Can the United States End Housing Instability among the Poor?
Housing worries dominate the lives of millions of U.S. households. At present, 11.8 million renter households spend more than half of their income on housing, and more than 2.8 million renters think their household will likely face eviction in the next few months. Yet housing instability rarely entered the national dialogue until the publication of Matt Desmond’s Evicted.
Now, the editorial board of the Milwaukee Journal Sentinel has endorsed a right to housing. As they describe it, the United States can deliver on this right by “expanding the federal Housing Choice Voucher Program at a cost of $22.5 billion, providing tenants with legal representation in civil court when they face evictions, providing tax credits, and creating more affordable housing units.”
To continue the conversation about the book’s implications for housing policy, How Housing Matters asked a group of experts to weigh in. Contributing to this conversation are as follows: Chris Herbert, managing director, Harvard Joint Center for Housing Studies; Chris Estes, president and CEO, National Housing Conference; and—as a joint response—Saneta deVuono-powell and Allison Allbee of ChangeLab Solutions.
How Housing Matters: Matt Desmond’s book Evicted shows households paying well beyond 70 percent of their income on rent. Sometimes, paying the rent leaves just $1 or $2 left per day for the whole household. Desmond recalls not initially believing the calculations. Were you also shocked by these cost burdens? And how would you change the conversation—or the measures of housing instability—to make the severity of the national problem more palpable?
Chris Herbert: Since a staple of the Joint Center for Housing Studies research is to document the extent of severe housing cost burdens, I can’t say I was shocked by the magnitude of cost burdens among the families profiled in Evicted. Still, Desmond’s description of what these burdens mean for the day-to-day lives of the families he profiled was a stark reminder of the flesh-and-blood stories behind these facts, which you can lose track of when staring at tables showing that there are some 6.9 million households earning less than $15,000 in this situation.
How we change the conversation to bring greater attention to the need to respond to the affordable housing crisis is a tough question. Telling real-life stories as in Evicted should help. But the danger is that we are still largely preaching to the converted. The other part of the story that has to be communicated for those who aren’t compelled by these stories is that not offering housing assistance is even more costly. To that end, spreading the word about the initial findings from the Family Options study would help. The results show that giving permanent vouchers to homeless families is no more expensive than the current patchwork of assistance they get and is much more beneficial for the families across a host of dimensions. So if people aren’t compelled to act by their hearts, maybe they will be by their wallets.
Chris Estes: I wasn’t shocked. We’ve been tracking this trend in reports like Housing Landscape and Paycheck to Paycheck too long for this to be a surprise. I do think the public has stopped seeing folks spending more than 30 percent of their income on housing as a problem. It is difficult to imagine what life is like for someone whose entire income essentially goes to keeping a roof overhead, so we still need to figure out how to talk about this because it is a crisis.
I think when we talk about people living in extremes of poverty, we tend to frame the issue in a way that inadvertently casts them as the “other.” When we advocate for affordable housing, whether it’s with local elected officials or across the dinner table, we need to make clear we’re talking about real people with real concerns. In the end, no matter our income, pretty much all of us want the same things: a good life for our kids, rewarding work, healthy and welcoming communities. Systemic issues in our economy and society have made it so that it’s really tough for some of us to achieve those goals. It’s going to take systemic, policy-level change to ensure everyone has access to quality housing in communities of opportunity.
Saneta deVuono-powell and Allison Allbee: Unfortunately, the numbers are not shocking. When we talk about poverty, much of the data we use to define the living conditions of poor families in the United States fail to capture the daily realities of the most vulnerable individuals and families. The numbers in Desmond’s book point to how key it is for us to disaggregate the financial resources and burdens that poor people face and tell the stories of what living in extreme poverty looks like. Until we really understand what sorts of choices poor families in this country are grappling with, our policy interventions are likely to be inadequate. This is why work like Desmond’s is so important. We can further this conversation by talking more about poverty and what it looks like in this country, as well as by collecting better information, especially at the local level, because costs and resources in this country are widely divergent.
HHM: Desmond argues that the United States can deliver on a right to stable, decent, and affordable housing, but has not chosen to deliver a response that is big enough to match the problem. What might a “big enough” response look like?
Herbert: Desmond’s proposal to make housing assistance for those with extremely low incomes would certainly be a start toward a “big enough” response. The Bipartisan Policy Center’s Housing Commission actually made a similar proposal and hired Abt Associates to estimate what such a program might cost. They found that it would cost an additional $22.5 billion to extend housing assistance to all households earning less than 30 percent of area median income under assumptions about what the take-up rate would be for such a program. While not a trivial amount of funding, it is small compared to the tax expenditures associated with the mortgage interest deduction and doesn’t factor in cost savings elsewhere from fostering much greater housing stability.
