Housing advocates warn GOP spending plan would be ‘disastrous’

Housing advocates warn GOP spending plan would be ‘disastrous’

13 May    AP, Finance News, PMN Business

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Housing advocates are raising the alarm about House Republicans’ plan to dramatically cut the federal deficit to raise the debt ceiling, warning rental aid would be stripped from hundreds of thousands of struggling families who could face eviction and possible homelessness at a time when rents remain high.

House Republicans narrowly passed a sweeping measure last month that would roll back non-defense spending to 2022 levels — a proposal the National Low Income Housing Coalition said would slash housing and homelessness programs by 23%, a significant blow to the Housing Choice Voucher rental assistance program that around 2.3 million families rely on to cover rent.

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“House Republicans’ plan would have drastic negative impacts on communities’ abilities to address homelessness and the housing crisis,” Diane Yentel, the coalition’s CEO and president, told The Associated Press. “If these proposals were enacted, it would mean communities would have to take away housing assistance from people who already have it, and need it.”

Though House Speaker Kevin McCarthy’s legislation has virtually no chance of becoming law, Republicans hope it will force President Joe Biden to the negotiating table, where the GOP could seek concessions in return for lifting the debt ceiling and ensuring the U.S. Treasury can pay its bills.

Yentel said she worries that Democrats will agree to painful cuts to housing funds in order to reach a compromise.

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In 2011, during a similar standoff over the debt ceiling, then-President Barack Obama and then-Speaker John Boehner agreed to automatic annual spending cuts — a deal Yentel said hamstrung the Department of Housing and Urban Development for years.

“The Budget Control Act led to very tight spending caps over 10 years for HUD programs as well as many others,” Yentel said. “Even though we haven’t been under those tight spending caps over the past couple of years … we still haven’t made up for all of the cuts since 2011.”

Due to high inflation and rising rents, voucher program funding needs to rise each year just to maintain the status quo, she said.

It’s been over a year since rent increases hit a fever pitch, with median listings rising 16.4% from January 2021 to January 2022, according to realtor.com. Rents rose 0.6% from March to April, according to federal data. Though still high, that’s one of the smallest increases in the past year.

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“At a time where rents are so high, pandemic-era eviction resources have been all but depleted and homelessness is increasing in many communities — now, more than ever, we can’t afford any cuts to these programs,” Yentel said. “We need to be increasing funding for them.”

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Joel Griffith, a research fellow at the conservative Heritage Foundation, said HUD funding has gotten out of control and that housing aid needs to be a “temporary assistance program targeted towards those who are truly in need.”

Rep. Chip Roy, R-Texas, a member of the conservative Freedom Caucus, agreed. “How much debt is too much?” Roy said of the national debt. “We have an obligation to actually limit spending, so we should get serious about doing it.”

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But in a statement to the AP, Democratic Rep. Emanuel Cleaver of Missouri called the House bill “egregiously offensive,” saying it “turns a blind eye to public housing and would further diminish our nation’s already short supply of affordable housing.”

In December, during a congressional hearing on affordable housing shortly before Republicans took control of the House, GOP Rep. Patrick McHenry told committee members he would work to “prioritize housing” and “actually achieve some bipartisan results.”

But over four months later, housing has received almost no attention in McHenry’s House Financial Services Committee, with not a single hearing addressing the pressing issue.

It’s much the same at the Financial Services Subcommittee on Housing and Insurance, helmed by Rep. Warren Davidson, R-Ohio. Of 74 bills introduced by GOP members, just one was related to housing, though a subcommittee hearing was scheduled for Wednesday on mortgages and housing affordability.

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Laura Peavey, a spokesperson for McHenry, did not address whether the GOP spending plan would lead to significant housing cuts. But she said it’s “important to note that after two years of unified Democrat control and trillions in new congressional spending, housing is now less affordable.” A spokesperson for Davidson did not respond to multiple requests for comment.

Cleaver, the ranking Democrat on Davidson’s subcommittee, said he has tried drawing attention to housing but the recent collapse of Silicon Valley Bank has taken up most of the lawmakers’ time.

Cleaver, who grew up in a two-room Texas home, has said he is “obsessed with housing because I don’t want a single kid to grow up like I did.” He told the AP he’d been pushing to get housing more at the forefront of Davidson’s subcommittee, but those hopes “went out the window” once SVB cratered.

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“Right now, I don’t see anything that’s going to move us to giving the kind of attention to housing that I think we need,” Cleaver said.

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Cleaver has pushed for expanding tax credits for builders who construct low-income housing, which he thinks could gain bipartisan support and help tackle the ever-widening housing supply gap — realtor.com recently estimated the country is short 6.5 million homes. But, he said, the partisan rancor in Congress presents a significant obstacle.

“One of the reasons we have not been able to move with the magnitude and mercy that this housing issue requires is because of what is happening in the country all too often nowadays, and that’s a bold and short-sighted political need to divide people,” Cleaver said.

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Dennis Shea, executive director of the Bipartisan Policy Center’s J. Ronald Terwilliger Center for Housing Policy, said he’s still optimistic that Congress will take action, pointing to hearings on affordable housing held by the Democrat-controlled Senate finance and banking committees.

“People from both political parties are hearing about housing affordability problems from their constituents,” Shea said. “This is not just an urban problem or coastal problem. It’s also a Midwestern problem, a rural problem … and I think Congress is aware of that.”

The Bipartisan Policy Center has promoted a series of proposals aimed at increasing housing supply, preserving the existing stock and aiding families struggling with housing costs. Shea highlighted expanding low-income housing tax credits and creating tax credits for low-income families to revitalize homes in distressed communities, saying the measures would lead to 2.5 million new homes over the next decade.

Shea said McHenry, the chair of the House Financial Services committee, is “very plugged in on the importance of affordable housing.”

“It’s just incumbent on us to push housing efforts to the top of the priority list,” Shea said. “That’s our challenge.”

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Lisa Mascaro in Washington contributed.

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