Wednesday, July 4, 2012

Interpreting Independence Day and the Affordable Housing Trust Fund

The National Low Income Housing Coalition published a call to action on the 4th of July (here) tying the suffering discussed in the Declaration of Independence to the suffering of people who can't find housing that works for them.

While none of the nation's founding documents discussed a right to adequate, affordable, and appropriate housing options for all people, that does not prevent that goal from being an important and achievable one in 21st-century America. Although there are over 130 million housing units in the nation, there are not simply not enough homes in the right locations that are affordable, available, in good condition and with the right features to enable those whose incomes are a fraction of most people in their region to have happy or successful lives. NLIHC estimates the gap for between need and availability at 6.8 million households.

While people are amazingly adaptable, many are in compromised situations that are temporary or unstable. I have seen many people "making due" in less than ideal circumstances, but when taking a big-picture view, it's clear that we are not efficiently meeting housing needs as a nation. There are dozens of scenarios that could illustrate this problem, but here are two based on real stories that I believe that most of you can relate to: First, picture a single-income family that lives 40+ miles from work, but that daily commute is made because they cannot afford housing in a closer-in location. Their car has 200,000 miles on it and is showing its age. Now picture another household in the same neighborhood: a single older person who is at a higher risk of a calamitous fall due to the poor design or condition of their home, who rarely leaves and is rarely visited by her daughter who has no reliable car to drive see her. Both of these households are stable at present - they are making it day to day, but are one event away from complete instability. A rise in gas prices or a fall in the home could lead to trouble. Housing options in the right price range, near transit, the town center or the regional job center, with energy efficient features, and universal design features that work for people of all physical abilities could make both of these households more stable.

The private market is simply not meeting the need for low income people and the efforts of non-profit organizations and state and local governments meet only a part of that need. More options for low income people must be created to close the gap. Observers of the federal government will note that recent administrations have moved away from creating affordable housing in any great amount, so that leaves us searching for solutions. Generally, more tools are needed, and no single one is powerful enough, so using a wide range of them is our great hope for solving this problem.

One great tool to help meet those needs is the housing trust fund - a dedicated source of money to help meet housing needs for people with lower incomes, while providing the flexibility for state and local governments to do a range of related tasks, depending on the local needs and circumstances. (For more on trust funds, see an AARP Public Policy Institute fact sheet from 2008.)
In May, after years of work, Alabama housing advocates were able to get the Alabama Housing Trust Fund created - a great victory in one of our more conservative states. The fund's criteria for the activities that could be funded include "energy efficiency, green and health design and other environmental and sustainability standards" along with the extent to which housing will be near "transit lines, shopping, community services and other amenities" (amongst other considerations).

This is an example of our progress from the days when governments placed affordable housing on the cheapest possible land as basic shelter (though the. The new generation of housing tools reflects the reality that housing is not just shelter: Housing is the largest component of most people's budgets, and for people with low incomes, housing and transportation costs combine to dominate many monthly budgets. Family lifestyles, health, connection to communities and regional economies are all impacted by housing. (And this is before one considers the possible wealth-building benefits of creating sustainable homeownership options, or the fact that housing is a platform for providing the kinds of in-home services that can keep people out of hospitals and nursing homes.) While some of these themes might be familiar to the generation that founded the country, housing is certainly different in 2012.

In short, housing is an important component of people's lives, and it is part of a complex regional and national economy. On top of that, housing needs just aren't being met. As recognition of these facts grew, housing advocates began to get bipartisan support for trust funds in recent years, eventually getting Congressional support for a national trust fund. Unfortunately, the story does not end there - unforeseen events can get in the way.

Four years ago, the National Housing Trust Fund was created in the Housing and Economic Recovery Act. It was supported by many progressive housing advocates and signed into law by a Republican president. Generally, this large national fund would provide monies to state housing trust funds for the construction, rehabilitation, preservation and operation of rental housing for households that with very low or extremely low incomes. (A small amount could be used for homeownership activities.)
The catch is that the fund would have been financed by ongoing contributions from the profits from Fannie Mae and Freddie Mac. Those payments were suspended later that year, when those two Government Sponsored Enterprises were placed under the new Federal Housing Finance Agency, and these contributions were suspended before one dime made it to the fund. For advocates, the July victory was followed by the reality that their new weapon against the housing problems of the nation had no funding. For the last four years, President Obama's proposed budget has included the $1 billion needed to capitalize the fund, but Congress has yet to make that happen. As a result, advocates in Alabama and other states are scrambling to find funding for their housing trust funds and many national organizations are back in the trenches year after year to get the National Housing Trust Fund consistent dollars and momentum that it needs to be successful.

I have a different interpretation of the significance of the Fourth of July. Instead of viewing this holiday as a reminder of the fight against suffering that founded the U.S., I like to use it as a reminder of how far we have come as a nation, and I marvel at our ability to grow and adapt over time - we have come a long way since 1776. This Independence Day, I am happy that we were able to get a national housing trust fund into law, and I am hopeful that we can get a permanent source of funding soon - we need all of the tools that we can get to make sure that people can get the housing that they need. It may not have been promised in the Declaration, but that didn't stop us from promising it four years ago, and it doesn't stop us from delivering on that promise today.

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