But with nearly 3.3 million families with children living in “worst case” situations — spending more than half their incomes on housing or living in hazardous buildings — more must be done to create affordable housing, through rehabilitation or new construction.
For starters, that means finally putting money into the National Housing Trust Fund, which was created by Congress in 2008 but was never financed because of the recession. This should be an early order of business for the new Congress. The fund, modeled on successful state programs, would provide subsidies and incentives to preserve, rehabilitate and build housing, primarily for extremely low-income families that earn about 30 percent of the average median incomes in their areas, typically spend more than half their incomes on rent and are disproportionately at risk of slipping into homelessness.
One of the problems with affordable housing projects generally is that they often segregate the poor. The trust fund would encourage healthy, mixed-income communities. For instance, a development of mainly market-rate apartments that set aside, say, 10 percent of the units for low-income families would receive a subsidy proportionate to that investment. In addition to creating housing for the poor within sound communities, the fund would stimulate construction of multifamily rental buildings at a time when they are greatly needed.
When Congress set up the trust fund, the initial financing was supposed to come from contributions by the federally backed mortgage giants Fannie Mae and Freddie Mac. That plan was suspended when the companies crashed. But with the two back on their feet, housing advocates are rightly pressing the Obama administration to reinstate that arrangement.
Other ideas for underwriting the fund are circulating in Washington. A bill introduced by Representative Keith Ellison, Democrat of Minnesota, would turn the mortgage interest tax deduction into a tax credit aimed primarily at low- and middle-income homeowners. It would also lower the cap on mortgages that receive a tax break to $500,000 from $1.1 million. Some of the savings would be redirected to the trust fund.
The administration embraced the goal of funding the trust fund as part of its 2010 homelessness program. But it has yet to spend serious political capital extracting the money from Congress. It is should do so this time around, lest this creative idea never come to fruition.
Editorial on The New York Times