Policy

House Subcommittee Votes to Eliminate Housing Trust Fund

A House subcommittee voted to stamp out the National Housing Trust Fund this week, signaling a very difficult road ahead for fund advocates. Of course, the fund, a flagship objective […]

A House subcommittee voted to stamp out the National Housing Trust Fund this week, signaling a very difficult road ahead for fund advocates. Of course, the fund, a flagship objective of the National Low Income Housing Coalition, has never actually been capitalized, and this latest development could prolong the three-year effort to support the fund — the only federal program designed to exclusively serve the housing needs of very low-income people.

Earlier this year, Rep. Ed Royce, a California Republican who sits on the Capital Markets and GSE subcommittee of the House Financial Services committee, introduced H.R. 2441, the Housing Trust Fund Elimination Act, and characterized NHTF as a “slush fund for special interest housing groups.” Royce's characterization of the fund, it should be noted again, preceded any actual implementation, as he warned that the fund might create “great potential for fraud.”

NLIHC President and CEO Sheila Crowley has argued in the past that the trust fund — created in 2008 as part of the Housing and Economic Recovery Act of 2008 — and its goal of ending the shortage of affordable homes for the lowest-income Americans “is a proper role for government,” in that the private housing market “will not fill this gap.” In a statement, Crowley refuted Royce's claims:

“This is a tired argument with no basis in reality. The National Housing Trust Fund is, in fact, the only federal program that will exclusively serve the housing needs of the lowest income people in the United States. There is great need for the program, and regulations have been put in place to ensure efficiency and accountability.

“It is disappointing to all of us who understand the pervasive housing need in this country to see lawmakers vote to eliminate a program before it has even been given the chance to work.”

The subcommittee, which voted along party lines — 18-14 — to eliminate the fund, also rejected an amendment put forth by Rep. Al Green, a Texas Democrat, that would have preserved the NHTF but would have separated it from the housing GSEs, the original funding source for the NHTF as stipulated in HERA. According to NLIHC, “In introducing his amendment, Mr. Green noted that ‘slashing programs that benefit poor people will not make them go away.'”

The fight for a National Housing Trust Fund has carried on for many years and and will very likely continue, but at a time when there is a high need for affordable housing production, and with HUD reporting in its Worst Case Housing Needs 2009 that upwards of seven million renters experience worst case needs, that is, very low-income renters with incomes below 50 percent AMI who do not receive government housing assistance and who devote more than half their income to pay rent, this is bad news to say the least.

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