Press Releases

PRESS RELEASE--2/12/03 

From the National Low Income Housing Coalition

BUSH TAX CUT PLAN IGNORES THE HOUSING NEEDS OF LOW INCOME AMERICANS

The Tax Cut Plan Does Not Address the Needs of

Low Income Families, Seniors, or People With Disabilities

The need for housing for people with the lowest incomes continues to be high. Five million homes would need to be constructed over the next 20 years to close the gap between the number of households with extremely low incomes and the supply of housing they can afford.1 The Bush tax cut that will give $385 billion in dividend tax cuts over 10 years to wealthy investors and businesses will result in a loss of revenue and, likely, further spending cuts in housing programs. The dividend tax cut combined with other tax breaks totals  $1.3 trillion over 10 years. Even before these additional tax cuts, the administration’s proposed FY04 budget will not address the housing needs of the millions of Americans who struggle every month to afford the most basic housing.

Spending on Housing is a Proven Stimulant

Building housing is a proven economic stimulus. In 1937, economist John Maynard Keynes wrote to President Roosevelt that housing was “by far the best aid to recovery . . . I should advise putting most of your eggs in this basket.”2  Housing creates jobs while meeting a demonstrated need and helping families who are struggling to choose between rent and other necessities. For example, just a $10 billion investment in housing production for low-income people could directly result in 368,000 jobs. When leveraged, 3.6 million jobs and $100 billion in wages could be created.3

Quick Facts

• 14 million households spend more than half of their income on housing or live in severely substandard conditions. One in every seven renter households in America is a member of this group.4
• For 2002, the fourth year in a row, in no jurisdiction in the United States does a minimum wage job provide enough income for a household to afford the Fair Market Rent (FMR) for a two bedroom home. In order to afford to rent a two- bedroom home at the nationally weighted FMR, a worker would have to earn $14.66 per hour, nearly three times the federal minimum wage.5
• Without considering leverage, $10 billion in funding to non-profits and other developers could result in the production  of more than 265,000 homes6.
• The construction of 1,000 single-family homes generates 2,448 jobs, approximately $79.4 million in wages, and more than $42.5 million in federal, state and local tax revenues and fees. The construction of 1,000 multifamily homes generates 1,030 jobs, approximately $33.5 million in wages, and more than $17.8 million in federal, state, and local tax revenues and fees7.

1.  Meeting Our Nation’s Housing Challenges, Congressional Millennial Housing Commission, May 2002.
2.  David M. Kennedy.  Freedom from Fear: The American People in Depression and War, 1929-1945 . (Oxford History of the United States, Vol. 9), 2001.
 3. “Home Sweet Home: Why America Needs a National Housing Trust Fund.” Center For Community Change. 2001.
4. “Housing: the Key to Economic Recovery.” National Association of Home Builders. Fall 2002.
5. Out of Reach 2002 . National Low Income Housing Coalition. September 2002.
6. “Home Sweet Home: Why America Needs a National Housing Trust Fund.” Center For Community Change. 2001
7. “Housing: the Key to Economic Recovery.” National Association of Home Builders. Fall 2002.

 # # #

PRESS RELEASE—2/4/03

From the National Low Income Housing Coalition

NLIHC PRESIDENT SHEILA CROWLEY’S STATEMENT ON HUD FY04 BUDGET

The Bush Administration’s proposed FY04 budget for the Department of Housing and Urban Development fails to address the nation’s most serious housing 

problems, threatens existing housing resources, and radically restructures the housing choice voucher program, the nation’s most successful housing assistance program.

HUD’s press statement on its budget acknowledges that defense and homeland security are making greater claims to federal discretionary spending for FY04, leaving less for investment in housing programs.

Yet, it is the growing federal deficit fueled by the Bush tax cuts of 2001 that are shrinking federal resources for domestic needs, including affordable housing.  The same Bush budget that cuts federal housing programs would also make even deeper tax cuts, effectively starving the federal government and preventing further domestic spending to address serious community and family needs.

HUD claims a 1.3% increase in its overall proposal when compared to its FY03 budget proposal, although a check of the budget proposal presented this time last year actually shows a slight decrease. HUD officials explain that they made “technical” adjustments to last year’s proposed budget. These adjustments conveniently allow a “technically” correct, but disingenuous, claim to a net increase for FY04. Even so, a 1.3% increase is based on small increases to select programs, flat funding for other programs, decreases in others, and outright elimination of others.

HUD’s treatment of public housing is especially harsh. Despite a proposed increase of $215 million in the Public Housing Capital Fund, the zeroing out of the HOPE VI program means that a net decrease of $259 million in investment in the modernization and revitalization of the nation’s public housing stock. Further, the proposed increase in the Public Housing Operating Fund of $44 million does 

not begin to make up for the $250 million “accounting error” that recently caused HUD to cut public housing agencies’ funding by 30% for the FY2003 budget year.

HUD’s proposal to block grant to the states the Housing Choice Voucher Program, including renaming it the Housing Assistance for Needy Families (HANF) program and granting governors wide latitude in use of the funds, offers scant information about how such a drastic change would be accomplished and what would happen to the more than 1.7 million households currently relying on housing vouchers to achieve housing stability and stave off homelessness.

What positive steps are proposed in the HUD budget (i.e. consolidation of three homeless assistance programs, 5% increase in the HOME program) are more that offset by the negative consequences of many of the proposals.

Finally, the HUD budget document references reliance on the Federal Low Income Housing Tax Credit Program for the production of affordable rental housing and once again proposed a new single family home ownership tax credit.

However, numerous analyses in recent weeks have documented that the Bush Administration proposed tax cut on dividends would render housing tax credit programs worthless and halt all investment in housing production that relies on the low income housing tax credit. HUD does not make any attempt to reconcile this incongruence in the Bush budget plan.

