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A Bipartisan Call for More Help for Low-Income Renters

The Bipartisan Policy Center’s (BPC) Housing Commission called this week for expanding federal rental assistance to help all of the lowest-income households who need it.  We agree, because there’s more need for assistance than ever.

The number of unassisted renters who earned less than 50 percent of median income and paid more than half of their income for housing or lived in severely substandard homes rose to 8.5 million households in 2011 — a 43 percent jump since 2007 — the U.S. Department of Housing and Urban Development (HUD) has reported (see chart).  Funding limitations keep most eligible families from receiving rental assistance.


The BPC commission’s main rental assistance proposal would more than double the number of families receiving assistance through the Section 8 housing voucher program.  New vouchers would go to the neediest families, with the goals of ending waiting lists for housing assistance for poor families and sharply reducing homelessness.

Vouchers are the nation’s most effective form of rental assistance, and the program merits expansion.  But the 2011 Budget Control Act’s tight ten-year discretionary spending limit will make it unlikely that Congress will fund more vouchers in the near term.  Indeed, as we’ve noted, the automatic budget cuts (“sequestration”) scheduled for this Friday would likely mean more than 100,000 fewer vouchers in use.

A new federal tax credit also could help more low-income renters afford housing, as we’ve proposed and the BPC commission highlights.  The commission’s report notes that the credit “could help increase the ability of low-income households to pay prevailing rents in high-opportunity neighborhoods, as well as help stimulate production and preservation of affordable rental housing for low-income households and reduce homelessness.”  A renters’ credit could be funded using a portion of the savings from scaling back tax subsidies for higher-income homeowners.  We estimate that $5 billion in annual credits could ease rent burdens substantially for 1.2 million low-income families.

As the BPC report points out, families paying very high shares of their income for rent and utilities “often have insufficient income available to meet their basic needs for food, health care, education, and transportation — undermining child and adult health and contributing to residential instability that can, among other things, impair educational achievement and employment potential.”  Making housing more affordable for those families should be a top priority of the nation’s housing policy.