HUD

HUD Secretary Ben Carson

In the midst of a national homelessness crisis, HUD Secretary Ben Carson recently proposed rent increases that will, quite simply, make more people homeless. More than four million low-income vulnerable households would be affected across the country; New York would be hit hardest impacting more than a half million households.

Leaving aside, for the moment, the fact that New York already has a homelessness emergency, the proposals might appear on their face to be relatively minor: minimum rents would rise by $100; rents for people receiving federal housing assistance would rise from 30 percent of a household’s adjusted income to 35 percent of gross income and would cause all renters to lose the ability to deduct medical and childcare expenses from their income. People in public housing may also be required to meet work requirements and there are changes to what a ‘senior household’ means (the proposal would increase the age from 62 to 65 and a senior household only qualifies as senior if every adult in the household is over that age).

Much has been written about the proposal’s tripling of minimum rents for the very lowest income households (from $50 to $150), a stipulation that would affect 700,000 households with one million children. For the very poorest people, tripling the rent could very easily lead to homelessness.

Advocates have also pointed out that the inclusion of work requirements to the subsidies would have an overall negative impact (research has shown that work requirements do not result in increases in employment and analysts project an increase in homelessness).

And what SEEMS to be a 5 percent increase in rent (30-35 percent) is actually a 16.6 percent increase in a person’s rent (for instance if a person currently earns $1000, the 30 percent rent is $300; 35 percent of $1000 is $350, $50 = 16.6 percent of $300). Again, a sharp rise in rent can easily result in homelessness.

But little has been written about the impact of losing the ability to deduct medical and childcare expenses from income in order to calculate rent and the impact that would have on the most vulnerable people – those living in supportive housing. For these households, that seemingly small change from ‘adjusted gross’ to ‘gross’ income will mean the difference between having a home and homelessness.

Here’s what the proposed legislation will mean for Kelly, a single mother living in supportive housing run by Catholic Charities in Albany. With three children, including infant twins, Kelly is already struggling to make ends meet, working full-time at a minimum wage restaurant job earning $1,700 a month before taxes. After deducting childcare expenses, she pays $312 in rent. Under Carson’s new proposed 2018 Making Affordable Housing Work Act, Kelly would lose the ability to deduct childcare expenses and would pay a total of 35 percent of her gross income. Her rent would go from $312 to $592 a month, a 90 percent increase.

Or take the example of Ellen, a 57 year-old woman who is suffering from a traumatic brain injury following a car accident 15 years ago and who was also recently diagnosed with emphysema. Her medical bills neared $20,000 last year. Without the Section 8 exemptions for healthcare costs, her rent would more than quadruple: going from $179 to $856 per month.
More than 10,000 of our neighbors (individuals and families with children) in New York who were, but are no longer, homeless because they are now living in supportive housing would be impacted – and by impacted, let’s be clear: they will likely become homeless once again.

How this is even conceivable given New York state’s current homelessness/affordable housing crisis is hard to understand. There are already more than 89,000 individuals and families homeless in New York State today.

Not only is pushing thousands of people back into homelessness the wrong way to go morally, it is also precisely the wrong way to realize taxpayer savings. Homelessness among very vulnerable people is enormously expensive. Shockingly it costs more to maintain people in homelessness than to end their homelessness with housing connected to services—supportive housing. Last year a study in Los Angeles looked at the public costs of leaving some 900 people on the streets compared to their costs after accessing supportive housing. That study – like dozens of others before it – found that taxpayers saved an average of $8000 per person above and beyond the costs of housing.

A similar larger study in New York City found comparable results: giving a chronically homeless person a decent place to live and the services to help that person stay housed actually saved New York taxpayers $10,100 per year…after paying for that person’s housing. It is important to note that homelessness, especially among people with multiple challenges to stability, is extremely costly: without housing, chronically homeless people cycle in and out of shelters, psychiatric beds, emergency rooms, hospital beds, treatment programs and corrections.

Another version of so-called “rent reform” was recently proposed by Representative Dennis Ross which is even more draconian: it would eliminate medical and childcare deductions AND tenants’ rents would rise every two years until they were paying market rent.

If the federal government wants to promote employment, education and healthcare, it needs to invest more, not less, in housing. The recent HUD proposals – and future look-alike versions of the legislation currently being floated – are the precise wrong way to go if we wish to help the most vulnerable Americans and their children live independent healthy lives in our communities.

Laura Mascuch is the executive director of the Supportive Housing Network of New York and Brenda Rosen is the CEO of Breaking Ground.

4 thoughts on “CityViews: The Damage is in the Details of HUD’s Proposed Rent Policy Changes

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