HUD and Most Other Federal Programs End Year Operating Under Continuing Resolution                                                                                                                      

The 110^th Congress adjourned on December 8 having passed only 2 of the 12 appropriations bills facing it.  Among the 10 bills left for the new Congress to deal with is the HUD appropriations bill.  HUD and most other agencies (but not the Departments of Defense or Homeland Security) are now operating under a Continuing Resolution that expires February 15.  There is the prospect of continuing resolutions being enacted through FY2007, which ends September 30, but that approach would even more adversely underfund many housing programs, including Section 8, because they would be forced to run on the lower of FY2006 funding or the House-passed FY2007 level.  For more on the federal housing budget (and much more), go to the National Low Income Housing Coalition’s (NLIHC) web site, from which the above information was largely drawn (www.nlihc.org)

Prospects for positive change in new Congress?

The change in control of both houses of Congress has raised hopes among low income housing advocates of some positive change.  While the new Congress will face severe limits on its discretionary spending options, it may be inclined to make changes in areas such as:

n     removing some of the barriers that court have imposed to private enforcement of federal law based legal rights;

n     repealing the public housing community service requirement;

n     ensuring mobility/portability of Section 8 voucher assistance;

n     promoting the preservation of HUD assisted low income housing at risk of being lost.

The incoming chairs of the 2 congressional committees primarily responsible for housing matters (apart from appropriations) are Barney Frank of Massachusetts for the House Financial Services Committee and Christopher Dodd of Connecticut for the Senate Banking, Housing & Urban Affairs Committee.  The chairs of the 2 appropriations subcommittees responsible for HUD funding are expected to be Senator Patty Murray from Washington and Rep. John Olver from Massachusetts

No relief in housing affordability crisis

According to its recently released Out of Reach study, the NLIHC reports that the national housing wage is $16.31/hour, or $33,925 annually.  Those numbers are what a household in the U.S. must earn to afford a 2-bedroom rental at the HUD Fair Market Rent (FMR).  The standard measure for housing affordability is that housing costs consume 30% or less of a household’s gross income. In Michigan, the housing wage is $13.80/hr or $28,701/year.  The FMR for a 2 BR unit here is $718.  What that means is that to afford a 2 BR apartment in this state, a household must have 2 persons working fulltime at the state’s new (as of October 1) minimum wage of $6.95.  For more on Out of Reach, including its preface by Rep. Frank, go to http://www.nlihc.org/oor/oor2006/

Another NLIHC analysis, this time of data from U.S. Census Bureau’s American Community Survey, shows a spike between 2000 and 2005 in the percentage of their income that renters and homeowners put toward housing costs.  During that period, that figure increased from 26 to 29% (it had fluctuated between 25-26% between 1980 and 2000).  For households in the lowest income category - 30% of area median income (AMI), called “extremely low income (ELI)”, the figure is an astonishing 79% (up from 71% in 2001.  According to HUD income limits, in Michigan, 30% of AMI for a household of 4 ranges from $15,350-$26,350; the LSC eligibility income guidelines for a household of 4 is $25,000).  In 2005, ELI households comprised 25% of renter households and 7% of owner households.  Between 2001 and 2005, there was an almost 900.000 increase in the number of ELI renter households.

Between 2000 and 2005, the percentage of families spending more than 30% of their income on housing (i.e. living in unaffordable housing) increased from 40 to 49%.  88% of  ELI renter households pay more than 30%; 74% of these households put more than 50% of their income towards housing costs.  For these households, between 2001 and 2005, increases in housing costs easily outpaced increases in income.   To see this analysis, see http://www.nlihc.org/doc/RN06-05.pdf