Dive Brief:
- Numerous risks threaten the preservation of the United States’ federally assisted housing stock, which provides crucial affordable housing to the nation’s lowest-income renters, according to a report issued last week by the National Low Income Housing Coalition and the Public and Affordable Housing Research Corporation.
- Risks include the declining physical and financial conditions of such properties as well as insufficient congressional appropriations to keep up with program needs or inflation. The expiration of affordability or eligibility requirements set by federal housing subsidy programs also threatens this housing stock.
- The report's authors call for “major reinvestments” to address public housing’s capital needs backlog as well as reforms to the oversubscribed Low-Income Housing Tax Credit program, the largest source of capital for expanding and preserving the federally assisted housing stock.
Dive Insight:
Federally assisted rental housing relies on subsidies that help housing providers build, operate and maintain affordable homes, according to the report. These federal project-based subsidies support over 5 million homes, or 10% of the nation’s rental housing stock.
The report highlights threats to this type of housing: Although the U.S. added more than 104,000 homes to its federally assisted housing stock in recent years, it lost more than 71,000 such homes. Affordability restrictions are set to expire for more than 374,000 federally assisted homes in the next five years, and about 267,000 public housing homes failed recent inspections, meaning they likely require immediate investment.
The consequences of not preserving this housing stock are higher rents and potential tenant displacement, the report says. “Given the shortage of affordable rental units in the private market, federally assisted rental homes are a vital source of stable housing for extremely low-income renters,” NLIHC’s senior vice president of research and an author of the report, Andrew Aurand, said in a statement.
The report comes as federal, state and local leaders scramble to triage the housing affordability crisis. Many plans to improve housing affordability focus on increasing housing supply, but “affordable housing plans must balance new construction and preservation to reduce the growing shortage of affordable homes available to the lowest income families,” Kelly McElwain, PAHRC manager of research and industry intelligence and one of the report’s authors, said in a statement.
Meanwhile, the House Appropriations Committee released its fiscal year 2025 bill for transportation, housing and urban development in June, with Chairman Tom Cole, R-Okla., saying in a statement that the bill will maintain “affordable and safe housing for our most vulnerable.” A summary of the bill says it will provide full renewal for project-based rental assistance contracts. However, the bill proposes to cut funding for Department of Housing and Urban Development grant programs by $937 million, which is 44% below the fiscal year 2024 enacted level.
