CORRESPONDENCE - WS-1 OPPOSITION

Home Browse Search

income quartile had just $488 per month to spend on other essen- tials -18 percent less than in 2001 after adjusting for inflation. The added costs of utilities and transportation further strain household budgets. Low-income households with children and older adults with severe rental cost burdens are in a particularly precarious posi- tion and may be unable to afford other goods and services that are critical to health and well-being. SHORTFALL IN RENTAL ASSISTANCE Need for housing assistance continues to grow. HUD's Worst Case Housing Needs 2017 Report to Congress shows that the number of very low-income households receiving rental assistance increased by 600,000 from 2001 to 2015. Over the same period, the number of very low-income households (making less than 50 percent of area median) grew by 4.3 million, with extremely low-income house- holds (making less than 30 percent of area median) accounting for more than half (2.6 million) of this increase. As a result, the share of renters potentially eligible for assistance and that were able to secure this support declined from 28 percent to 25 percent (Figure 6). Meanwhile, the share of very low-income renters facing worst case needs—that is, paying more than half their incomes for hous- ing and/or living in severely inadequate units—increased from 34 percent to 43 percent. Making matters worse, much of the subsidized rental stock is at risk of loss either due to under -maintenance or expiring affordability periods. Public housing is particularly under threat, with a backlog of deferred repairs last estimated at $26 billion in 2010. In fact, the number of occupied public housing units fell by 60,000 between 2006 and 2016. The Rental Assistance Demonstration (RAD) program was launched in 2012 to convert public housing into long-term project - based Section 8 contracts in order to provide more flexible financing for improvements. The RAD program quickly reached its initial cap of 60,000 units, which has since been increased to 225,000 units. The two main sources of rental housing assistance are the Housing Choice Voucher and Low Income Housing Tax Credit (LIHTC) pro- grams. Vouchers enable recipients to choose units on the open market as long as they meet rent and quality standards. Despite a 6.8 percent increase in funding between 2011 and 2016, rising rents kept growth in the number of voucher holders to just 5.8 percent. In contrast, the LIHTC program provides funding for new construc- tion as well as rehabilitation and preservation of existing assisted housing. In recent years, the LIHTC program has supported 70,000 affordable rental units per year, with roughly 55 percent added through new construction. But over the next decade, nearly 500,000 LIHTC units, along with over 650,000 other subsidized rentals, will come to the end of their required affordability periods. The need for funding to help rehabilitate and preserve this important stock will fuel significant demand for LIHTC funding, thus limiting opportuni- ties to build new affordable rentals. In recognition of the important role that the LIHTC program plays, the Congress is considering a bipartisan proposal to expand funding while also introducing reforms that would improve the ability of the program to serve both lower- and moderate -income households Despite Recent Declines, the Number and Share of Cost -Burdened Renters Remain Well Above Levels a Decade Ago Millions Percent 12 10 9 A 7 6 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Number ofMade rate lysuffered Ron Iurs (Left soahi G Number of Severely Burdened Renters (Left suite) a Shore of Renters with Cost burdens (Right scale) Notes: Moderately (severely) cost -hardened households pay 30 50% from then W%I of income for housing. Households with seen or negative income are assumed to hove. severe burdens, while households paying no cash rent are assumed to be where burdens. Source'. LUIS tabulations of US Census Bureau, Amednen Community survey 1 -Year Estimates. 52 50 48 46 44 42 40 38 5