Senior Policy Analyst
Plans from President Trump and House Financial Services Housing and Insurance Subcommittee Vice Chairman Dennis Ross would significantly raise rents on low-income people with federal rental assistance. The plans would work differently: the Trump plan requires specific rent increases on nearly all Department of Housing and Urban Development (HUD) rental assistance recipients, while the Ross plan (released as a draft bill) leaves some increases for state and local housing agencies to decide and is largely limited to two major HUD programs: Housing Choice Vouchers and public housing. But both proposals would have many of the same harmful effects (see table).
The Trump plan would raise rents by $3.2 billion a year once it’s phased in, while the Ross plan would allow annual increases of as much as $4.9 billion. New CBPP estimates show the impact of the Trump and Ross plans in each state and the 100 largest metropolitan areas.
Raising rents on low-income people would force them to divert resources from other basic needs and expose some to eviction and homelessness. Most of those affected would be working-poor families with children, seniors, and people with disabilities. Both plans also include sharp rent increases for families with little or no income and, as such, would fall most heavily on deeply poor families with children.
The plans could have other adverse consequences as well. The Ross bill would give the 3,800 state and local agencies that administer public housing and vouchers broad discretion to set their own rent rules, and the Trump plan would let HUD provide similar flexibility to those agencies and to thousands of private owners of housing subsidized through other programs. As result, both plans could create a complex patchwork of rent rules that vary from one development or community to another. This would make it very hard for HUD to provide the oversight needed to ensure that rents are calculated properly and taxpayer funds aren’t misused.
In addition, local rent rules could create a new barrier to voucher holders who want to move to high-opportunity neighborhoods with low poverty and strong schools, since the new maze of different rent rules would make it harder for families to understand what their rent obligations are in different communities and decide where they could afford to live. Research shows that moving to low-poverty neighborhoods with a voucher can substantially increase children’s chances of attending college and their earnings as adults.
The plans would also lay the groundwork for sharp cuts in rental assistance funding. The President’s 2019 budget proposed to cut rental assistance funding by more than $6 billion below the 2018 level and argued that the revenues from the rent increases will offset some of those funding cuts (although, in practice, the rent increases could not be implemented quickly enough to reduce program costs significantly in 2019). Similarly, if the Ross bill were enacted, proponents of funding cuts would likely claim that the bill makes it possible to cut funding sharply without forcing agencies to help fewer families or reduce public housing maintenance and repairs, since the bill would let housing agencies shift billions of dollars in costs to low-income families by charging them higher rents.
Policymakers should set aside these harmful proposals, which would undercut federal rental assistance and impose hardship on some of the nation’s most vulnerable people.