On Wednesday, secretary of the US Department of Housing and Urban Development (HUD) Ben Carson announced a proposal to amend the US Housing Act to raise the rents that low-income Americans who receive housing assistance pay and to remove up-front income exemptions, while allowing public housing agencies to establish new work requirements.
These changes, if Congress approves them, would increase rents for nonelderly residents who are able to work and for people who are elderly or disabled.
Rent increases would result from
- a change from rent calculations based on 30 percent of monthly income to calculations based on 35 percent of monthly income for nonelderly, nondisabled households;
- the removal of income adjustments for child care, medical expenses, and other factors for all households (changing from rent based on adjusted income to rent based on gross income); and
- a minimum rent based on at least a 15-hour work week at the federal minimum wage (effectively, a $150 minimum rent) for nonelderly, nondisabled households and a minimum rent of at least $50 for elderly or disabled households.
Carson’s proposal to raise rents comes during the worst rental housing crisis in generations and as we face a severe shortage of housing assistance. Only one in five eligible households receives any housing assistance, leaving most households struggling to find decent, affordable housing. And although proposed work requirements are framed as measures intended to lift people from poverty, evidence shows they do little toward achieving that goal and that work alone is often not enough to lift people from poverty.
The bill contains other proposals that might harm residents, including
- a change in the definition of “elderly” from age 62 to 65,
- a tightening of the hardship remedy language and process, and
- greater authority to deny an interim recertification of income to reset rent when income decreases.
Currently, tenants must recertify that they are still eligible for assistance every year. The proposed changes would shift this requirement to every three years, which could benefit tenants and reduce the administrative burden on tenants.
Households whose income increases between recertifications will not see their rent increase until their next recertification. But if a household experiences a decrease in income (e.g., from losing a job, becoming disabled, or losing an income earner), the bill proposes making it more difficult for households to receive an interim recertification.
Currently, a family can receive an interim recertification between the required annual recertifications if household income decreases 10 percent. The proposed bill would allow an interim recertification only if income decreases 20 percent or more.
The proposal also deletes language regarding tenants’ ability to request hardship remedies when their expenses increase because of medical bills, child care, transportation, education, or similar costs. Tenants with burdensome expenses related to caregiving, health, or household advancement will need to not only request a hardship exemption but hope to be granted an exemption under the broad “other situations” clause.
The proposal raises questions and offers few answers
Other elements of the bill raise concerns about the potential impact on assisted households. First, the bill makes no mention of a maximum rent. Currently, tenants can choose to pay more than 30 percent of income toward rent to access desired housing or neighborhoods, but they are not allowed to pay more than 40 percent of income. Whether the administration intends to continue this practice is unclear.
Further, the bill identifies alternative rent structures that agencies and owners can establish in place of the standard percent-of-income approach. But there is no mention of a flat-rent option, which has been allowed since 1998. (A flat rent or subsidy amount is based on local market rents and is the same for all households regardless of income.)
Finally, the bill allows agencies and owners to require nonelderly, nondisabled residents to work. But the bill does not specify who would be subject to a work requirement (e.g., tenants 18 and older or parents of young children), how many hours they would need to work, or the activities that qualify (e.g., training or education). Instead, it states that the secretary will establish the details through regulation.
These proposed changes to the Housing Act raise questions and provide few answers. No evidence shows that raising rents or imposing work requirements will help nonelderly tenants who are able to work achieve self-sufficiency. And increasing rents and changing rent calculations could harm many vulnerable families who depend on HUD assistance to keep a roof over their heads.
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