Congress Should Increase HUD Funding in 2019 to Prevent Voucher Cuts, Help Children Escape Poverty
End Notes
[1] See the Appendix table for a full summary of the Center’s housing voucher funding recommendations for 2019.
[2] Michael Stegman and Dennis Shea, “Forging an Enduring Bipartisan Consensus on Affordable Rental Housing,” Bipartisan Policy Commission, February 2017, https://bipartisanpolicy.org/wp-content/uploads/2017/02/BPC-Housing-Rental-Housing.pdf.
[3] Housing vouchers and other federal rental assistance lifted 4 million people, including 1.3 million children, above the poverty line in 2015, using the federal government’s Supplemental Poverty Measure, corrected for underreporting of benefits. See “Chart Book: Economic Security and Health Insurance Programs Reduce Poverty and Provide Access to Needed Care,” Center on Budget and Policy Priorities, March 21, 2018, https://www.cbpp.org/research/poverty-and-inequality/chart-book-accomplishments-of-the-safety-net#part1.
[4] Research documenting housing vouchers’ wide range of benefits is gathered in Will Fischer, “Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children,” Center on Budget and Policy Priorities, October 7, 2015, https://www.cbpp.org/research/housing/research-shows-housing-vouchers- reduce-hardship-and-provide-platform-for-long-term.
[5] These figures are a weighted combination of the CPIs for residential rents (85 percent) and household fuels and utilities (15 percent), through December 2017. Average per-voucher subsidy costs have risen at a somewhat higher rate of 4.8 percent over the past 12 months. There are two reasons for this. First, incomes of seniors and people with disabilities — which are largely dependent on Social Security cost-of-living adjustments — have been rising much more slowly than rental costs (just 2 percent in 2018). Second, due to funding shortfalls caused by the across-the-board sequestration cuts in 2013, housing agencies restrained per-voucher subsidy costs from 2013 through 2015, even as market rental costs rose at a steady clip. Recent increases are likely due in part to agencies allowing subsidies to “return to market” to ensure that housing is affordable for families using vouchers.
[6] About half of voucher households are seniors or people with disabilities living on Social Security or other fixed income sources; the Congressional Budget Office estimates that the 2019 Social Security cost-of-living adjustment will be 2.3 percent. Over the past two years, the incomes of non-elderly, non-disabled voucher households have risen 4.4 percent per year, on average, and our estimate assumes this trend will continue in 2019. Overall, we thus estimate that voucher households’ incomes will rise about 3.4 percent, on average. If rents rise 3.2 percent, and voucher household incomes rise 3.4 percent, then voucher subsidies must rise 3.1 percent in 2019 to sustain current levels of affordability. (For instance, suppose a tenant contributes $300 towards a monthly rent of $900, and the resulting voucher subsidy is $600. In the next year, if the tenant’s contribution rises 3.4 percent to $310, and the rent rises 3.2 percent to $929, then the voucher subsidy rises 3.1 percent to $619.)
[7] A recent HUD study examined the rising rent burdens that voucher tenants have experienced since 2003, and concluded: “During an era when insufficient affordable housing is being built and affordable rental units are becoming more scarce, much of the housing cost burden faced by [Housing Choice Voucher] participants is attributable to renting units above local payment standards, combined with changes in income that do not keep pace with rising rents.” In other words, voucher subsidies have failed to keep pace with the growing gap between tenant incomes and market rents. HUD Office of Policy Development and Research, “Rent Burden in the Housing Choice Voucher Program,” October 2017, https://www.huduser.gov/portal/sites/default/files/pdf/Rent-Burden-HCV.pdf.
[8] The renewal costs of RAD component #2 vouchers, which are used to convert rental assistance contracts under the Rent Supplement and Rental Assistance Payment (RAP) programs to a voucher funding platform, are included in the costs associated with the first-time renewal of new tenant protection vouchers.
[9] Together, rental inflation and the increase in the number of assisted households will increase renewal costs by a total of 4.4 percent in 2019. The remainder of the increase (0.3 percent) in 2019 renewal funding eligibility is due to costs associated with certain other funding adjustments that Congress authorizes under the voucher renewal funding formula.
