Chairman Reed and members of the Subcommittee, I am Sheila Crowley, President of the National Low Income Housing Coalition. I am pleased to be invited to testify today on behalf of our members who include non-profit housing providers, homeless service providers, fair housing organizations, state and local housing coalitions, public housing agencies, private developers and property owners, housing researchers, local and state government agencies, faith-based organizations, residents of public and assisted housing and their organizations, and concerned citizens. I am also representing the over 2,200 organizations and elected officials from every state who have endorsed the establishment of the National Housing Trust Fund. We are especially grateful to you, Senator Reed, for championing S.1248, the National Affordable Housing Trust Fund Act of 2001, so vigorously.
It is an honor to follow the testimony of Senator John Kerry, the sponsor of S.1248, and to add further evidence of the soundness of his proposal. The National Housing Trust Fund Campaign pledges to continue to build support for S.1248 this session and, if necessary, its successor bill in the 108th Congress. The 27 co-sponsors of the S.1248 including Senator Kerry and the 175 co-sponsors of H.R.2349, the companion bill in the House, are just the start of the number of Senators and Congressmen we intend to convince to vote to establish the National Housing Trust Fund.
This Subcommittee and the full Committee have had several hearings on the housing affordability crisis that have thoroughly documented the depth and breadth of the housing problem we face in the United States. Under Senator Allard’s leadership in the last Congress, the Subcommittee also held hearings that came to the same conclusion. In the House, the Subcommittee on Housing and Community Opportunity of the Financial Services Committee has been quite active its analysis of the affordable housing crisis, with a series of hearings in 2001 and this year. At the National Low Income Housing Coalition, we are very gratified that our data on the gap between housing costs and income are cited virtually every time members of Congress come together to discuss the housing problem. My point is that Congress does not lack evidence that we have a serious housing problem, and there is little disagreement that something needs to be done. What remains is to reach consensus about what needs to be done and the role of the Federal government in its implementation.
Let me add documentation of the problem for the record today. It is the position of the National Low Income Housing Coalition that the housing affordability and housing shortage problem is most severe for the lowest income people. In HUD jargon, these are extremely low income households or those with incomes at or less than 30% of the area median. On a national basis, the number of rental housing units affordable for people in this income range has dropped precipitously in the last decade, while the number of rental housing units for other low income people whose incomes exceed 50% of the area median income, but are still less than 80% of AMI, actually grew. Between 1991 and 1999, the number of rental units affordable to extremely low income households declined by 940,000 units or 14% of the total rental stock affordable to people in this income range.
People often assign meaning to the term extremely low income that somehow implies that it is a category that does not include working people. Let’s be very clear. A full time minimum wage worker makes $10,700 a year. In the District of Columbia, an extremely low income family has income of $18,390 or less a year. In Providence, RI, it is $16,230. In Denver, CO, it is $19,500. In Boston, MA, it is $21,480. These are not unusual wages. These are the wages earned by the workers in the service economy. These are retail clerks, day care workers, home health aids, hotel and restaurant workers, janitors, bus drivers, security guards, nursing home staff – all the people whose daily labor is essential to the functioning of our economy. The notion that extremely low income families are somehow different from working families is erroneous.
In the District, 30% of area median income if one works full time breaks down to $8.84 an hour. The hourly wage required to afford the fair market rent for a two bedroom rental unit in DC is $18.13. In Providence, extremely low income is $7.80 an hour or less, while the two bedroom housing wage is $12.50 an hour. For Denver, the respective numbers are $9.37 an hour vs. $17.17 an hour. In Boston, $10.33 an hour is the upper limit of the extremely low income category, while the housing wage is $20.21 an hour. In all these cases, as it is in all jurisdictions in the country, the difference between what low wage earners can earn and what the rental housing market can demand is unbridgeable without federal intervention. Telling people to get better paying jobs so they can afford to pay the rent is hardly the answer. There will always be a demand for people to make up this segment of the workforce.
