Congress must dampen inflation by making housing more affordable
Americans are feeling the impact of historic inflation and rising rents are the main driver. The price of housing is by far the largest category in the consumer price index and one of the biggest contributors to the inflationary pressure that squeezes all households, especially those with the lowest incomes. By restarting negotiations on a major spending package, Congress and the Biden administration have a crucial opportunity to fight inflation and ensure the poorest and most marginalized people in the United States can get and stay housed. stably.
Even before the pandemic, millions of households struggled to keep a roof over their heads, always one financial shock away from falling behind on rent and being threatened with eviction and, in the worst of case, to find themselves homeless. Then came COVID-19. In August 2020, according to the best available data, as many as 12 million households were at risk of losing their homes without immediate government action. Many were among those already struggling to pay rent when the pandemic led to sudden job losses, reduced working hours and higher costs for healthcare, childcare and the internet. . Advocates sounded the alarm, and federal, state and local governments took notice, providing unprecedented resources and protections to keep tenants housed.
Emergency rental assistance and moratoriums on evictions were essential protections. Yet they offered only a temporary fix to the gaping holes in our social safety net. Today, as pandemic-era tenant protections expire and resources run out, tenants face a housing market upended by runaway inflation. Last year, the cost of rent increased by an average of 14% nationally, with some cities seeing rent increases of up to 40%. Rents are expected to rise another 10% this year. These price increases affect tenants of all incomes but especially threaten tenants with the lowest incomes.
Soaring rents are partly a consequence of the severe shortage of affordable housing for the lowest income tenants. There is a national shortage of 7 million affordable and available homes for extremely low-income renters, and there are less than four affordable and available homes for 10 of the lowest-income households. Not a single state or congressional district has enough affordable housing to meet demand.
Without affordable options, 10 million of the lowest income households spend more than half of their income on rent, depriving them of the resources needed to buy food, buy medicine and make ends meet. Renters need an annual income of nearly $50,000 — or $23.96 an hour — on average to afford a typical two-bedroom apartment. In many parts of the country, they have to earn a lot more. For many working families, seniors, and people with disabilities, incomes like this are completely out of reach.
People of color are disproportionately affected. Black households make up 13% of all households, but a quarter of all very low-income renters and nearly half of homeless people. Latino households, which make up 12% of the total population, account for 21% of very low-income renters and 22% of homeless people. Native Americans are significantly overrepresented among homeless people, and the prejudices are compounded for women of color.
The tragic and preventable results of the housing crisis are visible everywhere you look. Eviction filing rates are rising across the country and, in some communities, are exceeding pre-pandemic levels. When America’s lowest-income renters lose their homes, they have few options available to them. Most double or triple with other families in overcrowded homes. Many become homeless and resort to collective shelters. And every night in America, more than 200,000 people sleep in tents, cars and other places unfit for human habitation.
With rapidly rising rents, worsening homelessness, and millions of families struggling to stay housed, federal investments are desperately needed and long overdue. Congress was poised to provide vital funding through the Build Back Better Act passed by the House of Representatives last year. The bill included historic and targeted investments in housing, including $25 billion to extend housing assistance to 300,000 new households, $65 billion to preserve social housing for its 2 million residents and 15 billion to build 150,000 affordable homes for the lowest income earners.
In December, however, Sen. Joe Manchin (DW.Va.) announced his opposition to Build Back Better and effectively killed the bill. Now the White House, congressional leaders and Manchin have reignited negotiations on a new cut spending bill that would boost federal revenue by raising taxes on corporations and high-income earners, create savings by cutting prescription drug costs and use the resources generated to address the deficit, climate change and inflation.
If these members of Congress and the administration are sincere in their desire to bring down inflation, they should ensure that the new bill includes robust measures to reduce the cost of housing. Congress must retain the critical investments in housing included in the Build Back Better Act — in assisted housing, public housing and the National Housing Trust Fund — in any reconciliation bill final. By doing so, Congress will take an important step in the fight against inflation and ensure that more of the lowest income and most marginalized people in the United States have stable and affordable homes.
Diane Yentel is the President and Chief Executive Officer of National Low Income Housing Coalition.