The administration’s proposed FY04 budget of $31.3 billion is only 37% of the FY76 budget of $83.6 billion (in constant 2002 dollars) in the last year of the Ford Administration.

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PRESS RELEASE—1/15/03

HUD SLASHES PUBLIC HOUSING OPERATING FUNDS

Millions of residents will be hurt by “accounting errors”

As a result of “internal accounting errors” that led to a budget shortfall of at least $250 million in FY02 and uncertainty about its FY03 appropriations, HUD is cutting FY03 operating funds to all Public Housing Agencies (PHAs) by an unprecedented 30%.

The cuts will be disastrous for the 3 million residents of public housing, yet HUD has so far refused to seek supplemental funding from Congress to remedy the shortfall.  Major operating costs include building maintenance, security, utilities, services and programs for residents, and staff to manage the housing.

“These cuts will most definitely hurt families living in public housing,” said Telissa Dowling, an NLIHC board member and president of the New Jersey Department of Community Affairs’ Resident Advisory Board. “It will mean less maintenance, less security, and cuts to job-training and after-school programs.  It will also mean more homelessness, as public housing agencies cope by reducing 

the number of units they operate.”

For FY 2003, Public Housing Agencies (PHAs) will receive only 70% of the operating funds they received in FY 2002, HUD announced on January 6.  And some PHAs (those with a fiscal year beginning October 1) report they will receive even less—only 54% of their current allocation.

“Given the striking absence of concern for the economic well-being of low income people that the Bush past and future tax plans demonstrate, it does not take much cynicism to believe that this is just the opening play in a plan to starve public housing out of existence,” said NLIHC President Sheila Crowley.

Public housing units are in great demand by families who cannot afford market-rate housing. The average wait to get into public housing is unknown because 

HUD has not updated its data since 1998, when the wait was 11 months. That time is almost certainly longer today. In many large cities, where affordable housing needs are most severe, waiting list times can be up to 10 years. In early 2002, there were 14,000 households on the waiting list for public housing in Boston.

About 43% of the households served by public housing are families with children, 22% are elderly households without children, and the remainder are households headed by people with disabilities or those without children. People of color head just over half of these households, and 38% of these households are headed by women.

In 2002, HUD had an estimated shortfall in the public housing operating account of at least $250 million, attributed to system problems, inaccurate estimates, incomplete data, and other problems.

The notice announcing the cuts is available at www.hudclips.org/sub_nonhud/cgi/newsdoc_run.cgi 

# # #

PRESS RELEASE—9/27/02

from NLIHC newsletter

SEATTLE HOUSING LEVY PASSES

On September 17, voters approved an $86 million, 7-year property tax levy for low income housing in Seattle. It is the fourth such measure approved since 1981.

Seattle’s “Yes for Homes” housing levy campaign ran throughout the summer without organized opposition and had numerous and diverse supporters including the Downtown Seattle Association, Seattle Displacement Coalition, Tenants Union, Church Council, King County Labor Council, League of Women Voters, Greater Seattle Chamber of Commerce, and Housing Development Consortium of Seattle-King County (HDC).

However, several weeks before the election, the lone City Councilmember who had voted against the particular package that went on the ballot again became vocal, saying that income limits were too high (up to 80% of median for homebuyer assistance and for part of the targeted neighborhood program) and that homeownership should not be a part of the package. At one panel discussion, she said she earned $90,000 and couldn’t afford to live in Seattle, and didn’t see why the City should subsidize homeownership; she said the programs should only be for seniors and disabled persons who are very low income. The media immediately picked up on her complaints, since there had been very little controversy surrounding the campaign until that point.

In addition, The Seattle Times, one of the two major daily papers, came out against the levy because ‘times are tough, and the tax burden is too high.” The Times said increasing the levy to account for inflation from the $59 million approved in 1995 to $86 million for 2003 was not a “renewal.” These occurrences made for some tense last weeks of the campaign.

“Despite all that happened, Seattle voters did renew their commitment to affordable housing and economic diversity. They understood that housing creates jobs and is a critical community and economic development tool,” said Carla Okigwe, HDC Executive Director.

The levy will cost the average homeowner $49 per year. Eighty-six percent of the money will be used in support of rental housing: $56.1 million for production, $7.2 million for mixed use, mixed income project development in targeted neighborhoods, $7.8 million for a trust fund to subsidize operating and maintenance in extremely low income projects, and $2.8 million for emergency rent to prevent homelessness. Nine percent will be used to continue a program for revolving loans to help homebuyers at or below 80% of median income afford to buy homes in the city, particularly in community development areas. And 5% is reserved for the City’s administrative expense. The City’s Office of Housing loans the money to nonprofit developers to build or renovate the rental projects and contracts with nonprofit organizations to run the homeownership and homelessness prevention programs. The levy is an important leveraging tool for the nonprofit developers, who combine the City’s levy subsidy with tax credits, State Housing Trust Fund, and private loans and grants.

The levy allows the City to raise money annually from property taxes in equal amounts over the seven-year term, thus keeping a smooth flow of production over seven years and avoiding interest costs. If the money were raised through a bond issue, the bonds would have to be issued in a tight time frame and significant interest would have to be paid over a longer number of years to bondholders, Ms. Okigwe said.

For more information: Carla Okigwe, Executive Director, Housing Development Consortium of Seattle-King County (HDC), 206-682-9541, http://www.hdc-kingcounty.org.

The materials in this package come in large part from the National Low Income Housing Coalition and ACORN.  The Service Center would like to thank these groups for mapping out the high road on reforming the state affordable housing system.

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