The House Financial Services Subcommittee on Housing and Insurance held a hearing on September 21 to explore ways to make the housing voucher program more efficient and to increase upward economic mobility. Speaker Paul Ryan (R-WI) and the GOP anti-poverty task force had previously identified the need to enhance the portability of housing assistance vouchers and reform the “fragmented” system of thousands of public housing agencies (PHAs) “to encourage recipients to move to areas with more affordable housing, education, or job opportunities.” Witnesses offered a variety of proposals, including encouraging public housing agencies to form consortia, applying small area fair market rents, and deregulation.
Representative Keith Ellison (D-MN) said that addressing the affordable housing crisis is one of the most important things Congress should be doing right now. Mr. Ellison pointed to statistics showing that the majority of low income renters spend more than half of their income on housing. He said that while he supports proposals to make programs more efficient, doing so will not address the fact that there simply is not enough affordable housing. “Do you know how much the mortgage interest deduction program costs? Seventy billion dollars. Do you know how much HUD’s total budget is? A lot less. We spend over $100 billion on middle and upper income people, giving them government money for housing. But we don’t do nearly as much for people who desperately need housing and don’t have the same level of support.”
Barbara Sard of the Center on Budget and Policy Priorities discussed how living in low-poverty neighborhoods helps families increase their earnings and climb the economic ladder to prosperity. But because the system of PHAs is so fragmented, she said, families with vouchers are largely unable to access areas of opportunity. More than 1,500 PHAs administer vouchers in metropolitan areas. Typically, one agency administers the voucher program in the central city and other PHAs serve the surrounding suburban communities. Ms. Sard said that because of this fragmentation, families are less likely to get useful information about opportunities in other communities and are more likely to have trouble using their vouchers when trying to move to another PHA’s jurisdiction. She also explained that fragmentation increases administrative and oversight costs.
Ms. Sard recommended that PHAs be encouraged to consolidate or form regional consortia to administer the voucher program. She also urged Congress to fund a voucher mobility demonstration proposed by the Obama Administration and included in the Senate’s FY17 Transportation-HUD spending bill.
Deborah Thrope of the National Housing Law Project explained that, even after some families receive vouchers and try to move to areas of opportunity, they often end up moving back to low-poverty neighborhoods. They often lose their vouchers when they are unable to find a landlord willing to rent to them. “In many places, the value of the voucher does not reflect market rents, making it difficult if not impossible for families to find a place they can afford.” Ms. Thrope recommended that HUD use small area fair market rents (SAFMRs) that better reflect market rents in high-cost neighborhoods to determine the value of vouchers. She added that protections should be put in place to protect current voucher holders who could be negatively impacted by SAFMRs.
Both Ms. Sard and Ms. Thrope spoke against a proposal to deregulate small PHAs. The “Small Public Housing Agency Opportunity Act of 2016” (H.R. 4816), introduced by Representative Steve Palazzo (R-MS), would eliminate important safeguards for tenants and likely have the unintended consequence of increasing costs to the government.
NLIHC also urged the Subcommittee to reject H.R. 4816 in a written statement for the record. “The bill needlessly complicates program administration and diminishes federal oversight by creating special rules for small agencies, counter to this Committee’s goals and prior legislative efforts. NLIHC appreciates the Subcommittee’s recent bipartisan work to pass H.R. 3700, the “Housing Opportunity through Modernization Act,” which promises to streamline administrative burdens for all PHAs, regardless of size, when it is fully implemented.”
NLIHC also offered several policy recommendations, including:
- Consolidating PHAs’ administration of vouchers;
- Funding the voucher mobility demonstration proposed by the Obama Administration;
- Encouraging HUD to adopt SAFRMs and change its rescreening policies for voucher holders;
- Ensuring federal resources are directed towards producing deeply affordable housing in all communities; and
- Increasing needed investments in affordable housing for the poor by reforming the mortgage interest deduction.
Watch the archived webcast and read witness testimony at: http://bit.ly/2cqqqv6
Read NLIHC’s statement for the record at: http://bit.ly/2cwNtl2