Tuesday, May 1, 2018

Rent Is Too High

http://www.citylab.com; April 25, 2018


Hello Everyone:

Happy but damp May Day to you all from otherwise sunny Southern California.  Big news of the day: Special Consul Robert Mueller has a few, more like 49, questions for the president.  The questions, available at nytimes.com, cover a broad range of subjects including possible collusion and obstruction of justice.  The New Yorker's Jeffrey Toobin posted a commentary today, suggesting that the president invoke his Fifth Amendment right against self incrimination.  Probably a good idea for a person who likes to tweet his random thoughts in the wee hours of the morning.  Although, he may repeat his recent verbal vomit interview last Thursday on Fox & Friends.  First rule of journalism and prosecution: let your subject talk because they will reveal themselves.  Speaking of people revealing themselves, Secretary of Housing and Urban Development Dr. Ben Carson has shown himself not to be a friend of the poor.

The rent's too damn high. That is the truth regardless of your income level and now HUD wants to make it harder for individuals and families who receive rent subsidies pay the rent.  Kriston Capps reports in his CityLab article "Why HUD Want to Raise the Rent," "A new bill backed by the U.S. Department of Housing and Development aims to raise rents for families who receive housing aid and set the foundation for work requirements.  The proposed rent reforms will affect millions of families, setting new boundaries on aid and limits for the families who need help to pay their rent."

The standalone bill, Making Affordable Housing Work Act of 2018," was introduced, by HUD on Wednesday April 25, would amend the 1937 Housing Act, introducing rent reforms and standards.  Some of the provisions, the bill raises the rent for families receiving housing subsidies from 30 percent to 35 percent.

This five percent increase is more than the annual rent increase allowed under Los Angeles' rent control ordinance and would a burden borne by the most vulnerable families living on frozen budgets way below the poverty line.  The changes in the bill could mean greater burdens or evictions for the poorest Americans.

During a phone interview last Wednesday, Secretary Carson described long waiting lists for housing subsidies that applicants face in every state.  Mr. Capps writes, "He mentioned the fact that just one in four households eligible for assistance actually get help, and noted that the budget barely cover railings for existing families." He said,

The current system isn't working very well,.... Doing nothing is not an option.

True but neither is making it harder for people to remain housed.

Dr, Carson's complaint echo the ones from housing advocates who have repeatedly called on the Trump administration to increase spending on housing subsidies.  However, the solutions overdeveloped by the current administration--i.e. new eligibility standards and higher costs for families--have resulted in sharp criticism from advocates.

Diane Yentel, president and CEO of the National Low Income Housing Coaliton, wrote in an email to CityLab,

Despite claims that these harmful proposals will increase 'self-sufficiency,' rent hikes, de facto time limits, and arbitrary work requirements will leave more people without stable housing, making it harder for them to climb the economic ladder.

The MAHWA bill mimics draft HUD reforms, first reported by CityLab (citylab.com; Feb. 2, 2018; date accessed May 1, 2018).  Mr. Trump signed an executive order (Ibid Apr. 12, 2018) on April 10 mandating requirements for benefits across the social welfare board, laying the foundation for welfare reform impacting housing, food, and healthcare.

Kriston Capps reports, "The bill established a new formula for calculating rent: Families must pay 35 percent of their gross monthly income or 35 percent of what an individual would earn working 15 hours a week for four weeks at minimum wage (whichever is higher)."  Essentially, this works out to $150, triple what families pay under the current system.

Further, the bill also sets down a new minimum rent for households who are currently exempt from paying 30 percent--i.e. the elderly and disabled.  If this bill passes, housing subsidies recipients would need to come up with an additional $50--"a new floor that will introduce a cost burden for the most vulnerable aid recipients.  For some households, especially those who earn less than $2,000 per year, it will mean a powerful shock."

As widely expected, the proposed HUD bill allows public-housing agencies and landlords who accept subsidies to establish work requirements for recipients.  Mr. Capps writes, "This bill does not specify the minimum or maximum hours that a housing authority could set, or address the nature of work involved with work requirements, but gives the secretary the power to set those terms through regulation."

Another proposed reform under MAHWA is alternative rent structures, such as timed escrows, tiered or stepped rent that public housing agencies are can adopt.  The point of these standards, set forth through future regulations, is to serve as time limits for households receiving housing subsidies.  Secretary Carson said "the goal for these new reforms was to relieve lengthy waitlists."  He told CityLab,

Oftentimes these waiting lists mean families must wait for years,.... It's clear for a budget perspective and from a human point [they are] unsustainable.

Admirable sentiment but is raising the rent on low-income housing by five percent the way to reduce the lengthy waitlists?

Raising the rent as a way to reduce the lengthy waitlists feeds into Secretary Carson's oft-repeated theme of self-sufficiency.  The goal of the proposed reforms, according to the secretary, "is to boost incentives that put people into more financially stable situations."  All well and good but in the face of affordable housing shortages, limited options--particularly for families hovering around the poverty line--has raised an alarm for many housing experts.

Although training programs or other work requirements have the potential to help some aid recipients secure employments, most of the subsidy recipients can and already do work.  Further, any proposed work requirements could create an additional burden for employees with irregular schedules--a long running argument of liberal critics of conservative welfare reforms (citylab.com; Apr. 12, 2018).  This is the case in some regions where unemployment is at a record low (bloomberg.com; Mar. 15, 2018; date accessed May 1, 2018).

Making Affordable Housing Work Act of 2018 has not yet been formally introduced by a member of Congress.  When and if it does, it will likely be met with similar criticism that accompanied the farm bill, which imposes new work requirements on families and individuals who rely on the Supplemental Nutrition Assistance Program (Ibid; Feb. 16, 2018).

Will Fischer, a senior policy analyst for the Center on Budget and Policy Priorities (cbpp.org; May 1, 2018), told CityLab in reference to the reforms first presented by the Housing and Urban Development department in February, 

It isn't clear that there's any policy rationale behind this,.... If you work, they raise your rent.  If you don't work, they raise your rent.  If you're elderly, they raise your rent.

Either way, it is a no win situation.