The True “American Carnage:” Trump’s HUD Budget

 In Policy, Policy Blog

by Eva Rosen & Philip Garboden

President Trump’s proposed budget for fiscal year 2018 slashes up to $6 billion from the Department of Housing and Urban Development. For those of us who have spent years debating the pros and cons of HUD programs, the across-the-board cuts seem surprisingly non-ideological, save for the top-level goals of smaller government and a weaker safety net. The proposed cuts will affect both sides of one of the most passionate housing policy debates: public housing and voucher programs designed to replace public housing.

There is still uncertainty and even fewer details as to the size and scope of the proposed cuts as Congress has yet to weigh in. But taken at face value, the President’s proposal is likely to be devastating for the many Americans already struggling to afford housing. This moment of uncertainty provides an opportunity to step back from the sometimes-vitriolic debate over policy alternatives to consider a more fundamental issue: the dire and ever increasing need for subsidized housing of any kind.

The Affordability Crisis

Trump’s proposed cuts come at a time when cities are experiencing a crisis of affordability. Housing today is often simply too expensive for people to afford. In Baltimore for example, 57 percent of all renters are “rent burdened,” meaning that they pay over 30 percent of their income in rent. Sending so much of your earnings to your landlord means having less money to spend on essentials like food, transportation, and childcare.

This problem is not limited to the poor. While individuals below the poverty line have struggled for decades to afford their housing, more and more working and middle class renters are also becoming burdened. For example, in 1998, 44 percent of Baltimore renters earning between $20,000 and $40,000 per year were rent burdened. By 2013, this number had jumped to over 70 percent. While researchers disagree on whether rents have outpaced income or incomes have lagged behind rents, the reality is that Trump’s cuts are being proposed at a time when the need for housing assistance is the highest it’s been for decades.

Public Housing and Housing Vouchers

No matter what else they do or do not accomplish, two of the biggest housing assistance programs in the U.S.—public housing and vouchers—directly and tangibly address the affordability crisis for poor renters fortunate enough to receive them.

Public housing was created with the intent to alleviate slum conditions of overcrowding and hazardous housing. But by the 1990s, much of it was falling apart due to a lack of funding and poor maintenance. Troubled developments became notorious for concentrating poor families in segregated, disadvantaged neighborhoods with high unemployment, high crime, and failing schools.

In the 1990s, HUD began shifting away from the high-rise towers of public housing to housing vouchers, also known as Section 8, where families pay 30 percent of their income in rent and use their voucher in any affordable unit in the private market. While in the late 1980s Baltimore had 18,000 units of public housing, today there are just 10,000. During the same period, the number of vouchers has gone from 4,000 to 14,000.

Nonetheless, public housing is an essential component of the subsidized housing stock. Properly designed, appropriately sited, professionally managed, and adequately funded public housing can succeed, particularly for the elderly and those with disabilities for whom market-based solutions are few and far between. Even in less-than-ideal circumstances, the housing stability and income security provided by public housing can have incredibly positive effects when the alternative is a life of residential instability and eviction.

Vouchers can be an essential tool to help families move out of distressed neighborhoods and into those with good schools near higher paying jobs. We know that those who are lucky enough to receive aid see tremendous benefits. For one, vouchers decrease homelessness. One man who we got to know in the course of our research, a 55-year-old man with HIV, finally got off the voucher waiting list and now has a safe place to live instead of taking shelter under a bridge. A woman who we met got a voucher, moved into a stable home, and was able to regain custody of her children. Other families report simply being able to put food on the table and make healthier meals. And vouchers can help families move to better neighborhoods where there are good schools for their children, and increased job opportunities. We know that the neighborhood a person lives in has profound effects on their education, employment, and lifetime earnings.

But neither form of housing assistance comes close to meeting the demand – only about one in four qualified renters actually benefits from a housing subsidy nationwide. Analyses suggest that the proposed cuts in the Trump budget plan would slash funding for public housing by 30 percent, meaning huge reductions in maintenance budgets. Here in Baltimore, the legacy of previous budget cuts has resulted in a public housing stock plagued with maintenance backlogs, cockroach and bedbug infestations, rampant rodent problems, mold, lead paint, and broken elevators that leave elderly and disabled residents with long waits just to get down the stairs to go to the grocery store or the doctor. Cutting budgets for routine maintenance ends up costing more in the long run. But even more importantly, these problems pose real health dangers for residents. There is a certain cruelty in cutting maintenance funds for a program that houses some of the country’s most vulnerable citizens. Public housing is a program that experts agree is desperately in need of more money for maintenance, not less.

When it comes to cutting vouchers, estimates suggest that as many as 200,000 voucher households could lose their subsidies under Trump’s proposal. Recipients of housing vouchers are a vulnerable population too, facing severe adversity: 43 percent have children, 28 percent have a disability, and 87 percent have incomes under $20,000 a year.

We can’t keep doing more with less

Given these vulnerabilities, any cuts that reduce the number of subsidized units are likely to produce spikes in homelessness. We now have clear evidence that homelessness is above all a problem of affordability and that giving families housing vouchers successfully keeps them off the streets.

Homelessness has declined nationally about 15 percent in recent years, from around 650,000 homeless people on a given night in 2007 to 550,000 in 2016. This reduction is remarkable given the housing collapse during this time period. This positive trend is attributed in part to a rapid re-housing and permanent supportive housing strategy adopted by the Obama Administration, which included increased funding for homelessness assistance for vulnerable populations.

Trump’s cuts risk reversing the trends. Baltimore—where in 2015 there were nearly 2,800 homeless people on a given night—is sure to be affected, as are cities like Los Angeles and New York, where one in five people experiencing homelessness in the U.S. live.

In the absence of federal funding, the burden will be shifted to states and local governments to fill in the gaps. In Baltimore, as in other cities, voters have approved the creation of an Affordable Housing Trust, although city action is still needed to identify a source of funding. In the past, states and local governments have shown remarkable resiliency in the face of federal cutbacks, nimbly preserving much of the subsidized stock during the Reagan years. But you can only make soup with the same bone so many times before you’re just eating hot water. With tightening budgets across the board, these programs will be unable to help the increasing number of citizens who desperately need them.

Public housing and vouchers have their strengths and weaknesses. But this budget proposal moves the conversation away from how to make these policies work better for poor Americans, and towards the more straightforward question: How can we keep poor Americans off the streets if we so drastically slash funding for subsidized housing?

Eva Rosen is a postdoctoral fellow with 21CC. Philip Garboden is a doctoral candidate in sociology at Johns Hopkins.

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