Stimulus Should Invest in Housing For Low-Income Families
Like hundreds of other organizations, the National Low Income Housing Coalition has met with all the right Hill, transition team and administration offices since last fall to impress upon decision-makers how investing in housing programs for the nation’s lowest income people not only will create jobs but will also provide affordable housing for people who need it the most. Some needed funding for housing programs is in the House or Senate package, or both.
But our blood got to the boiling stage when on February 4, the Senate passed by voice vote and with no debate a home buyer tax credit that will cost an estimated $35 billion. The credit would be available for the purchase of a principal residence during the one-year period that begins on enactment of the American Recovery and Reinvestment Act, and could be taken by the taxpayer over two years. The amount of credit a home buyer could take would be equal to 10 percent of the purchase price, up to $15,000.
The inclusion of this provision came amidst calls to include housing solutions in the package, since insufficient and inefficient housing policies got us into our current economic mess in the first place. It turned out that by “housing,” however, these calls were for a particular type of housing, tax credits to support homeownership. These tax credits will not stimulate jobs as these houses have already been built, and have already been priced way out of reach of the lowest income households.
Even more infuriatingly, the credit will do nothing to help the lowest income households, those who are hurting most as a result of this crisis. There is no upper income limit on who is eligible for the credit, nor on the purchase price of the house. It is not a refundable credit, so to take full advantage of it, a taxpayer must have sufficient income to have that high a federal tax liability. A household would need an income of more than $81,000 to take advantage of the full $7,500 credit each year for two years.
The open statement we’re circulating, What We Mean By Housing, is a counter-point, a way to explain what the low income housing community means by housing and to communicate to Congress and the Administration that rental housing programs for the nation’s lowest income people are getting short shrift in the economic recovery package, especially when compared to the $35 billion tax credit. The Senate’s economic recovery funds for low income housing programs total about $11.2 billion.
As the statement says, “When we compare the attention paid to homeownership in the bill to the resources provided to programs serving the nation’s most vulnerable people, we are dismayed and disappointed that those households for whom stable homes are most threatened in today’s economy have been largely overlooked.”
We hope that the conferees attempt to seek balance in the bill’s housing expenditures. An investment of $10 billion into the new, but unfunded, National Housing Trust Fund could quickly allow the construction of shovel-ready apartments that are affordable to the nation’s lowest income people. The nation would benefit from the new construction jobs, we’d have much-needed affordable housing units and we’d be doing something to stop the forthcoming surge in homelessness that is anticipated as more people fall below the poverty line.
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