by Western Regional Advocacy Project
When is a housing subsidy not a housing subsidy? When it subsidizes homeownership.
When is a housing subsidy economic stimulus and not charity? When the money supports bankers, real estate agents and developers.
In 2017, the federal government subsidized homeownership to the tune of $140.7 billion dollars. It is estimated that 75 percent of this allocation went to households earning over $100,000.
In 2017, the federal government subsidized rental assistance housing to the tune of $46 billion dollars, all of which went to households poor enough to “qualify” for this assistance.
Guess which of these two housing assistance programs of the federal government are being proposed for massive cuts in 2018. We’ll give you one hint: bankers and real estate agents are not freaking out!
By some estimates, Trump’s proposed HUD budget will lose over $7.5 billion dollars in funding when all 2017 funding allocations are tabulated at the end of the year, or it could be $6.4 billion based on other calculations.
Either way, the reality is that upwards of 250,000 households will almost certainly lose their housing support, that the 10,000 units of public housing lost each year due to lack of maintenance will dramatically increase and that Community Development Block Grants, HOME, and other programs serving poor communities will be eliminated.
Nor is there any disputing that 133 million dollars will be cut from Homeless Assistance programs or that rents will increase from 30 percent to 35 percent of a person’s income, and that $60 million will be cut in Rural Housing rental assistance, as well as the elimination of farmworker housing loans and grants.
All this pain and suffering so that HUD’s budget can be reduced to $40.7 billion while homeowner housing subsidies are expected to rise to $162.5 billion.
What is the difference between a homeowner subsidy and a renter subsidy, you may wonder. Not much in terms of a fiscal impact on the federal budget, but very different in terms of administration.
Homeowner subsidies are administered by the IRS and are allocated to homeowners via tax breaks; renter subsidies are administered by HUD and are paid out to property owners or public housing authorities.
Two different programs with very, very different sets of protocols, rules, and qualifications, but both are equally housing assistance programs and both cost the federal government money equally.
If you owe me $50.00 and I tell you to keep it (IRS), I just gave you $50.00, If you ask me for $50.00 and I give you $50.00 (HUD/USDA), it costs me $50.00. That’s economics 101, simple.
So why is it that one type of housing assistance has no cap on costs, has no eligibility requirements except being in debt with a mortgage, and isn’t considered charity? Instead, it is seen as economic stimulus and good and healthy for America’s economy.
On the other hand, the much, much smaller renter housing assistance program has a byzantine screening process, has thousands and thousands of households on its waiting list, is hotly debated each year, and is consistently cut as part of the federal budget process.
Because it is categorized as charity to the poor rather than economic stimulus, and certainly is not considered good or healthy for America’s economy.
Since housing is a good and healthy thing for homeowners, it only makes sense that it would be a good and healthy thing for renters.
Since money owed and not collected is the same as money expended, then surely both forms of housing support are of equal value and both have a financial impact on our federal budget.
So what could possibly be the justification for there to be such a growing disparity between the two programs?
The only logical conclusion one can reach when these two programs are seen as being of equal benefit, is that who is benefiting from each of these programs dictates their worth.
In the cold-ass reality of neo-liberal American economic policies, what benefits bankers, real estate and developers far outweighs what benefits poor people and communities.
If “WE” can afford 140 billion dollars to support housing for homeowners, the argument that “WE” cannot afford 140 billion dollars to support renters seems shallow, and frankly, it sounds like bullshit.
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The Human Impact of Cuts to HUD’s 2018 Budget
WRAP produced this fact sheet to provide a historical understanding of how proposed HUD budget cuts of 2018 have a direct link to a 38-year-cycle of draconian cuts to our nation’s affordable housing programs. These cuts have a direct correlation to the creation of contemporary homelessness and the housing shortage impacting most major cities across the United States.
A half-billion or even a billion-dollar cut here and there may not sound so severe when looked at in isolation, given the size of the overall budget. However, when we view these cuts in the history of federal neglect towards affordable housing, we can better understand the current crisis of homelessness.
Until we recognize housing as a human right and enact policies and budget allocations that reflect that right, along with quality education, economic security, and health care, we will not end homelessness. So WRAP is calling on the federal government to: 1) Restore federal affordable housing funding to comparable 1978 levels; 2) Turn empty buildings into housing; 3) Improve living conditions in existing affordable housing; 4) Put moratorium on demolitions without replacement and right of return; 5) Stop criminalizing poverty and homelessness.
History of Slashing HUD Budget
1978 to 1983: HUD budget authority shrank from $83 billion to a little more than $18 billion (in 2004 constant dollars) and shelters opened throughout the United States.
1995 to 2011: HUD dismantled 290,588 units of public housing and 360,000 Section 8 units. A total of 650,588 units lost. In March 2012, another 7,107 units were approved for demolition/disposition.
1996 to 2017: HUD funding for new public housing units — the safety net for the poorest among us — has been zero since 1996.
2010 to 2016: HUD housing and community development funding fell $4.6 billion, or 8.7 percent, since 2010 (adjusted for inflation).
2017: Homeowner tax breaks cost the U.S. Treasury approximately $140.7 billion, with 75% of this expenditure benefiting homeowners earning more than $100,000 a year. Total funding in all federal low-income housing assistance programs was $46 billion — a difference of $94 billion.
2018 cuts to HUD budget (proposed May 23, 2017)
HUD Programs: Proposed: $40.7 billion budget for all HUD programs, $6.2 billion (13 percent) below 2016 funding, about $7.5 billion (15 percent) below 2017 levels.
Proposed $4.1 billion cuts of program funds which eliminates the HOME, Community Development Block Grant (CDBG), and Choice Neighborhoods, three of the four HUD programs directing flexible aid to poor communities.
Homeless Assistance Grants: $133 million in cuts to homeless shelter, services and housing programs.
Public Housing: Public housing funding slashed by $2 billion, or about 30 percent. Public housing currently requires more than $30 billion in repairs and it is estimated 10,000 units a year are lost to maintenance issues.
Housing Vouchers and Subsidies: 250,000 households will lose rental assistance. Housing vouchers are proposed an allotment of $19.3 billion which is $300 million below the 2016 funding level and $1.7 billion below the amount required to renew all currently issued vouchers in 2018. Minimum rents would rise from 30% to 35% of a person’s income. Eliminates funding for VASH Vouchers, a $40 million cut from FY17.
USDA Rural Housing: 60 million cut to rental assistance in rural housing programs. Eliminates farm worker housing loans/grants and housing repair loans.