Washington, DC – (RealEstateRama) — From NYCHA’s $17 billion repair backlog to the deficit of rental assistance in a city with soaring housing costs, New Yorkers have long suffered from the federal government’s reduced spending on housing, which remains far below pre-Reagan era levels. In the country as a whole, the unmet needs are momentous, with only one fourth of eligible low-income households receiving the rental assistance they need to afford a home.
And just as we would seem to need it most—with discussions in rezoning neighborhoods often revolving around the question of how much subsidy is available to help low-income households remain in their neighborhoods—many housing and tenant advocates fear that things are about to get a whole lot worse. The president-elect is a real-estate developer with a track record in New York City of discriminating against black tenants and trying to flout affordable housing laws; he has nominated a former Wall Street bank chair for Treasury secretary, and appointed a private equity CEO as a top adviser.
“It’s incredibly concerning to have a developer like Donald Trump that’s going to be in the White House,” says Katie Goldstein, executive director of the statewide organization Tenants and Neighbors. “He was really elected on the idea of going on the aggressive toward poor people, low-income [people] and communities of color.”
Some housing advocates are hoping there may be opportunities to influence the incoming administration in their favor. The National Low Income Housing Coalition (NLIHC), which includes New York groups like Tenants and Neighbors and Supportive Housing Network of New York, sent a letter to the president-elect urging him to invest in housing as part of his plan to rebuild America’s infrastructure. Some have also expressed hope that Ben Carson, Trump’s nominee for the Department of Housing and Urban Development (HUD), might be open to persuasion given his lack of clear policy stances—and seeming desire to please everyone—at last week’s hearing. James Saucedo, a NLIHC organizer, says the coalition will focus its energy on making the case to Republicans that housing affordability and poverty are crucial issues for every district in the country.
“It would be short-sighted and it would be a failure for the people that we care about to not be willing to work with them,” he says.
Others say they expect only complete austerity from the feds, but hope the threat of Trump will galvanize local governments to more seriously address housing issues using their own budgets. In the online journal Metropolitiques, CUNY professor John Krinsky says that for Cuomo and de Blasio to live up to their progressive credentials, they must “[address] themselves seriously to what will happen once the federal government stops supporting public housing and cuts back on vouchers.” To Krinsky, that means ending the 421-a tax break, which the city says promotes rental housing construction but which Krinsky argues could be used to fund more than 100,000 Section 8 rental vouchers. It would also mean using city dollars more effectively, which he says could be done by “breaking with 20-year-old preferences for reliance on private, for-profit developers who have little interest in developing affordable housing for very poor people” and instead working with non-profit developers.
The Right to the City Alliance (RTTC), a national coalition with 10 New York City member organizations including Picture the Homeless, GOLES and FUREE, has a few national demands, but will continue to employ a “trans-local” strategy with the hopes that the threat of Trump will push local policymakers to work more closely with grassroots activists, particularly to implement RTTC’s demands for universal rent control and community control of land through the creation of community land trusts. RTTC organizer Tony Romano is hopeful: Tenant movements are experiencing an upsurge, with several California cities starting or strengthening rent control this November for the first time in decades. Furthermore, the threat of Trump is helping to break silos between different social justice movements, he says. This weekend, Right to the City will be participating in direct actions across the country in alliance with other grassroots groups. Organized under the banner “It Takes Roots to Grow the Resistance,” Romano says the new alliance is united in a push for low-income communities of color to control their own fates.
But even if we can hope for progress on a local level, New Yorkers can’t afford to ignore housing problems outside city borders, says Laura Mascuch, director of the Supportive Housing Network of New York. Rural counties—including areas of upstate New York—depend on federal sources for a greater portion of their housing budgets, and their housing problems affect city residents, too: Nationally, homeownership rates are at their lowest in fifty years, which experts say is helping to drive up demand in the rental market, worsening the affordability crisis in cities. One election result analysis shows a correlation between negative home values and support for Trump. In other words, hiding in a progressive bubble while ignoring federal fights is probably not the answer, either.
Here are 10 national housing battles in the hands of Congress and the White House that activists say could be worth following in the months to come.
1. Protecting HUD from the Ax: In recent years, HUD has been repeatedly subject to spending caps. Low-income housing advocates want those caps lifted and HUD’s budget increased to keep apace with rising fair market rents, but the Trump administration has called for an even greater cut to non-defense spending—a cumulative cut of one percent each year, or what would amount to a 30 percent cut to HUD’s budget by 2026, accounting for inflation. Advocates say such cuts would be detrimental to New York’s public-housing capital backlog, the availability of Section 8 vouchers and the provision of project Section 8 contracts. While Carson recognized at his confirmation hearing that rental assistance can be “life saving,” he also said he supports Trump’s annual one percent cut to non-defense spending, and wants to do more research before proposing a HUD budget. “I don’t know what the number is going to be, quite frankly. It might more, it might be less,” he said.
