Category Archives: Section 8

Not so easy

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A key goal of affirmatively furthering fair housing (AFFH), as it’s envisioned playing out around the country, is to break up concentrations of poverty and to promote socioeconomic and racial integration. That means ensuring opportunities for lower-income people and racial minorities to live in wealthier, “high opportunity” neighborhoods with access to jobs, goods schools and public services.

Two ways to facilitate those opportunities:

  • Promote regional mobility among people with Section 8 vouchers, enabling them to leave high-poverty areas and move into more well-to-do communities. This can require increasing their housing allowance so that they can afford higher suburban rents.
  • Build affordable, multifamily rental housing in those same, heretofor exclusive neighborhoods.

Both of these approaches deserve consideration around here, as Vermonters contemplate how to make their communities more socioeconomically inclusive. Meanwhile, it’s interesting to see how they’ve played out in an entirely different environment: metropolitan Baltimore.Baltimore1

First, some background: Baltimore has a long history of racial segregation (click here for a trenchant account), and in the mid-1990s, the Department of Housing and Urban Development was sued by city residents (Thompson vs. HUD) for its failure to eliminate segregation in public housing. In 2005, a federal judge found that HUD had violated the Fair Housing Act by maintaining existing patterns of impoverishment and segregation in the city and by failing to achieve “significant desegregation” in the Baltimore region.

Seven years later, a court-approved settlement resolved the case in a way that anticipated the AFFH rule that HUD issued this past summer.

The settlement called on HUD to continue the Baltimore Mobility Program, begun in 2003 in an earlier settlement phase. The program has provided housing vouchers to more than 2,600 families to move out of poor, segregated neighborhoods and into areas with populations that are less than 10 percent impoverished and less than 30 percent black. The program provides counseling before and after the move and has received high marks from evaluators who cite improved educational and employment outcomes for beneficiaries. A similar regional program is underway in Chicago.

The settlement also called for affordable-housing development in these “high-opportunity” suburban communities – 300 units a year through 2020. To make this happen, HUD was to provide new financial incentives for developers.

Here is where the story takes a dispiriting turn. Three years later, not a single developer has applied for the incentives. No affordable housing projects are even in the pipeline. That’s according to an eye-opening story the other day in the Baltimore Sun.Baltimore2

So, what happened? Why haven’t developers shown any interest? HUD had no explanation, according to the story, which suggested that perhaps the program hadn’t been well-enough publicized: a prominent builder of affordable housing admitted he didn’t even know about the incentives. Could it be that they weren’t generous enough?

Whatever the reason, the Baltimore experience reflects how difficult it can be to introduce affordable housing to privileged enclaves. No one should underestimate the AFFH challenge.

Renters’ agenda

fair housing, housing, housing crisis, housing subsidies, housing vouchers, income inequality, mortgage-interest deduction, renters, Section 8, segregation, tax policy, tax reform, Vermont, , , , , ,

The Center for American Progress has put out a report that nicely ties together, in summary fashion, the current status of fair housing and unaffordable housing. These are the mainstay, overlapping concerns of the “Thriving Communities” campaign. If you’re looking for a fairly brief (33 pages) treatment of where things stand, complete with an array of federal policy recommendations, “An Opportunity Agenda for Renters” is worth a look. rent2

The report touches on many of the topics we’ve mentioned in this blog — the persistence of racial and socioeconomic segregation, the barriers to mobility from impoverished to high-opportunity areas, the growing financial burdens on the growing class of renters in the face of woefully insufficient public subsidies.

One of the policy recommendations, naturally, is that the primary federal vehicle for creating or preserving affordable housing be expanded. That’s the Low Income Housing Tax Credit, which accounts for about 110,000 residential units a year, according to the report. But even if that program were increased by 50 percent, as called for by the Bipartisan Policy Center’s Housing Commission, the total number of units created or preserved would still be way too few, considering “the current shortage of 4.5 million units that are affordable to extremely low-income households.”

As things stand, the federal tax code benefits homeowners in several ways, and disproportionately the wealthier ones. The mortgage-interest tax deduction alone costs the government about $70 billion a year. By contrast, increasing funding of the Section 8 program to cover 3 million eligible low-income renters who are shut out of the program now would cost just $22 billion.

Here’s another proposal in renters’ favor: creating a federal renters’ tax credit. A modest tax credit benefiting the lowest income renters could cost a mere $5 billion.

Vermont’s renter rebate is better than nothing, but it still doesn’t go very far. In 2012, according to a 2014 report to the Legislature, 13,541 claimants (about one-fifth of the state’s renting households) received a total of $8.7 million in rebates, for an average of $641. That $641 was not enough to unburden the typical claimant.

“On average,” the report stated, “Vermont’s renter rebate program reduces gross rent as a percent of household income from 36.7 percent to 33.6 percent.” rent1

In other words, the average renter was living in an unaffordable place even after the rebate.

 

Surprise! Some rents going down

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Burlington’s chronic housing-affordability problem is bad enough — more than a third of the city’s 9,500 renting households are paying more than half their income for rent and utilities, which puts them in the “severely burdened” category — but guess what? It’s getting arguably worse. burlingtonapt

HUD just came out with its 2016 fair market rents for the Burlington/South Burlington metro area, and they’re lower than they were for 2015. This despite the fact that actual rents in this area have been going up every year. (The 2016 numbers are up and down across the state, as Vermont Housing Finance Agency’s news blog helpfully details.)

If you really want to know why Burlington’s numbers went down, you can go to the HUD page to see the methodology. The unfortunate upshot, though, is that anyone with a Section 8 housing voucher is going to have less to choose from in 2016 than they do this year. That’s because apartments that cost more than the “fair market rent” are off-limits for subsidy. (If it makes you feel any better, remember that majority of Burlington’s “burdened” households don’t have vouchers anyway. Nationally HUD rental assistance extends to only about one-fourth of the people who are income-eligible.)

OK, let’s consider a two-bedroom apartment. The 2016 “fair market rent” is $1,172 (as compared to 2015’s $1,302). What are the offerings on Craigslist?

Here are the first 10 listed rents for two-bedroom apartments in Burlington and environs (South Burlington, Colchester) that we found at noon Monday. (Craigslist is constantly updated, so if you do the search the results will vary):

$2,500, $1,600, $2,500, $2,100, $1,425, $2,400, $2,025, $2,000, $2,000, $1,650.

How “fair” is that market? Now, perhaps Craiglist rents tend to be above average (are there studies that document this?), but there’s not much consolation in that, especially if you have a housing-choice voucher.