Yesterday, NLIHC released Out of Reach 2012: America’s Forgotten Housing Crisis. This report highlights the gap between wages renters actually earn, and what they would need to earn to afford the rent and utilities for a modest two-bedroom apartment in their state.
As a part of our release, we held a press conference on the data. Speaking at the event, along with NLIHC President & CEO Dr. Sheila Crowley and Senior Research Analyst Megan Bolton, was Dr. Raphael Bostic, Assistant Secretary for Planning and Development at HUD. Dr. Bostic and Dr. Crowley used their remarks to provide important context for the report.
Dr. Bostic described Out of Reach as providing an “evidence base” for what’s working and what’s not in terms of housing policy. He noted that the Worst Case Needs report HUD issues every two years has shown a tremendous increase in the number of renters in distress across the country, and that Out of Reach backs up these numbers
Two points from Out of Reach are particularly important to note, said Dr. Bostic: first, the stresses on renters are felt across the board- in both urban and rural areas, in communities of every size. Second, the housing crisis has had a big impact not just on home ownership, but on the rental market as well. He emphasized that there is a glut of housing supply that is mismatched to real demand, so it has not been able to relieve the demand pressure at the low-cost end of the housing market.
In terms of policy, Dr. Bostic outlined a number of issues HUD and the Administration feel need addressing. The Administration wants to see home ownership become a sustainable proposition, but does not see home ownership as the only goal of housing policy. In fact, the goal is for all people to be house well, no matter if that means rental housing or owned housing. But, Dr. Bostic said, reports like Out of Reach show that this goal has not been achieved across the board, and that more attention must still be given to rental housing issues.
Dr. Bostic presented three potential policy solutions. First, the Administration is concentrating on its jobs agenda so that Americans will have greater access to income and opportunity. Second, HUD is asking how the existing housing stock can be re-purposed to serve existing need, as through the new REO to Rental pilot just launched by FHA. Finally, HUD is looking at other parts of a household’s balance sheet in order to create sustainable housing and communities.
After Dr. Bostic’s remarks, Dr. Crowley spoke about the few resources currently available to create rental housing, most notably the federal Low Income Housing Tax Credit program and state and local housing trust funds. She said serious consideration needs to be given to aligning the targeting of housing programs with the greatest need for affordable housing, which is at the lowest end of the income spectrum. Even when programs are targeted to low income households, said Dr. Crowley, they are aimed at those whose incomes are on the higher end of the low income scale, leaving the poorest people without access to housing.
In her remarks and in answer to questions from members of the media, Dr. Crowley emphasized that the federal government spends astonishing sums of money subsidizing housing through the tax code, but that this subsidy benefits homeowners exclusively, and higher income homeowners receive the greatest benefit of all. She said that NLIHC and other organizations advocate transforming the mortgage interest deduction into a tax credit that would benefit middle income homeowners, and to put the savings from reform back into making housing more affordable for all Americans through programs like the National Housing Trust Fund.
Tomorrow, we’ll take a look at the findings from the report.