Carson is CEO of Silicon Valley Community Foundation. They wrote this for The Mercury News.