Last week, the Washington Post reported on a D.C. Fiscal Policy Institute study which found that there are virtually no apartments available on the open market in the nation’s capital that are affordable for low-income households. The number of apartments that rent for less than $800 fell by 42 percent in the last decade, from more than 57,700 in 2002 to 33,400 in 2013; and the number of houses with rents between $800 and $1,000 also showed a significant drop during that timeframe.
But even as we are learning more about the magnitude of the rental crisis in the streets surrounding the U.S. Capitol and across the nation, many Republicans in Congress want to prevent Fannie Mae and Freddie Mac from funding the Housing Trust Fund and the Capital Magnet Fund, two programs that provide resources to help build and preserve affordable housing nationwide.
The Housing and Economic Recovery Act of 2008 directed Fannie Mae and Freddie Mac to place a sliver of their earnings each year into the two funds. But before those contributions ever began, the Federal Housing Finance Agency (FHFA) had to bail out the mortgage giants due to the financial crisis. As part of the rescue activity, FHFA suspended contributions to the funds.
Now that Fannie and Freddie have regained their financial footing, FHFA Director Mel Watt has lifted the suspension and given the go-ahead for the mortgage giants to resume payments into the funds. But for conservatives in Congress, even this small measure of assistance to poor families is too much. When Watt announced his decision near Christmas last year, the Republican-controlled House Financial Services Committee deemed it “a lump of coal to every taxpayer.”
In January, Rep. Ed Royce (R-CA) introduced legislation that would prevent Fannie Mae and Freddie Mac from directing money to the two funds until they are out of conservatorship. The bill is almost identical to one he authored a year ago, which garnered 22 cosponsors, including House Financial Services Committee Chairman Jeb Hensarling (R-TX). As lawmakers deliberate the Republican budget proposal this week, it’s likely we will see efforts to end the Housing Trust Fund and the Capital Magnet Fund resurface.
If members of Congress are ignoring what’s happening right in their own backyard, then they probably are ignoring what’s happening across the country, too. The cliff-dive in rental affordability is not limited to our nation’s capital. Data shows that more than half of all renters in the nation spend more than 30 percent of their gross income on housing (and most extremely poor households pay more than half of their meager incomes), leaving precious little for groceries, medication, transportation, and other necessities of life. For example, in California – Rep. Royce’s home state – there is a serious housing affordability crisis, with average monthly rents about 50% higher than the national average.
Any moves to cut the funding for the Housing Trust Fund and the Capital Magnet Fund ignore the dire need for them across the country right now. Unfortunately, it’s a trend with Congress. Our lawmakers have repeatedly cut rental assistance programs, even though the number of households in worst-case scenarios – living in abysmal housing or having to use more than half of their income on rent – has only increased over time.
Members of Congress should look out their office windows more often, or better yet, visit surrounding neighborhoods – then maybe they would get a clue about our affordable housing crisis. Passing legislation to slash these two funds would not only make the housing situation worse, it would be an insult to hard-working families who are already struggling to make ends meet in every state and district.