[10] Appropriations for voucher renewals totaled $16.34 billion in 2010, which is $21.51 billion in 2019 dollars, after adjusting for rent inflation using the CPI for residential rents. CPI data are currently available only through March 2018; to adjust to 2019 dollars, we assume the CPI will rise in 2018 and 2019 at its five-year average rate of 3.2 percent.
[11] See “Three Out of Four Low-Income At-Risk Renters Do Not Receive Federal Rental Assistance,” Center on Budget and Policy Priorities, updated August 2017, https://www.cbpp.org/three-out-of-four-low-income-at-risk-renters-do-not-receive-federal-rental-assistance.
[12] Ehren Dohler, “Veterans’ Homelessness Cut in Half Since 2010,” Center on Budget and Policy Priorities, November 8, 2016, https://www.cbpp.org/blog/veterans-homelessness-cut-in-half-since-2010.
[13] Barbara Sard and Douglas Rice, “Realizing the Housing Voucher Program’s Potential to Enable Families to Move to Better Neighborhoods,” Center on Budget and Policy Priorities, January 12, 2016, https://www.cbpp.org/sites/default/files/atoms/files/11-9-15hous.pdf.
[14] Will Fischer, “Research Shows Housing Vouchers Reduce Hardship and Provide Platform for Long-Term Gains Among Children,” Center on Budget and Policy Priorities, October 7, 2015, https://www.cbpp.org/research/housing/research-shows-housing-vouchers-reduce-hardship-and-provide-platform-for-long-term.
[15] This decline in the number of assisted families seems to reflect two factors: 1) some households have remained on rental assistance after their children have grown up or left home; and 2) recent federal decisions to target newly available vouchers primarily on homeless veterans and people with disabilities, combined in some cases with similar decisions by state and local housing agencies. See Alicia Mazzara, Barbara Sard, and Douglas Rice, “Rental Assistance to Families with Children at Lowest Point in Decade,” Center on Budget and Policy Priorities, updated October 18, 2016, https://www.cbpp.org/research/housing/rental-assistance-to-families-with-children-at-lowest-point-in-decade. On the share of eligible households receiving assistance, see “Three Out of Four Low-Income At-Risk Renters Do Not Receive Federal Rental Assistance.
[16] Barbara Sard, Mary K. Cunningham, and Robert Greenstein, “Helping Young Children Move out of Poverty by Creating a New Type of Rental Voucher,” U.S. Partnership on Mobility from Poverty, February 2018, https://www.mobilitypartnership.org/helping-young-children-move-out-poverty-creating-new-type-rental-voucher.
[17] The Center also recommends that up to $20 million of tenant protection voucher funding be set aside to provide vouchers to HUD-assisted tenants who request relocation due to domestic violence. HUD is required under the Violence Against Women Act of 2013 to help at-risk tenants to relocate. The tenant protection account is suitable for this purpose, because demand for such vouchers is likely to be irregular and vary greatly by agency.
[18] In 2014, 13 percent of families with children used housing vouchers to live in a low-poverty area, while 15 percent of families (including 343,000 children) using vouchers lived in extremely poor neighborhoods. See Sard and Rice, 2016, Table A-1.
[19] Barbara Sard, “Testimony Before the House Financial Services Subcommittee on Housing and Insurance: Housing Choice Voucher Program: Oversight and Review of Legislative Proposals,” April 17, 2018. Testimony and other hearing materials are available here: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=403294.
[20] Abt Associates, “Interim Cost-Benefit Analysis of the Compass Family Self-Sufficiency (FSS) Program,” December 2017, http://abtassociates.com/AbtAssociates/files/7f/7fc01ba7-24af-47fb-91e1-5ea255c4ad72.pdf. HUD is expected to release the results of a random control study of FSS programs later in 2018.
[21] The House (H.R. 4258) and Senate (S. 2155) have approved legislation that would make improvements in the FSS program, as well as make permanent the expansion of FSS to PBRA recipients.
[22] For more on President Trump’s proposals, see “Housing Program Cuts Under President Trump’s Budget,” Center on Budget and Policy Priorities, https://www.cbpp.org/housing-program-cuts-under-president-trumps-budget.