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Proposed Cuts to Public Housing Would Prove Harmful and Costly

September 16, 2011 at 3:36 PM

The federal government has a long history of underfunding public housing, and the $1.4 billion funding cut that a House Appropriations subcommittee approved last week would make a bad situation worse, exposing families to deteriorating living conditions, greater risk of safety hazards, and possible displacement from their homes, as our new report explains.

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The 1.1 million households in public housing consist mostly of elderly individuals, people with disabilities, and working poor families.  The proposed cut runs counter to the principle, laid out by the Bowles-Simpson fiscal commission, that Congress shouldn’t place the burden of deficit reduction on vulnerable low-income people.  Worse, it places a disproportionate burden on low-income people by cutting public housing funding by 20 percent, about four times as much as the cut that this year’s Budget Control Act requires in overall non-security discretionary funding for 2012.

Public housing capital funding, which covers major repairs and renovations, has seriously eroded over the past decade (see graph); under the subcommittee bill, it would fall to just 40 percent of its 2001 level, adjusted for inflation.  This amount would cover less than half of the repair and renovation needs estimated to accumulate in public housing each year, and would fail completely to address the estimated $26 billion backlog of unmet needs.

In addition, the cuts in the bill would likely raise future costs to federal and local governments by delaying repairs that would prevent more costly damage down the road (such as fixing a leaking roof), deferring energy efficiency improvements, and making it more costly for local housing agencies to issue bonds or take out loans to finance public housing renovation.

Congress should restore capital funding to last year’s level and ease the bill’s other cuts in public housing.  Also, to help address the backlog of repair and renovation needs, Congress should enact HUD’s proposed Rental Assistance Demonstration (RAD).  As our report on the proposal (then called Transforming Rental Assistance) explains, RAD would give housing agencies more adequate and reliable funding and make it easier for them to obtain private investment to support renovation projects.

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