Policy: Housing

What We Know about Housing

• 90,889 units of emergency shelter, transitional housing, and permanent supportive housing are available for families.
• Most people on public housing and Section 8 waiting lists are families with extremely low incomes. It is likely that many of them have experienced or are currently experiencing homelessness.
• 38 states have state housing trust funds.

As previously discussed, a significant shortage of decent, affordable housing afflicts our nation. We have chosen several indicators that reflect state efforts to respond to both the emergency and long-term housing needs of children and families. According to the Annual Homelessness Assessment Report 2007, our nation’s capacity to house people who are homeless increased six percent between 1996 and 2005.¹⁰⁴ Despite these gains, we still fall far short of the supply needed to ensure that no one is left without a place to call home.

Emergency shelter, transitional housing, and permanent supportive housing slots address a state’s ability to house families in need. Emergency shelters are typically run by community organizations and faith-based groups. Many families come to emergency shelters after months of staying with friends and families, or living in campgrounds, cars or in other precarious situations. Some families arrive at shelters after being evicted. Others are fleeing domestic violence situations, even if they do not identify it as the primary reason for their homelessness. Emergency shelters provide a temporary haven for families to “re-group”; determine how best to address economic, educational, and health issues that may have contributed to their homelessness; and move to stable, permanent housing.

Transitional housing bridges the gap between emergency shelters and permanent housing – often providing more intensive services and allowing longer lengths of stay than emergency shelters. Transitional housing models arose in the mid-1980s, when communities realized that for some, emergency shelter services were not sufficient to ensure a permanent exit from homelessness. Transitional housing programs often have a specialized focus on particular barriers to stable housing and provide services and supports to address these issues. For example, programs may be designed exclusively for those fleeing domestic violence, struggling with addictions, or working to reunite with children in the foster care system.¹⁰⁵

Ideally, families leave emergency shelter or transitional housing for permanent housing options that include unsubsidized apartments, subsidized apartments (e.g., through Section 8 vouchers), public housing, or permanent supportive housing. Permanent supportive housing works well for people who have “multiple barriers to employment and housing stability, which might include mental illness, chemical dependency, and/or other disabling or chronic health conditions.”¹⁰⁶

Nationally, there are 29,949 units (i.e., housing for one family) of emergency shelter, 35,799 units of transitional housing, and 25,141 units of permanent supportive housing, for a total of 90,889 units for families. These numbers are based on HUD Continuum of Care reports and represent the most accurate count available. For each state, we report the number of each of these types of units available to give an idea of the state’s ability to house homeless families on any given night. As foreclosures rise, we will no doubt see an increase in the need for various housing assistance programs.

Section 8 vouchers and public housing are critical strategies for helping low-income families attain affordable housing. Section 8 vouchers, sometimes called Housing Choice Vouchers, enable tenants to find their own housing, a portion of which is paid for using their voucher.¹⁰⁷ The family pays the remaining portion of the rent. Public housing was created exclusively for low-income families, the elderly, and people with disabilities. Buildings range from scattered site single-family homes to high-rise apartments. Approximately 1.2 million households live in public housing units.¹⁰⁸

Local housing authorities are given discretion to establish wait list priorities that reflect the communities they serve. For example, they might choose to prioritize survivors of domestic violence, people experiencing homelessness, or families who were involuntarily displaced due to floods or fire. Of the 32 states for which we have data, 69% of public housing waiting lists and 66% of Section 8 waiting lists give preference to survivors of domestic violence.¹¹⁰ At present, only 59% of public housing waiting lists and 50% of Section 8 waiting lists give priority to those who are homeless.¹¹¹

Waiting lists for Section 8 vouchers and public housing are lengthy. The local housing authorities that administer these programs may choose to close its waiting list when demand far exceeds their anticipated vacancy rate. Over 40% of Section 8 and 15% of public housing waiting lists are closed to new applicants. In large cities, such as New York and Los Angeles, the number of families on waiting lists far exceeds the capacity of the housing authority. For example, Los Angeles County Community Development Commission has over 17 times as many families on the waiting list as they have public housing units.¹¹²

In addition to long waiting lists, both the Section 8 and public housing programs have other distinct challenges. For example, even when allocated a Section 8 voucher, families are not assured of securing a housing unit; they must convince a landlord to rent to them through the program. In parts of the country with tight rental markets, only a fraction of applicants are successful in contracting with landlords. Furthermore, in some cases families have eviction records or poor credit ratings that disqualify them from renting; in other cases, tenants lack the security deposits required to rent housing.

