New USDA Minimum Rent Policy Would Hurt Nation’s Lowest Income Households

President Barack Obama’s budget request for Rural Development, within the U.S. Department of Agriculture (USDA), includes a new minimum rent policy for the program’s lowest income households. The National Low Income Housing Coalition (NLIHC) thinks this policy places an unfair and potentially harmful burden on some the nation’s poorest citizens. “In an effort to raise just $5 million for a $1.1 billion FY15 budget, the USDA is seeking permission from Congress to pick the pockets of the poorest of the poor,” said NLIHC President and CEO Sheila Crowley. “We oppose this request and hope that Congress does too.”   Today, all Rural Development residents living in Section 515 Rural Rental Housing and Section 514 and 516 Farm Labor Housing with USDA rental assistance pay 30% of their adjusted income for rent, the federal standard for affordability. Ninety percent of the 442,000 households in the Section 515 program pay more than $50 a month in rent. The mandatory minimum rent proposal would affect the other 10% of households whose incomes are so low that they currently pay less than $50 a month in rent. These households have adjusted annual incomes of less than $2,000.   In its budget documents, USDA says that the proposed minimum rent change “will encourage financial responsibility in tenants, increasing their opportunity for success on the path to homeownership.”   “The housing stability provided by USDA rental assistance for rural poor families, 60% of whom are elderly and 48% of whom include a person with a disability, prevents them from becoming homeless. It is nonsense to assert that making them pay more will help them become homeowners,” Ms. Crowley said.   Although the budget request claims the proposed USDA minimum rent policy mirrors HUD policy, HUD does not require a blanket $50 minimum rent. Rather, HUD has a $25 minimum monthly rent for households in Section 8 project-based buildings, and local public housing agencies (PHAs) can decide to have a $50 minimum rent for residents of public housing and those who receive housing choice vouchers. Today, 73% of PHAs charge a minimum rent of $50 a month.  Dr. Crowley is available for further comment.