U.S. taxpayers fund more than 160 overlapping federal housing programs at an annual cost of more than $50 billion, but America still has too few homes for low-income families, according to Senate Budget Committee Chairman Sen. Mike Enzi (R-Wyo.).
“We should undertake a serious, bipartisan review to find improvements to the system and identify solutions and gather ideas about reform. This will allow these programs to work better for those who truly need them.”
But it quickly became clear that Republicans and Democrats on the panel have starkly different views of how the federal housing effort should be reformed.
Sen. Chris Van Hollen (D-Md.), filling in for the panel’s ranking minority member, Sen. Bernie Sanders (I-Vt.), who was unable to be present, said streamlining federal housing efforts to make them more efficient wouldn’t be enough to avoid a housing crisis.
“I know that the ranking member agrees that to the extent that we can find efficiencies in the federal housing program, we should do so, because we want to make sure the resources being provided travel just as far as they can go in terms of achieving affordable housing,“ Van Hollen said.
“I think it is also fair to say, and I think there would be broad agreement on this, that even if we squeeze every dollar of efficiency out of the current system, we’re still going to have an affordable housing crisis.”
Van Hollen said that 18 million American families must pay more than half of their monthly income on housing, and he said there’s a shortage of at least 7.5 million affordable homes for low-income families.
“That leaves very little for other essentials like food and transportation and health care, much less the ability to put aside and sock away a little for getting ahead in making other important investments,” he said.
Enzi said he called the hearing because dealing with housing problems has been a particular concern of his since his public service career began after being elected mayor of his home town of Gillette, Wyoming.
“I have worked on more and better housing for people since 1975. I was mayor of a small boom town,” Enzi said, noting that affordable housing was an especially critical need for workers employed in the oil and coal industries in his area.
“Since coming to the Senate, I have been able to raise my interest to a new level, but I am appalled at how little progress we have made. We appear to be an employment agency for thousands of federal workers.
“Competing regulations, duplication, and bureaucratic turf protection keeps people from having homes.”
Daniel Garcia-Diaz, a Government Accountability Office (GAO) managing director for Financial Markets and Community Investment, told the committee, “As you know, the government’s system of housing programs, tax expenditures, and other tools is exceedingly complex and fragmented.”
He estimated that only 30 percent of all low-income families that need housing help have been reached by the federal effort.
“Long waiting lists for public housing and voucher assistance are a chronic problem across many communities. In our 2020 report, we found that affordability has declined for a variety of reasons, including that the supply of low-cost rental units has not kept up with demand, more renters competing for the same units, and income not keeping up with housing costs,” Garcia-Diaz said.
Numerous opportunities to consolidate duplicative programs have been identified by GAO, he said, although many of them would involve “trade-offs that need to be considered.”
Dr. Edgar Olsen of the University of Virginia told the committee that “low-income housing assistance is fertile ground for reforms that would provide better outcomes for the money spent. Most current recipients are served by programs whose costs are enormously excessive for the housing provided.”
At least two-thirds of the poorest families in America don’t benefit from the present federal housing program, he said, while others with the same incomes receive large subsidies.
Olsen said “offering modest assistance to all of these families would not only eliminate this inequity but would also largely end homelessness and evictions.”
He encouraged Congress to “phase out cost-ineffective programs in favor of the cost-effective housing voucher program. This would enormously simplify the system of low-income housing assistance.”
Federal housing vouchers provide recipients with a subsidy they can use toward the rental of housing wherever they find it and choose to live. But most federal housing assistance dollars go to pay for construction, renovation, and maintenance of housing projects.
“The simplest approach to providing housing assistance is to provide a subsidy to the people we want to help that is conditional on occupying housing meeting certain standards,” he said.
