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Congress Should Balance Vouchers and Development of Less-Expensive Housing in Recovery Legislation

October 14, 2021: This post has been updated.

As policymakers continue to craft economic recovery legislation, press reports have suggested that critical investments in housing may be scaled back, and there are concerns that the final package may end up tilted heavily toward increasing housing supply. There’s a role for supply investments, but a strategy where that’s most or all of the housing investment will result in housing that is unaffordable to households with the greatest housing needs, jeopardizing the promise of making real progress against homelessness and housing instability. A significant investment in rental assistance as part of the recovery legislation through an expansion of Housing Choice Vouchers is necessary for getting help to those who need it most.

More than 580,000 people were living in shelters and on the streets in January 2020. And for more than 24 million people in low-income renter households — 62 percent of whom are people of color — who paid more than half of their income for housing, it can be a monthly struggle to pay their rent and hold onto their homes.

Homelessness and unaffordable rent burdens destabilize households, shortchange children’s futures, and can result in serious health and nutrition hardships as households use so much of their limited resources to maintain their housing. Homelessness and unaffordable rent are also problems that disproportionately affect Black and Latino households due to a long history of racism and other forms of discrimination that have led to unequal housing, education, employment, and health care.

Even though the Build Back Better package is likely to be scaled back in current negotiations, targeted and balanced investments in rental assistance and in the supply of less-expensive housing — including an expansion of the Housing Choice Voucher program — will make it more possible for low-income families with children, people with disabilities, seniors, and households experiencing homelessness to access stable housing. This approach will also help address racial disparities in housing assistance.

The package should also fund urgently needed renovations in existing public housing, which would improve poor or deteriorating housing conditions that expose many low-income residents to unsafe or unhealthy conditions (although they would generally not address the large unmet need for rental assistance among people who are homeless or struggling to afford housing).

The package now pending in the House would expand housing supply through the National Housing Trust Fund, HOME Investment Partnership, and the Low-Income Housing Tax Credit, among other investments. Increasing the supply of less-expensive housing is critical to address shortages in some communities (among supply programs, the National Housing Trust Fund should be the top priority because it has the lowest rents and income-eligibility limits). But investing in supply without also including the package’s significant rental assistance would be a mistake. Most supply investments don’t make housing actually affordable to households with incomes around or below the poverty line unless the household also receives a voucher or other similar ongoing rental assistance.

One reason supply investments alone are rarely enough to enable the lowest-income households to afford housing is that these households typically can’t afford rent set high enough for an owner to cover the ongoing costs of operating and managing housing. Consequently, even if development subsidies pay for the full construction cost, rents in the new units will generally be too high for lower-income families to afford them without the help a voucher can provide. Moreover, many communities have an ample supply of reasonably priced housing, but it remains out of reach for very low-income households. Investing primarily in supply in these communities misdiagnoses the problem.

New vouchers would make housing affordable to the lowest-income households both in units built with the bill’s investments in housing supply and in other units that families choose in the private market. The voucher program uses virtually every dollar of funding it receives, but because of funding limitations only 1 of every 4 households who are eligible for a voucher receive one, and those who do receive them often wait years.

Long waitlists for housing assistance — and closed waitlists in many communities — make clear that need far outstrips available resources. And those hard-hit by the lack of rental assistance are disproportionately people of color. As we explained last week, for the 20 housing agencies that report these data, Black households are disproportionately represented on waitlists and in many cases are the majority.

As Matthew Desmond recently wrote in the New York Times, “In this precious, perhaps once-in-a-generation moment of social transformation, investing in affordable housing isn’t only necessary to prevent evictions and end homelessness. It is also essential because the success of all other opportunity-expanding initiatives depends on it.” Strong evidence tells us that having a safe, affordable place to call home is a social determinant of health. The positive impacts of investments in health care and education for children, for instance, are amplified when a child has a safe and stable place to sleep. Housing Choice Vouchers are proven to help decrease domestic violence, homelessness, and overcrowding. When rental assistance helps older adults and people with disabilities afford accessible homes in the community, they can avoid or leave expensive and sometimes dangerous institutional settings.

Under the approach taken in the House legislation, vouchers would help people with incomes around or below the poverty line — including low-wage workers and the lowest-income seniors and people with disabilities — afford housing in every state and in urban, suburban, and rural areas.

Further, the current proposal for Housing Choice Vouchers in the Build Back Better Act includes a set-aside for people experiencing or at risk of homelessness — the only housing resource dedicated to this group included in the package. While the current proposed levels won’t end homelessness, this type of investment could make substantial progress toward achieving that ultimate goal.

To further racial equity and ensure that historically marginalized people have access to homes — the kind of homes that provide safety and comfort for families and individuals who need assistance the most — affordable housing must be included in Build Back Better, and the approach must balance the need for additional supply with affordability through an expansion of Housing Choice Vouchers.