Last week, the House Subcommittee for Transportation, Housing, and Urban Development approved a bill that cuts funding for affordable housing for the lowest income households. The move by House Republicans imperils a crucial resource that can help address homelessness.
The National Housing Trust Fund is the only resource dedicated solely to funding affordable housing for people most at risk of becoming homeless. In December, money started flowing into the fund for the first time from Fannie Mae and Freddie Mac. But the House bill directs money reserved for the fund to cover a congressionally created deficit in funding for another affordable housing program, the HOME program.
Widespread, mass homelessness can be traced to a sharp increase in affordable housing: today there is a 5.5 million shortfall in affordable housing units compared to the need, but there was actually a 300,000 surplus as recently as 1970. If that need were met, however, homelessness would be effectively ended.
While both the National Housing Trust Fund and the HOME program seek to foster affordable housing, the National Housing Trust Fund focuses on the most vulnerable and low-income populations, making it a key resource toward that goal. Most Trust Fund money must go to support housing for extremely low-income families, those whose incomes are not greater than 30 percent of area median income. Through their latest bill, House Republicans would effectively eliminate the Housing Trust Fund.
The House bill isn’t the first attempt to end the Housing Trust Fund. House Republicans strongly opposed Federal Housing Finance Agency director Mel Watt’s decision to allow money to start flowing into the Trust Fund in December. Senior Republicans then rallied around a bill that would block FHFA from funding the Trust Fund.
The latest bill comes at a time when families are being squeezed by high rents and paying unaffordable sums for housing. According to the Joint Center for Housing Studies, more than a quarter of households who rent paid more than half of their incomes for housing between 2001 and 2011. In 2012, over 80 percent of households with an annual income under $15,000 had to pay over 30 percent of their paychecks for housing. Adding to this housing affordability squeeze, extremely low-income renters have been forced to compete for a shrinking stock of affordable and available units due to sequestration and current funding levels for housing assistance.
The National Housing Trust Fund was kept out of the budget appropriations process so that it wouldn’t be subject to political pressure and a complicated process, which don’t provide enough money for affordable housing as it is. By channeling funds from the trust fund to HOME, Republicans in the House would jeopardize an important and independent resource for renters trying to make ends meet and avoid homelessness across the country.