Such an effort would only be a start, however, as it would still leave millions of families earning more than this income cutoff still wrestling with severe cost burdens. The estimate also assumes that large shares of households would not take up the assistance for a host of reasons—including many of the problems confronting the families portrayed in Evicted.
Estes: A response that is both “big enough” and practical is one that has to come from all levels of government, and not just the “housing” parts, working with the private sector. At the federal level, steps like the expansion of the low-income housing tax credit and full funding of public housing, rental assistance, HOME, and the National Housing Trust Fund are essential solutions. State and local government investment in dedicated funding for housing trust funds, as well as land use prioritization, have seen great success.
We also need solutions that make more and better housing possible at lower cost by reducing the elements that drive up costs. Changes to land use to allow for more compact development and mixed-income housing are high on the list, as are other changes to zoning, permitting, and other rules to make development less expensive. Communities have addressed eviction directly as well. For instance, Washington state housing advocates just achieved new bipartisan legislation that keeps eviction proceedings off tenants’ screening reports if the tenant prevails in court or was wrongfully named. Eliminating this unnecessary barrier to the rental market could help more than 22,000 Washington households per year by some estimates.
deVuono-powell and Allbee: While the scale of the housing crisis facing this country requires strong federal action, responses in different jurisdictions need to attend to the distinct housing and populations needs of the region. Currently there are a variety of policies being implemented in cities across the U.S. that are very innovative and important, but lack of federal support and/or state preemption constrains local action. Universal vouchers, if adequately funded to meet housing costs, would address some issues, as would expanding tax credits for affordable housing development.
But providing stable, decent, and affordable housing means different things in different areas of the country. The federal government has a special role to play in protecting the rights of tenants and incentivizing the private sector to continue to produce affordable housing, while cities and counties have particular roles to play in the enforcement of housing rights, ensuring equitable access to housing, and preventing excessive evictions. The federal government has shown that it can deliver real solutions and it should be addressing this in a way that doesn’t lock poor communities into substandard or high-cost housing.
HHM: Many of the renters profiled in Evicted don’t fit the profile of the deserving poor. The stories include bad financial decisions, drug use, criminal activity, and sometimes choosing not to even look for work because disability payments are more reliable than low-wage jobs. Yet their housing status is so desperate that it’s hard to imagine having more of an incentive to work.
What’s the evidence about the likely effect of a universal housing voucher on work effort and destructive behaviors? And what policy solutions would you propose to ensure that a right to housing does not lead to unintended consequences?
Herbert: The initial findings from the Family Options study referenced above show that having stable housing is associated with some reduction in domestic violence, substance abuse, and family dissolution. This is consistent with Desmond’s argument that housing instability is both a cause and consequence of poverty and the behaviors associated with it. But the study also finds that the likelihood of working for pay is reduced among those with permanent housing support relative to other supports. However, these results only cover a short period of time after receiving assistance, so it’s possible that housing stability might increase employment over a longer period of time. Still, even if work effort is reduced by subsidizing housing costs, it could be argued that some loss of work effort is a fair exchange for the other benefits that result.
Estes: It’s natural to look on those stories with some judgment, and to be concerned about unintended consequences. But when we look more deeply at the research into the effects of persistent poverty on the brain, we see that years spent facing the toxic stress of poverty really change brain processes and cement patterns of thinking due to the pressure of constant financial crisis. This can result in a very short-term focus and poor decision making overall. It’s like how we all know that when driving on ice we should turn into a skid, but that panic instinct tells us to crank the wheel the other way—and for many people living in poverty, the road is always icy. Housing solutions like the Housing First model and other service-enriched options, as well as the Family Self-Sufficiency program, comprehensively help the whole household move out of poverty. Since low-wage jobs are a now reality of life for many, programs like the Earned Income Tax Credit create a real incentive to work, even when a living wage is not available.
deVuono-powell and Allbee: The notion of the deserving poor is incredibly problematic. While people may make poor choices, to suggest that they somehow deserve to suffer in poverty and impose that suffering on their children and community runs counter to public well-being. Focusing on how to make “good” choices more attainable and available is a more useful frame. From this perspective, it seems that most of the unintended consequences of a right to housing would be positive. Housing stability reduces stress and gives individuals and families opportunities to make healthier choices. When people have money left over after paying for housing, they can pay for health care, food, appropriate clothing, child care, and transportation. In countries where housing is more public or subsidized, the evidence suggests that problems arise more from how well programs are funded and who participates than from the provision of housing itself.
