BEYOND THE NUMBERS
President Trump’s budget would raise rents in fiscal year 2018 on up to 4 million low-income households that receive federal rental assistance. Strikingly, it defends these higher rents for poor families, seniors, and people with disabilities struggling to keep a roof over their heads by claiming that they’re needed to reduce federal costs, even as it proposes trillions of dollars in tax cuts for the wealthy and profitable corporations.
The budget proposes several types of rent increases:
- It would let the Department of Housing and Urban Development (HUD) require state and local housing agencies and private owners of subsidized housing to: (a) raise rents from 30 percent of a family’s income to 35 percent, and (b) eliminate deductions from these rent calculations for factors that reduce a household’s ability to pay rent, such as high medical or child-related expenses. (HUD says it only plans to use this authority to raise rents in some rental assistance programs: Project-Based Rental Assistance and two smaller programs targeting the elderly and people with disabilities. But the proposed authority would also cover Housing Choice Vouchers and public housing, which suggests that HUD is considering rent increases there as well.)
- It would require housing agencies and owners to charge the lowest-income families minimum rents of $50 a month even if this is more than 30 percent (or 35 percent) of their income, and it would prohibit payments to help the poorest families pay utility bills.
- It would let HUD allow or require virtually any change to rent rules for the housing voucher program, including unlimited rent increases.
Taken together, these proposals would let HUD raise rents on 4 million low-income families by an average of $85 a month (not counting the unspecified voucher rent changes). In its current form, rental assistance is very effective at reducing poverty, homelessness, and housing instability, research shows. Higher rents would undermine these benefits by forcing families to divert resources from basic needs such as food or medicine and placing families at risk of eviction if they can’t make the required payments.
The changes to minimum rents and utility payments would pose particular challenges. Almost all of the roughly 500,000 families they would affect have incomes below half the poverty line, so they have little ability to cope with higher housing costs. These families, which include over 800,000 children, could be eligible for hardship exemptions from these changes, but experience shows that exemption policies protect few families. That’s partly because they require tenants — who may have physical or mental disabilities or very little education — to seek an exemption.
The Administration describes the proposals as “reforms,” but they make little sense on policy grounds. The budget touts them as empowering local decision-makers even though the minimum rent requirement would reduce local flexibility. And it claims they would boost self-sufficiency even though charging families 35 percent of their income would, if anything, discourage work by raising rents more rapidly as earnings grow. The proposals would sweep aside careful, substantial rent reforms that Congress passed unanimously, and President Obama signed into law, just last year. They would also move in front of a rigorous, ongoing HUD evaluation of rent policy options that the department expects to complete in 2019.
The proposals’ main purpose seems to be to generate added rent payments to offset the budget’s proposed cuts in rental assistance funding. In practice, the added rents would likely cover only a fraction of the cuts, partly due to the administrative difficulty of rapidly raising rents on so many families. Regardless, there are surely better ways to find resources to avoid harmful cuts in programs such as vouchers and public housing than to squeeze higher rents from some of the nation’s poorest families.