U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
WASHINGTON, D.C. 204100001
April 1998
TO THE CONGRESS OF THE UNITED STATES:
I have the privilege of transmitting Rental Housing Assistance -- The Crisis Continues, the worst case housing needs report for 1997 as requested by the Senate Appropriations Committee in 1990. The report presents clear and compelling evidence of deep and persistent housing problems for Americans with the lowest incomes. The report makes it clear that the Federal government must significantly enhance its efforts to create more affordable housing opportunities for these households.
This report has four major findings:
- Despite robust economic growth between 1993 and 1995, the number of very-low-income American households with "worst case" housing needs remained at an all-time high -- 5.3 million. Households with worst case needs are defined as unassisted renters with incomes below 50 percent of the local median who pay more than half of their income for rent or live in severely substandard housing.
- The stock of rental housing affordable to the lowest income families is shrinking and the Congress has eliminated funding for new rental assistance since 1995. Between 1993 and 1995 there was a loss of 900,000 rental units affordable to very-low-income families (those with incomes below 50 percent of area median income), a reduction of 9 percent. There was an even greater reduction -- 16 percent -- in the number of units affordable for extremely-low-income renters, those with incomes below 30 percent of area median.
Since 1995, Congress has denied the Administration's requests for new rental assistance to mitigate worst case needs. This is a historic reversal of Federal housing policy. From the Great Depression until 1995 -- under both Democratic and Republican Administrations and in periods of economic boom and recession -- Congress always expanded the availability of rental assistance. As the report makes clear, it should do so now.
- From 1991 to 1995, worst case needs increased the fastest among the working poor. Full-time work should provide a family with an income sufficient to afford a decent place to live. This study documents a disturbing trend in the opposite direction. In the economic recovery between 1991 and 1995, worst case needs increased fastest among working households. Between 1991 and 1995, the number of working poor households with worst case needs increased by 265,000, or 24 percent. In 1995, almost 1.4 million of the 5.3 million households with worst case needs had earnings equivalent to a full-time worker at the minimum wage.
- One of every three households with worst case needs now lives in the suburbs. While the greatest numbers of worst case needs are in central cities, a large and fast-growing number of households in need of assistance live in the suburbs. More than 1.8 million households with worst case needs -- or one of every three worst case households -- lived in the suburbs in 1995, an increase of 9 percent from 1991.
The data in this report confirm what housing practitioners already know about the overwhelming unmet need for housing assistance. More than one million families are on waiting lists nationwide forcing families to wait years before getting assistance. When the waiting list for Chicago's Section 8 certificate and voucher program was opened for two weeks in the summer of 1997, 100,000 applications poured in. Administrators were forced to tell three-quarters of these applicants that they would have to wait more than five years for assistance. There are 17,700 households on waiting lists in San Diego, 12,000 in suburban St. Louis County, and 5,000 in Spokane, Washington.
The report's findings make a clear and compelling case for greater Federal attention to housing needs. Economic growth alone will not ameliorate the record-level housing needs among families with limited incomes. Not even families working full-time at minimum wage can afford decent quality housing in the private rental market. The report also makes clear that this is not just a big city problem, but affects America's growing suburbs as well.
To address these problems, the Administration has asked Congress to resume the expansion of rental assistance for low-income Americans. President Clinton's fiscal year (FY) 1999 budget requests 103,000 Section 8 units for families and individuals who cannot afford to rent decent housing. Fifty thousand of these housing vouchers would be used by families making the transition from welfare to work.
The Administration has also proposed expansion of programs to help build and rehabilitate more affordable housing. The FY 1999 budget expands funding for the HOME program and proposes a new HOME Bank, a new loan guarantee feature allowing communities to leverage up to five times their annual grant amounts for larger scale projects. The Administration also proposes a substantial expansion of the Low Income Housing Tax Credit program that would produce 180,000 affordable rental units over the next five years. Additional rental assistance is an important complement to these programs, to ensure that all HOME and tax credit housing is affordable to even the lowest income households.
Congress is also considering legislation that will determine the income levels of households who will be admitted to public housing and be provided Section 8 rental assistance. The Clinton administration and HUD strongly support the transformation of public and assisted housing developments into healthier, mixed-income communities. But policymakers must be careful not to exclude poor families altogether from these housing developments, nor to increase by Federal policy the numbers of families with worst case needs. This report shows that mixed-income communities can be achieved while still continuing to serve families who are working but who have low incomes and serious housing needs.
I look forward to working with the Congress to try to reverse the disturbing trends documented in this report.
Sincerely,
Andrew Cuomo
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