HHM: If present trends continue and rental subsidies don’t rise to meet the size of the problem, what improvements are possible to improve access to stable, decent, and affordable housing for America’s poor?
Herbert: There’s no getting around the simple calculus that the nation’s poorest households simply don’t have enough income to cover the costs of privately supplied housing. For those working year round at the federal minimum wage, annual incomes are only about $15,000. Monthly housing costs would have to be $375 to only use up 30 percent of their income. There isn’t a market in the country where the private market can supply housing at that cost. The situation is even more dire for those earning less, such as the families in Evicted relying on public benefits alone. And without greater public intervention, the problem is only likely to grow.
In a joint effort with Enterprise Community Partners, the Joint Center assessed how demographic trends are likely to affect future trends in the number of severely cost-burdened renters under different assumptions about growth in incomes and rents. The bottom line is that under the most plausible situation where rents and incomes grow at the same rate, we are likely to see an increase in the number of severely burdened renters from 11.8 million to 13.1 million over the next decade. Even if incomes outpace rents by 1 percent a year, we would expect to see only a modest decrease in severe cost burdens. In short, absent greater public support for rental assistance, the problem is only likely to get worse.
Estes: Eventually, I hope we can see more federal investment in affordable housing and more farsighted, structural thinking on housing policy at all levels of government. Rental subsidy trends aside, there are important innovations at the national level we should note. The Rental Assistance Demonstration is seeing some good early results, though there is room for improvement as it evolves. And the Affordable Care Act and recent reforms to Medicaid have created incentives for collaboration between health care and housing, which opens up new opportunities—and funding—for housing. We also have hope for tax reform and housing finance reform proposals in the next couple of years that could expand financing opportunities for multifamily affordable housing.
At the local level, we see communities using a variety of approachesto preserving existing affordable housing, leveraging growing markets to make more new affordable housing available, and creating new funding sources to supplement limited resources. So many good solutions are in process today. It’s essential that organizations like the National Housing Conference and resources like How Housing Matters tell these stories of success.
deVuono-powell and Allbee: We need to be doing more to improve access to stable, decent, and affordable housing for all residents while continuing to combat poverty in the U.S. Research shows that increasing the minimum wage, providing universal child care, and greater food subsidies are other policies that would prevent poor people in the U.S. from having to choose between paying rent and providing other basic necessities for their families. We also should be thinking critically about how we define poverty and what that definition does and does not capture. In 2015, a single parent raising a child on an income of more than $16,020 would be ineligible for many federal programs, despite the fact that surviving on that amount of money would be difficult in most housing markets.
HHM: What other thoughts or reactions would you like to share?
Herbert:Desmond points to two principal policy responses to address housing instability: a universal voucher program for the poorest households and universal access to legal assistance for those facing eviction. While both ideas have a lot of merit, a range of other policy responses come to mind. For example, given the picture he paints of landlord behavior in the private market, I found it surprising he didn’t advocate for more public and nonprofit ownership of rental housing where exploitation of the poor should be less likely. We ought to consider how housing policy could be used to support ownership of low-cost rentals by less exploitative owners, whether public, nonprofit, or for-profit.
Also, given the very low cost of housing in Milwaukee, the book raised for me the question of whether homeownership supports should also be considered as a means of fostering greater housing stability—particularly for those who are not among the poorest of the poor. The millions of foreclosures that have occurred since the housing crash commenced roughly a decade ago have meant that support for low-income homeownership is rarely discussed. But Evicted clearly demonstrates that foreclosures are not the only way that the poor face displacement, while homeownership protects against rent inflation and can give more control over housing quality.
Estes: Where and how people live is as important as how much housing costs. Housing is an essential element of creating opportunity for people, because location and access are so important for education, employment, safety, services, healthy food, and other things. Public and private investments in housing can create economic opportunity in neighborhoods and better connect people to jobs, education, better health, and more. Housing assistance can also help those who choose to move to find better options elsewhere. But there are too many people and too many places in this country for just one solution to work, and housing solutions alone will not solve everything. We need to invest in many ways to improve neighborhoods and change through choice the longstanding patterns of residential segregation that have limited opportunity for us all for too long.
Note: This article was updated with additional links on March 17, 2016.