Somehow I don’t see this becoming the hot topic for the 2016 election but there’s been a battle brewing under the covers for a few months now over HUD and the question of public housing. It seems that some folks have taken the time to study the situation and discovered that there are people living in these low cost housing units who are earning more than you’re supposed to if you want to live there. What’s that you say? Inefficiency and confusion in a government program? Perish the thought! But let’s see what’s going on here.
This op-ed in the Dallas Morning News lays out the problem.
Like so many, I was shocked to learn that some housing units set aside for low-income families are being occupied by people earning six-figure salaries.
The Department of Housing and Urban Development’s Office of Inspector General took a look at tenants who initially qualified for public housing but now earn more than regulations would allow first-time move-ins.
The resulting report found that more than 25,000 tenants have annual earnings that exceed HUD’s 2014 eligibility limits. Nearly half surpass their local threshold by $10,000 to $70,000. People who were initially approved have been permitted to stay in the subsidized housing even if their income has increased beyond the limit. And there has been no cap on the length of time a tenant can stay.
One problem is that the income thresholds for public housing are locally controlled. (That’s not the “problem” here, but it’s a requirement since the cost of living varies so wildly around the nation.) Also, the local housing authorities set the rules for the most part, and they aren’t even able to kick out people who earn a lot more. But it turns out this is more of a feature than a bug. The Obama administration and HUD actually support the idea, as the New York Times pointed out earlier this month.
Some have begun to ask whether the New York City Housing Authority, with its 178,000 apartments and waiting list of 270,000 families, should be doing more to persuade higher-earning residents to leave, given the dire need for housing, particularly among homeless people. Last month, an audit by the inspector general of the federal Department of Housing and Urban Development recommended that the authority, known as Nycha, and its counterparts in other cities should coax those families out, a move opposed by both HUD and the authorities.
According to the audit, about 10,000 of Nycha’s tenants last year, or about 5 percent of households, earned more than the eligibility threshold for an apartment, which is now $69,050 for a family of four in the city. A family must earn less than the threshold to get an apartment but does not have to leave if it begins earning more. And in fact, New York’s and other housing authorities have encouraged those families to stay, saying they are positive role models and keep the projects from becoming isolated pockets of poverty.
I became more interested in the question because of the inherently outrageous descriptions in the headlines. After all, why should anyone making plenty of money be able to get a cheaper place to live which is subsidized on the taxpayer dime? And to be sure there are cases where that’s no doubt true. The Times article references one family in New York with a family income just shy of a half million dollars per year staying in an $1,100 dollar per month apartment there. (And that’s dirt cheap for that area.) The majority of cases of “over income” are not nearly as bad, though, with most of them being families with incomes that have crept up to less than $10K over the annual limit.
Still, what’s the best use of our public funds here? As an editorial in Government Executive Magazine describes it… it’s complicated.
Crowley said the “massive backlog” in the program that provides funding to public housing authorities for the development, financing and repair of subsidized units is a much bigger issue contributing to the lack of affordable housing and long waiting lists across the country. Crowley also pointed out that once a family in public housing becomes over-income, they no longer receive a subsidy from the government for their rent, paying the unit’s full rent themselves.
Many PHAs count on that money from over-income families to help boost their budgets. While HUD oversees PHAs, they are administered by states and localities, and are similar in structure to a school district. HUD told auditors that if all over-income families were removed from public housing, it would need to request “nearly $116.5 million more in public housing operating subsidies annually,” according to the IG report.
Reading the entire report, this boils down to some fairly basic math. If you live in public housing and your income is down near the bottom of the range, the government has to cut a check every month to subsidize the rest of your rent payment. If you earn near the top of the allowed range (or over) you have to cover the still admittedly low rent yourself. If we kick the high earners out and replace them with new tenants at the bottom of the income scale, the government will have to put up more money. When you combine that with the Obama administration’s penchant for wanting to find ways to mandate the mixing of high and low income people in the same neighborhoods, that’s … a winner?
Here’s a thought. If the low incoming housing is actually for people with low incomes, keep it that way. And put in some meaningful caps and lengths of time where you can live there while you’re at it.