2. Defending Obama’s Progress on Fair Housing: To improve the implementation of the Fair Housing Act of 1968, which requires that governments work toward reducing barriers to housing and equal opportunity, the Obama administration developed a new rule, along with a set of implementation tools, that would help local governments assess the impacts of their policy decisions on combating housing segregation and discrimination. Republican lawmakers have argued Obama’s efforts are tantamount to social engineering and have introduced bills to outlaw the new program. Carson once called Obama’s fair housing program a “failed socialist experiment,” but at his confirmation hearing emphasized that he was only against “cookie-cutter” government programs, though how this statement applies to Obama’s program is unclear.
3. Growing the National Housing Trust Fund: Created in 2008, this fund finally got its first round of funding after years of delay last year and provides states with block grants to build, preserve, and rehabilitate rental housing, with 75 percent dedicated to extremely low-income families making less than 30 percent of the Area Median Income. It derives its funding from an assessment on Freddie Mac and Fannie Mae’s earnings. Low-income housing advocates would like to see the assessment rate increased or a permanent budget allocation to the fund, but Republicans have called investments in the fund a “lump of coal in the stocking of every American taxpayer.”
4. Opposing Work Requirements and Time Limits: In a policy brief released last June, House Republicans said HUD’s rental assistance programs “lack requirements to encourage greater individual self-sufficiency,” and called for work-requirements for work-capable households receiving rental assistance, as well as time-limits to benefits. Carson remained vague at his hearing about these policies, saying he saw the necessity of housing assistance to helping families move out of poverty, but also wanted to place “a little more time and effort developing the potential of our people.” Low-income housing advocates argue that such policy ideas are rooted in poor-shaming, disregard the fact that many people on rental assistance do work or are family caretakers, and argue that attaching such requirements to welfare in the 1990s did not eliminate, and in some cases worsened poverty.
5. Ending Subsidies for Rich Homeowners: Of the $200 billion* the federal government spends each year on housing aid, eight out of ten dollars goes to families earning more than $100,000 and four out of ten to families making more than $200,000. The biggest culprit for this regressive redistribution is the mortgage deduction tax program, which provides large tax breaks to wealthy homeowners. Housing advocates in the United for Homes Campaign seek revisions of the program that they say would shift the benefits of the tax credit to low-income homeowners while creating $241 billion in savings over the next ten years. There are signs that Republican lawmakers may be open to considering these reforms, but whether they will be willing to reinvest the savings in low-income housing programs is another question.
6. Reforming and Bolstering the Low Income Housing Tax Credit (LIHTC) program: This program, currently the federal government’s primary funding source for new affordable housing projects, allows local governments to sell tax credits to investors, generating funding for construction. Some low-income housing advocates like NLIHC and the affordable housing industry want to see an expansion of, and reforms to, the LIHTC program. Republicans have been friendly to LIHTC, and have worked with Democrats to introduce legislation that would expand the program. But Trump has also endorsed a House proposal to reduce the corporate tax rate from 30 percent to 15 percent, which could make investors less interested in buying tax credits and undermine the effectiveness of LIHTC.
7. Protecting Homeownership Opportunities: Freddie Mac and Fannie Mae are government-backed, for-profit private enterprises that buy mortgages and sell them to investors, which helps ensure a stable and ongoing supply of mortgage money for homeowners. During the mortgage crisis of 2008, the two giant enterprises nearly collapsed and were taken over by the federal government. Republicans, including several of Trump’s cabinet picks, argue that the government’s role in these enterprises places taxpayers at risk, and say that they should again be privatized to give other lenders the opportunity to compete with them. But a Wall Street Journal analysis suggests privatization would benefit Freddie and Fannie’s shareholders more than it would taxpayers, and some low-income housing advocates want to ensure privatization does not have negative impacts on homeowners and on the revenues of the housing trust fund. Carson has once again given mixed message on this front, saying he wants to lessen “government footprint” but also protect homeownership opportunities.
8. Saving At-Risk Homeowners from Private Equity: Following the 2008 mortgage crisis, HUD’s Federal Housing Administration, Freddie Mac and Fanny Mae began selling bundles of at-risk mortgages to hedge funds and private equity companies in an effort to bolster their hard-hit finances. But Right to the City and other advocates say that private buyers drive homeowners into foreclosure, then flip the properties to make a profit. (Private equity representatives dispute these claims, and HUD has made changes to the program in response to concerns.) Right to the City contends that these agencies should instead retain these homes as public assets or transfer them to community land trusts.
9. Bolstering Obama’s Local Hire Work: The Obama administration is in the process of revising the Section 3 rule, which requires local governments that take advantage of HUD funding to ensure 30 percent of workers are residents of HUD housing programs. It will be up to Carson to see through revisions to the rule, which would expand the requirements to more projects.
10. Ending Housing Discrimination Against Those with Convictions: HUD rules restrict people with criminal convictions from living in or even visiting public housing. Yet movements have been underway in many cities, including New York, to remove some of these restrictions. The Obama administration also released a draft rule last spring that forbids private property owners from throwing out a rental housing application simply on the basis of an applicant’s prior conviction. While criminal justice advocates hope to continue eliminating restrictive polices, Republican Speaker Paul Ryan has in the past opposed reform efforts.
Correction: Originally we said the federal government spends $200 million on housing aid. The actual amount is $200 billion.
By Abigail Savitch-Lew |