The number of low income families with severe housing affordability problems increased 33 percent between 2000 and 2005, according to a new report on the Center on Budget and Policy Priorities. However, during that same period, funding for federal housing assistance in 2006 was $3.3 billion, or 8 percent less than in 2004, adjusted for inflation. The report, The Effects of the Federal Budget Squeeze on Low-Income Housing Assistance, is now available online.
Budget cuts have led to an unprecedented loss of 150,000 Section 8 housing vouchers over the past two years, according to the report. Funding for public housing declined 25 percent (adjusted for inflation) between 1999 and 2006 and the number of public housing units fell by 170,000 over the past 10 years. During the same time period, 300,000 units of privately owned housing supported by federal subsidies were lost to expiring contracts. Without an additional $2 billion to renew long-term contracts, another 300,000 units will be lost over the next five years.
The authors predict that the budget squeeze on discretionary programs will tighten as deficits persist over the next 10 years, then grow because of increasing health care costs, the aging of the population and the effects of recent tax cuts. At the same time, demand for rental housing is expected to rise even as 200,000 units are lost every year.
The report claims that the administration’s tax cuts are the single largest source of the budget squeeze. When fully in effect, the annual tax cuts for only the wealthiest 1 percent of taxpayers will cost nearly twice as much as HUD’s entire budget. Policy recommendations include reinstating pay-as-you-go rules in which the costs of entitlement increases and tax cuts must be offset and enacting deficit-reduction packages similar to those of 1990 and 1993 that combined spending reductions, tax increases and anti-poverty initiatives.
