The Free Press, Mankato, MN

January 26, 2014

Our View; Affordable housing key to homeless

Why it matters: Innovative housing solutions could lift homeless out of poverty

The Mankato Free Press

---- — From a strictly economic perspective, we subsidize the housing of wealthy and upper income folks arguably more than we do the homeless and those in poverty.

The home mortgage deduction is considered among the most costly tax deduction or “tax expenditure” on the federal books, costing the U.S. treasury about $70 billion per year. We spend about $17 billion a year on subsidized housing for low income people.

So, it's not only fair to do something about housing for the homeless, it makes economic sense. Affordable housing programs give the homeless the one critical step up to self- sufficiency and out of poverty.

As detailed in the “No Direction Home” series in The Free Press published in December, the Housing Choice Voucher program, or Section 8, has been cut across the country and across the state of Minnesota. It generally provided low income people with funds to pay two-thirds of their usual market rate rents. Recipients are expected to pay a third of the going rent for housing. It allows people who get even a very low-paying job to have a roof over their head and some stability in their living situation.

Minnesota stands to lose 3,200 so called vouchers by the end of the year, according to a report in the Star Tribune. The sequester has cut back the number of vouchers Mankato has by 4 percent from 425 to 406. The city doesn’t even take names for a waiting list because supply is so short.

Minnesota Valley Action Council, which serves counties surrounding Mankato, has a 12-15 th month waiting list for its program. Officials say they there is a need that is threefold the current allocation. There are a number of other housing assistance programs that provide temporary payments to someone needing to stay in their dwelling, but those are also taxed.

More and more MVAC housing advisers are telling people they have to find a quiet place to park their cars and sleep there in the absence of other available programs or funds.

And finally, low income housing projects were being built to meet these demands a few years ago. There were federal tax credits to developers to build apartment buildings and for at least the first few years were required to offer affordable rents. Those programs also appear to have dried up.

The solutions to many of these problems do not involve rocket science. A good share of the sequester cuts have gone away with the recently enacted budget deal in Congress signed recently by President Obama. But it does not appear any of the cuts aimed at housing were reduced.

The solution, of course, is to re-prioritize some of the funding where cuts were restored. The four main areas included infrastructure, early childhood education, jobs programs and scientific research. All are worthy programs, but the cuts to the subsidized housing are throwing hundreds of thousands of people out of their subsidized apartments and drying up the supply for a growing need, according to the Center on Budget and Policy Priorities in Washington, D.C.

So Congress could act to re-direct some of that funding or restore the cuts that have already taken place to housing programs, which would be politically palatable to those who would like to see no increase in spending. Restoring billions would get us back to the level of spending of a few years ago.

It’s worth consideration to bring back subsidized housing tax credits for developers. In Mankato, that program provided a big boost in such housing for several years, but officials note when it ended, developers raised rents to help pay for their projects.

There is a history of bipartisan support for affordable housing to help the homeless. Back in 2004, Republican Gov. Tim Pawlenty put forth a major initiative to eliminate homelessness in Minnesota.

The facts are in our hands. Homeless and those attempting to avoid being homeless need assistance that has been cut. In the end, funds to set up shelter and assist these folks to gain self-sufficiency will save taxpayers in the long run and be a solid investment in human capital.