New "Decade of Neglect" Report Demonstrates How Federal Funding Shortfalls Have Weakened Rental & Low-Income Housing

The Center on Budget and Policy Priorities has released a new report, "Decade of Neglect Has Weakened Federal Low-Income Housing Programs," available at http://www.cbpp.org/2-24-09hous.htm .

The report presents new data on the growing number of low-income renters facing unaffordable housing costs, and shows how recent funding shortfalls and policy changes have weakened federal housing programs that could address the growing needs. The key findings of the report are:

• The need for rental assistance among low-income families is growing. In 2007, more than 8 million low-income renter households paid more than half their income for rent and basic utilities, an increase of 2 million, or 32 percent, since 2000.

• Yet low-income housing programs have declined as a priority in the federal budget. Since 1995, federal spending on low-income housing assistance has fallen by well over 20 percent both as a share of all non-defense, discretionary spending and as a share of Gross Domestic Product (GDP).

• When substantial federal budget deficits -- driven primarily by deep tax cuts and increased spending on defense and homeland security -- re-emerged during the Bush Administration, the fiscal pressure on low-income housing programs increased considerably. From 2004 to 2008, total funding for all low-income housing programs fell by $2 billion, or 5 percent. For some programs, such as public housing, these cuts came on top of earlier funding reductions.

• Reductions in funding, combined in some cases with policy changes that exacerbated funding instability, have weakened the Housing Choice Voucher, Public Housing, and Section 8 Project-Based Rental Assistance programs, the three largest federal rental assistance programs. Housing voucher assistance for approximately 150,000 low-income families was eliminated from 2004 to 2006, as funding shortfalls compelled state and local housing agencies to serve fewer families. In addition, the risk has increased that large numbers of public and private assisted housing units will be lost in coming years due to physical deterioration or decisions to remove developments from the assisted stock.

• Following a decade of neglect, new resources, as well as a comprehensive strategy, are needed to preserve existing public and private assisted housing, utilize more fully the Housing Choice vouchers that Congress has already authorized, and expand assistance to help more families secure stable, affordable housing in safe neighborhoods with access to the opportunities and essential services they need to improve their lives.

• The most flexible, cost-effective way to expand assistance is to fund new, "incremental' vouchers. Two million new vouchers (e.g., funding 200,000 new vouchers per year over ten years) would help roughly 3 million low-income households to secure decent, affordable homes; lift an estimated 3.3 million people, including 1.6 million children, out of poverty; and prevent 230,000 people, including 110,000 children, from becoming homeless. (These figures represent the estimated impact over the initial 10-year period alone.)