Carson calls for increased private-market involvement in affordable housing

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HUD Secretary Ben Carson
HUD Secretary Ben Carson

Almost 1.9 million very poor older adults who do not receive government subsidies have difficulty paying their monthly rents, and many may be living in substandard housing, according to a new report to Congress released Wednesday by the U.S. Department of Housing and Urban Development.

HUD Secretary Ben Carson used release of the report, “Worst Case Housing Needs,” to call for more private-market involvement in affordable housing.

“After years of trying to keep up with rising rents, it's time we take a more holistic look at how government at every level, working with the private market and others, can ease the pressure being felt by too many unassisted renters,” he said in a statement. “Today's affordable rental housing crisis requires that we take a more business-like approach on how the public sector can reduce the regulatory barriers so the private markets can produce more housing for more families.”

In 2015, HUD said, 1.85 million elderly very low income renters had “worst-case” housing needs, an increase of 382,000 since 2013. The number represents 39.8% of very low income renters in that age group, a 2.6-point increase from 2013, according to the report.

The agency defines renters with worst case housing needs as those with very low incomes (below half the median in their areas) who do not receive government housing assistance and who either pay more than half of their monthly incomes for rent, live in severely substandard conditions, or both. It defines elderly households as those having a head of household or spouse who is at least 62 and having no children aged fewer than 18 years living there.

Relative to other household types, worst-case needs grew more rapidly among elderly households, according to HUD, with the South and Northeast being the regions with the highest number of very low income older adults with worst-case needs.

The National Low Income Housing Coalition responded to Carson's remarks by stating that the private market is not a complete solution to challenges facing very low income renters.

“While fewer regulatory barriers to housing production would help in high-cost markets where the rental supply is tight, the private market will never provide sufficient housing for the lowest income households,” NLIHC President and CEO Diane Yentel said in a statement. “Without housing assistance, what these families can afford to pay in rent is virtually always too low to cover the costs for the private market to serve them.”

Yentel called on Congress to increase funding for rental housing assistance and for other programs designed to serve all types of the lowest income households, such as the national Housing Trust Fund, pointing out that HUD budgets proposed by the Trump administration for fiscal year 2018 would cut housing assistance.

“With modest reforms to the mortgage interest deduction, a $70 billion per-year tax expenditure that mostly benefits higher income homeowners, we could help 25 million low and moderate income homeowners and generate $241 billion in savings over 10 years to invest in affordable rental housing solutions for those with the lowest incomes,” she said. “We can solve the affordable housing crisis in America with no additional cost the federal government. We just need the political will to do so.”

LeadingAge also has expressed concerns with the level of housing assistance in the proposed 2018 budget.

The HUD report uses data from the 2015 American Housing Survey conducted by the U.S. Census Bureau. It also estimates housing needs for select metropolitan areas across the country and reports data related to other household types, urban and suburban locations, and racial and ethnic groups.

Article updated Aug. 10 to include comments from NLIHC.

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