IN Statewide Conference on Housing & Community Economic Development / Midwest Summit

September 20, 2011

Linda CouchSenior Vice President for Policy

www.nlihc.org

Last week’s Census numbers

• 46.2 million people in poverty, 2.6 more million than in 2009

• The largest number in the 52 years for which poverty estimates have been published

• One in six are poor in the United States• One in three young families with children

The Gini Index

• Measure of income inequality• Ranges from 0, when everyone earns the

same• To 1, when all income goes only to one person• In 2009, U.S. Gini index was 0.468, a 20% rise

in income disparity over last 40 years• Similar to Gini indexes of the Philippines and

Mexico

HUD’s Largest Programs

• Vouchers

• Public Housing

• Project-Based Section 8

Housing Choice Vouchers

• 2 million vouchers in use today• Loss of 150,000 (2005 – 07)• Many improvements in the offing

House subcommittee would cut more than 40,000 voucher households from program in FY12

Housing Choice Vouchers

• Section 8 Voucher Reform Act / SESA– Rent-setting and income reviews– Inspections– Enhanced vouchers– Project-basing vouchers– Other objectives? Time limits, Moving to

Work?

Public Housing

• 1.1 million units, $26 billion rehabilitation backlog

• Loss of 150,000 over last 15 years, >10K a year• Choice Neighborhoods Initiative: Continue to

redevelop housing, but also focus on entire neighborhood

Public Housing

• HUD’s Rental Assistance Demonstration• Authorize greater access to private capital

– Allow conversion of PH units to project-based contracts

– Choice option– Long term, renewing contracts and use restrictions

House subcommittee $$:• 16% cut to operating; 25% cut to capital

Project-Based Section 8

• 1.4 million units• Loss of more than 300,000 units late 1990s,

pace of loss has slowed• Contracts with owners backed by FHA

insurance, Congress reticent to underfund but threats loom as all is on the table

These three programs are critical:

• They are affordable to each household – bringing stability to households and communities

• They are deeply income targeted–Why income targeting matters:

If you lined up…

Units (by affordability category) Households (by income category)0

5

10

15

20

25

30

35

40

45

6.510.0

11.67.2

15.9

7.2

6.2

11.1

Rental units and renters in the US, matched by affordability and income categories (2009)

Not Low Income

Low Income

VLI

ELI

Co

un

t (m

illio

ns

)

Source: NLIHC Tabulations of 2009 American Housing Survey

The Gap

ELI VLI Low Income

(6,000,000)

(4,000,000)

(2,000,000)

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

A Comparison of Households and Units by Income Threshold* (2009)

Income Categories

Su

rplu

s (D

efic

it)

of

Aff

ord

able

Un

its

Source: Source: NLIHC Tabulations of 2009 AHS data

ELI = Extremely Low Income (<=30% AMI)VLI = Very Low Income (<=50% AMI)Low Income = (<=80% AMI)* Units are affordable within an income category if rent and utilities cost 30% or less of top threshold income. Adjusted to reflect 2008 Census guidance, may differ from previous re-sults

Severe Housing Cost Burdens

• Of all renter households paying more than 50% of their income on housing

• 78% have incomes below 30% of area median in IN

• 79% have incomes below 30% AMI in OH• 76% have incomes below 30% AMI in IL• 75% have incomes below 30% AMI in KY• 73% have incomes below 30% AMI in MI

“Vacancies,” “Glut of Empty Homes”

Incomes of extremely low income households are extremely low!

• Median U.S. household income is $60,000• Median HUD household income is $10,200• Just 32 affordable and available homes for

every 100 extremely low income renter households

CDBG and HOME

• House subcommittee did not cut CDBG funding but would cut CDBG admin fees from 20% to 10%

• House subcommittee would cut HOME program in FY12 by 25%

• Cuts expected in Senate as well

Super Committee

• Budget Control Act set up requirements for massive spending cuts over next decade

• Sets 10 years of spending caps for discretionary spending

• Anything short of $1.2 trillion in cuts enacted by 12/31/11 would be metered out in across the board cuts beginning in January 2013

Tax Reform and Deficit Reduction– what will be addressed?

Low income housing tax credits• $5 billion a year• Reforms • Keep out of tax reform/deficit reduction discussion

Mortgage interest deduction reform• $100 billion a year• Top 10% of tax payers get 30% of benefit (top 32% get 72%)• On the table in deficit reduction talks as well as how and

whether gov’t should be supporting homeownership

Housing Finance Reform

• U.S. take over of Fannie Mae and Freddie Mac• White House sees more limited role for feds in

future mortgage market• Agree w/White House that fed gov’t has duty to

low income households• ELI rental market is one that history (and

current data) tell us private developers will leave behind

• MF rental is ripe for public investment

HUD is busy, too

• Happy to avoid Congress if possible• Small area Fair Market Rent (FMR) demonstration• Implement HEARTH Act, consolidating three McKinney-Vento

homeless assistance programs• Amend HOME rule• Streamline portability process• Allow new cross-jurisdictional consortia to administer

vouchers• Improve Section 3 education and oversight• Improve and simplify Consolidated Plan process• PHA accountability and transparency: salaries, red flags

Opportunities

Sane person finds the bright side• GSE reform• Some common sense reforms generate

savings and could be implemented• Administration and many in Congress are

committed to balanced housing policy

Balanced Housing Policy

• As more of us become renters

• Balanced as to favoring one form of tenure over another

• Balanced as to resources devoted to programs

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