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Federal Government Should Not Cut Rental Subsidies

Columns appearing on the service and this webpage represent the views of the authors, not of The University of Texas at Austin.

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The federal government is moving to cut rental subsidies for families relying on federal housing assistance despite the inadequate supply of affordable rental housing for renters with extremely low incomes.

Instead of proposing cuts to the federal programs that assist low-income renters, the federal government should do the opposite of what the Trump administration is proposing and take steps to address the inadequate supply of affordable rental housing across the nation.

How exactly? For starters, private developers should be given additional incentives and tax credits to set aside larger percentages of new housing they build for low-income residents. These incentives and credits will help encourage the development of low-income housing across the United States, and they are especially needed in areas with strong housing markets, where developers tend to focus on building housing for residents with higher incomes.

The federal government should also consider funding Housing and Urban Development programs that give the most assistance to low-income renters. Existing rental assistance programs that have proved to be effective (such as housing vouchers) should be replicated and funded in communities across the nation. Expansion of funding to programs like Housing Choice Vouchers will allow more families with low incomes to secure subsidized housing in private housing markets. The reality is that healthy lives outside of poverty with stable jobs cannot be built without the security of a home first.

Families with extremely low incomes earn less than 30 percent of the median income in their area of residency. For example, in Harris County, Texas, a family with an extremely low income would make less than $23,000 annually.

Families with incomes this low usually have some commonalities that make them vulnerable in multiple ways. They may have family members who are disabled or who have chronic illnesses. Many include young children and family members who are working for low wages. At the current minimum wage of $7.25 per hour, a full-time worker brings home around $15,000 annually.

There are also racial disparities in the households with extremely low incomes. Black renter households account for 35% of those with extremely low incomes, while Hispanic renter households account for 29%.

By comparison, white renter households account for 21% of those with extremely low incomes, indicating ongoing racial disparities in wages and wealth.

Households with extremely low incomes share struggles when making monthly financial decisions to determine which family needs will be met. These hard decisions may mean choosing housing over food, or food over medications.

Housing cost has a major impact on households with extremely low incomes. Eleven million households in our country spend more than 50% of their income on housing; three-quarters of them have extremely low incomes. The National Low Income Housing Coalition reports that the severe cost-burden of housing for families with children translates into 75% less spent on health care and 40% less spent on food, when compared with low-income households without severe cost-burden of housing.

Families that earn extremely low incomes and experience high housing cost-burdens are less likely to have emergency savings. Small crises such as a day or two of sick absence can leave these families behind on rent and at risk of eviction. Research shows that evictions are directly correlated with job loss, inability to secure future safe affordable housing, poor physical and mental health, suicide and more.

The lack of affordable rental properties increases risk as well. Nationwide, there is an average of 37 affordable rental properties per 100 households with extremely low incomes. Texas has one of the highest shortages, with an average of 29 rental properties per 100 households with extremely low incomes, and this average hides lower numbers in major cities such as Houston (19 rental properties per 100 families) and Austin (21 rental properties per 100 families).

The proposed cuts to low-income rental subsidies mean that households with extremely low incomes are losing hope for long-term, stable housing options and a way to build lives outside of poverty. Lawmakers have a chance to make things better. Instead, this proposed move to cut rental subsidies will only makes things harder.

Cossy Hough is a clinical associate professor in the Steve Hicks School of Social Work at The University of Texas at Austin.

A version of this op-ed appeared in the Austin American Statesman and the Waco Tribune Herald.

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