Ben Carson, the Secretary for the US Department of Housing and Urban Development (HUD), recently unveiled a new proposal that would increase the rent amount low income recipients would have to pay for housing subsidies and would require that those recipients work in order to receive those subsidies.
Currently, HUD tenants pay 30% of their adjusted income toward rent or a public housing agency. That 30% is capped at $50/month for the poorest family recipients.
Carson’s administrative proposal sets a family monthly rent contribution at 35% of gross income or 35% of earnings working 15 hours/week for a federal minimum wage. This 35% is capped at $150/month or 3 times the contribution amount currently required. HUD estimates that some 175,000 families would be affected by this new proposal.
Carson’s HUD proposal would also allow/enable public housing agencies and property owners to impose work requirements on tenants receiving housing subsidies. The only people exempted from this proposed work requirement would be those 65 years of age or older and those with disabilities.
Right now, some 15 housing authorities in 12 states require recipients of housing subsidies to either work or be in job training in return for subsidy benefits. In both Atlanta and Charlotte, NC, at least one adult member of a household is required to work a minimum of 30 hours/week. In Chicago, all able-bodied recipients are required to work a minimum 20 hours/week to receive housing subsidies.
HUD estimates that more than 50% of the 4.7M families receiving housing subsidies would be affected by this new proposal.
Carson’s proposal also eliminates all medical and child -care cost deductions when determining the tenant’s rent. (Not only would recipients be required to pay a higher percentage of their rent and to work x number of hours per week, recipients would no longer be able to deduct their medical and child care costs.)
Lastly, Carson’s proposal would require that recipients verify their income status every three years rather verifying their income status annually as they do now.
In his announcement of this proposal (that must be approved by Congress), Carson said, “There is one inescapable imperative driving this reform effort. The current system isn’t working very well and…it’s clear from a budget perspective…that the current system is unsustainable…”
On the other hand, there are currently 7.2M fewer “affordable and available” housing units needed nation-wide for extremely low-income households, according to the National Low Income Housing Coalition. Nevada alone has an 85% shortfall of affordable units and, across the country, there is a 7-year waiting period for affordable housing.
Is now really the time to propose increased rents for very low income people when, according to Harvard University’s latest report on rental housing, there is insufficient supply for increasing demand and some 43% of very low income households currently pay +50% of their earnings on rent or “live in severely inadequate housing units?”