Families entering public housing also face a variety of challenges. Public housing is notorious for being in significant disrepair, leading to unsafe conditions for families and children. Many public housing units are located in neighborhoods plagued by gang violence, drugs, and other dangerous conditions. Subsidized housing via Section 8 vouchers or public housing units help families exit homelessness, but additional efforts must be made to buttress these programs.

Overall, increasing numbers of families experiencing homelessness and the multiple challenges associated with obtaining subsidized housing indicate a need to generate a more extensive stock of affordable housing in communities nationwide. Creating housing trust funds that support safe, decent, affordable housing is a critical strategy for addressing this issue. Originally started 30 years ago, the housing trust fund movement began with the belief that the health of a community relied on its ability to create affordable housing for its citizens. Housing trust funds are established by ordinance or legislation on a state, county, or city level, and target low-income households. They rely on public revenue sources (e.g., real estate transfer taxes, interest from state-held funds, document recording fees, etc.), which vary depending on the resources of a community.

For communities with housing trust funds, most use them to fund new construction, rehabilitation, and preservation, acquisition, permanent supportive housing, and services for special populations. Many also use these funds for transitional housing and emergency rental assistance. Often, housing trust funds require that funding be used to create housing that is affordable to households within a specific income range – from households with no income or who are homeless to as high as 140% of area median income (AMI). In a survey conducted by the Center for Community Change, more than half of the housing trust funds surveyed report that they target households earning no more than 60% of AMI. Six state housing trust funds dedicate their resources exclusively to serving people who are homeless.¹¹³

Thirty-eight states have state housing trust funds. Hundreds of city and county housing trust funds are in operation as well, generating over $1.6 billion annually to support affordable housing. Various revenue sources are tapped to finance these funds:

• Four of the seven states that collected over $50 million or more annually did so through real estate transfer taxes.
• Five of the states using document recording fees to fund their housing trust fund collected between $10 and $50 million.

State housing trust funds create long-term capacity and have significant economic impact. For example, Florida and Vermont provide training and technical assistance for capacity-building activities, including the development of affordable housing programs, public/private partnerships, local housing assistance plans, and regulatory reforms. Philadelphia’s housing trust fund invested $69 million in construction, rehabilitation, and home repairs. These activities in turn will generate an additional $112 million for the city itself, $188 million for the region, and $224 million for the state. The investment in housing will also create nearly 400 jobs citywide, almost 1,400 in the region, and over 1,700 in the state annually.¹¹⁴

The Housing and Economic Recovery Act of 2008 established a National Housing Trust Fund (NHTF), creating our country’s first new production program specifically targeted to extremely low-income households since the inception of the Section 8 program in 1974. Under the new law:

• The NHTF is a permanent program with a dedicated funding source and is not subject to the annual Congressional appropriations process.
• At least 90% of the funding has to be used to produce, preserve, rehabilitate, or operate rental housing.
• All the funding must benefit very low-income individuals,, with a particular focus on those falling into the extremely low-income category.

Funding for the NHTF is based on annual contributions from Fannie Mae and Freddie Mac. Until 2011, most of the NHTF funds will be placed into a reserve fund that covers losses due to troubled mortgages. By 2010, policymakers anticipate that Fannie Mae and Freddie Mac will be more stable and contributions to the NHTF will begin to accrue at a higher rate. In the meantime, HUD is beginning to work on implementing this important legislation.¹¹⁵