Bipartisan Housing Commission Cites MID Reform as Way to Provide Housing Aid to Neediest Americans

The Bipartisan Policy Center’s Bipartisan Housing Commission released its report on the future of federal housing policy on February 25. Of great importance to advocates for low income rental housing is the call for rent assistance for all extremely low income households (30% AMI or less). No details are offered about how a program of guaranteed rent assistance would be structured.The commission is clear, however, that the lottery system of distributing rent assistance that means only one in four eligible households receives housing help is wrong and must end. For households with incomes between 31% and 80% of AMI, the commission recommends a program of short-term emergency rental assistance to help families through financial crises and prevent them from becoming homeless.The commission suggests that the increased cost for providing such assistance should come from reform of the mortgage interest deduction. Specifically, the “commission recommends consideration of further modifications to federal tax incentives for homeownership to allow for an increase in the level of support provided to affordable rental housing.” Thus, the commission takes the same position as the National Housing Trust Fund Campaign that if there are to be changes to the mortgage interest deduction, the savings should be used for housing for the lowest income people.The commission affirmed support for funding the National Housing Trust Fund in the context of replacing Fannie Mae and Freddie Mac. The commission “recommends retaining in a reformed housing finance system the fee adopted by Congress in the Housing and Economic Recovery of 2008 (HERA)…. Revenue generated should be used to fund the National Housing Trust Fund and the Capital Magnet Fund.” Among the other recommendations for affordable rental housing are doubling the Low Income Housing Tax Credit, increasing HOME by $1-$2 billion, and spending $4 billion a year in the capital needs of public housing. The commission also calls for outcome-based measures of evaluation for public and assisted housing, with expanded deregulation for high performers and replacement of poor performers with high performing agencies selected through a competitive process.While most of the report deals with homeownership and the role of the federal government in housing finance, the content on affordable rental housing documents the acute shortage of affordable housing for the lowest income people and the imbalance between federal housing subsidies that support home ownership for higher income people and those that fund rental housing for the very poor. The 21-member commission, c0-chaired by former HUD Secretary Henry Cisneros, former HUD Secretary and U.S. Senator Mel Martinez (R-FL), and former Senators Christopher Bond (R-MO) and George Mitchell (D-ME), was established by the Bipartisan Policy Center in 2011 to “help set a new direction for federal housing policy” in the wake of the collapse of the U.S. housing market. The commission’s work was funded by the John D. and Catherine T. MacArthur Foundation.Click here to read the full report.