100,000 fewer US families receive housing aid due to budget cuts
17 November 2014
The number of families receiving low-income housing assistance has dropped by 100,000 since 2012, as a result of the so-called sequester budget cuts implemented in 2013, according to a study released Wednesday by the Center for Budget and Policy Priorities (CBPP).
2.06 million households received low-income housing vouchers in June 2014, down from 2.16 million households in December 2012. The reduction in aid has taken place even as the need for assistance has increased.
The sequester cuts began on March 1, 2013, slashing $85 billion evenly across all federal programs in 2013 and by approximately $1.2 trillion through 2021. Accordingly, the Department of Housing and Urban Development (HUD) slashed the budget for its Housing Choice Voucher Program by $938 million.
Three-quarters of all state and local housing agencies reduced the number of families they assisted due to sequestration, the CBPP reported. Many state and local housing agencies, which administer federal funding from the Housing Choice Voucher Program, have dipped into their reserves in order to compensate for the federal budget cuts.
Housing vouchers are a proven way of combating homelessness, and the cuts leave this section of the population particularly vulnerable. Over 340,000 veterans, a segment of the population with disproportionate rates of homelessness, depend upon rental assistance to afford housing. 600,000 Americans, nearly a quarter of them children, are homeless or living in a shelter on any given day. More than a million children live either in motels or doubled-up with other families.
“The sequestration cuts have come at a particularly bad time. The number of renter households paying unaffordable housing costs is at historic highs,” noted the CBPP. The number of cost-burdened renters, defined as spending more than 30 percent of their income on housing, has grown rapidly since the end of the 20th century. According to Harvard University’s Joint Center for Housing Studies (JCHS), the proportion of cost-burdened renters jumped by 12 percent between 2000 and 2010, the highest rise for any decade since at least 1960. This reflects a confluence of both rising rental costs and falling income levels: rent rose by six percent from 2000 to 2012, while the median income of renters fell by an incredible 13 percent during the same period.
In 2012, 20.6 million renters were cost-burdened, amounting to nearly half of all renters. This was up from approximately one-quarter during the 1960s, and one-third during the 1980s, according to the JCHS. Furthermore, over half of all cost-burdened renters in 2012, 11.3 million, were severely cost-burdened, or spent more than half of their income on housing. The median renter received an annual income of $31,500 and spent $880 per month on housing costs.
Decent housing is becoming increasingly unaffordable for many. The National Low Income Housing Coalition conducted a study last year, which calculated the average hourly wage necessary to afford a two-bedroom home in each US state. In the most expensive states, the necessary wage was over $20 an hour; in every state, the necessary wage was well above mean wages among renters.
Not even a full-time job is enough to shelter renters from cost burdens. In fact, the biggest rise in cost-burdened renters has been among the fully employed, jumping ten percentage points from 2001 to 38 percent in 2011. 2.5 million full-time workers joined the ranks of cost-burdened renters during that period, 1.4 million since 2007, the year the housing bubble collapsed. According to the JCHS, among those in the labor force, about two-thirds of the growth in cost-burdened renters since the Great Recession has been among the fully employed.
The crisis in affordable housing exposes the widening chasm between the ruling class and the vast majority of the population. While the stock market reaches record highs, fueled by virtually free money from the central banks, tens of millions of Americans find it increasingly difficult to keep a roof over their heads. The response of the government has been to add fuel to the fire by slashing what little assistance is available to the working poor.