The position of the National Low Income Housing Coalition is that there is no single solution to the affordable housing crisis, but rather multiple approaches are required. First we must increase low wage workers’ purchasing power in the housing market with more housing vouchers. But more vouchers must be in conjunction with improvements to the housing market’s response to voucher holders and reducing barriers to successful voucher use. Imagine being on the waiting list for a voucher for several years, all the while struggling to maintain a home that costs an excessive portion of your income. Finally you rise to the top of the voucher waiting list and are issued a voucher. You spend weeks searching for a suitable home to rent with a voucher, only to come to the end of your time limit without finding any place. You have to turn the voucher back and start over again at the end of the line. In many communities, the voucher program has become an exercise in social Darwinism, rather than an intervention in the mismatch between what low income people earn and what housing costs. Therefore, we are very supportive of Senator Sarbanes’ forthcoming voucher improvement bill.
Second, we must preserve as much as possible the existing housing we have that is affordable to extremely low income households, including public and subsidized housing, as well private market, unsubsidized housing. We support S. 1365, Senator Jefford’s preservation matching grant bill, and we urge Senator Kerry to add preservation as an eligible activity of the National Housing Trust Fund. We also are very concerned about the precipitous loss of housing that is affordable to the extremely low income people through HOPE VI and other public housing demolition or revitalization efforts.
Third, we advocate a renewed federal commitment to building housing that is affordable for the lowest income families. Although there has been lots of discussion about "new production" proposals by all sorts of housing advocacy and industry groups, the only proposal that has actually become legislation in the Senate is Senator Kerry’s National Affordable Housing Trust Fund Act. This bill will create a dedicated source of funds for the production and rehabilitation of affordable housing, primarily rental and primarily for extremely low income households. S. 1248 warrants serious review by this Committee.
The National Low Income Housing Coalition and our many partners from across this country have been working hard to educate members of Congress and your constituents about the need for and the merits of a National Housing Trust Fund. This campaign has generated great optimism and support, as evidenced by the over 2,200 endorsements we have received to date. I would like to place in the record the latest list of endorsers, as well as a letter from Cardinal Theodore McCarrick, the Archbishop of Washington, on behalf of the US Conference of Bishops, which was sent to each Senator and House Member urging support of the National Housing Trust Fund.
In the course of discussing this bill in communities across the country and with nearly every Senate and many House offices, we have found great interest and considerable support. We have also heard all the arguments against it. I would like to use my time today to raise and then respond to these arguments.
H.R. 3995, which Chairwoman Roukema has been introduced in the House, acknowledges the need for rental housing production for extremely low income households by creating a more deeply targeted component of the HOME program. This is a concept that deserves consideration. However as proposed, H.R. 3995, does not provide for new funding, but rather uses recaptured Section 8 funds. We strongly object to this redirection of Section 8 funds, and much prefer the approach suggested in Senator Sarbanes’ bill that will improve the voucher program so that there are no longer any funds to recapture because all are being used for their intended purpose.
Please note that it is our position that the National Housing Trust Fund should not rely solely on the FHA and Ginnie Mae programs as the dedicated sources of revenue. Indeed, these are insufficient to meet the goal of 1,500,000 homes in 10 years. There are 280 state and local housing trust funds across the country, funded by a wide range of sources. We see the FHA and Ginnie Mae as making some, but not all, of the contributions to the trust fund. We are interested in working with you to identify other appropriate sources of dedicated revenue streams.
Not only can we afford to do this, more importantly, we cannot afford not to. The consequences of failing to act are serious. Good housing is fundamental to healthy human development. We have growing evidence that housing instability has adverse effects on employment success, school achievement, health status, and family well-being. Excessive housing cost burdens are the primary cause of housing instability. Housing instability means frequent moves, family disintegration, staying with relatives, lack of a permanent address, inability to hold onto possessions, and in the most serious cases, falling out of the housing system altogether and become homeless. Once homeless, regaining stable housing is even more difficult.
Because most of us enjoy good housing that we can afford in neighborhoods of our choice, we take housing for granted and find it difficult to empathize with people with housing problems. However, we all tacitly know how central our housing is to our physical and emotional well-being, to our ability to fulfill our family obligations, and to our capacity to do our jobs. Imagine not having a regular and safe home. How well would any of us do at what is expected of us in the absence of the security, respite, comfort, and sanctuary that our homes provide?
Thank you for the opportunity to testify today. We looking forward to working with the Committee on S. 1248, the National Affordable Housing Trust Fund Act.
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