On December 15, the Center for Budget and Policy Priorities (CBPP) issued a report, “Options for Jobs Legislation: Providing $1 Billion to Prevent Homelessness,” that uses the example of the Homeless Prevention and Rapid Re-housing Program (HPRP) to describe the stimulative effect that rental assistance has on the economy.
HPRP, created under the American Recovery and Reinvestment Act (ARRA) and administered by HUD, provides short-term rental assistance and services to stabilize households at risk of homelessness and to establish new tenancies for households that are currently homeless. HPRP was funded at $1.5 billion and is anticipated to help 300,000 households; CBPP’s report calls for an additional $1 billion to assist an additional 200,000 households within a Congressional “jobs bill.” Such funds were not included in the jobs bill that passed the House on December 16 (see related article elsewhere in Memo).
In addition to assisting families in need, the report estimates that HPRP funds will impact the economy by reducing vacancies and boosting consumer spending. For every 200,000 families securing rental housing, CBPP anticipates a 0.5 percent potential decrease in the national vacancy rate, noting that reducing vacancies provides incomes for property owners who have moderate or low incomes and who may be struggling to keep current on mortgage payments. Other effects of reduced vacancies include avoiding unused property deteriorating, displacement of tenants, and general neighborhood deterioration.
The report notes that providing rental assistance to low income households—whether through HPRP or another program—generates similar economic demand to that of providing food stamps or unemployment benefits. For every dollar spent on rental assistance, CBPP estimates that $1.50 -$2.00 will be generated in economic demand. According to the Congressional Budget Office, low income households are more likely to spend additional income secured through subsidy than to save it which translates into demand.
View CBPP’s report at: http://www.cbpp.org/files/12-15-09hous.pdf.