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Lending

Sequestration leaves Minnesota residents out in the cold

Solution to growing housing problems remains nonexistant

December 9, 2013
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Both the House and Senate are spending the week trying to put together a budget that will finally bring about deficit reduction.

By economic barometers, the negotiations appear to be going well.

However, it is important to fully appreciate the human element, those who will most strongly feel the boot heel of austerity measures.

Coverage across the negotiations vary in tempo and tone. These are interesting times and correspondents appear to be uneven in their reaction and subsequent coverage.

The Washington Post called the negotiations more whimper than bang.

"After more than two years of constant crisis, the emerging agreement amounts to little more than a cease-fire," writes Lori Montgomery. "Republicans and Democrats are abandoning their debt-reduction goals, laying down arms and, for the moment, trying to avoid another economy-damaging standoff."

Business Insider is more direct, with coverage titled: "Sequestration is finally working."

Why?

"Because both parties, in particular the GOP, are now incentivized to cut a deal," writes Danny Vinik. "The non-defense discretionary spending cuts were front-loaded in 2013 so that the 2014 level is nearly the same as 2013 at $469 billion. Democrats, however, want to restore as much of the cuts that took place in 2013 as they can."

And finally on the other end of the interpretation, from Politico's Darren Samuelsohn, the debate is taking part in an environment of gloom and doom.

"The looming cuts promise to hurt military troop readiness and limit FBI agents who keep tabs on terrorists, gangs and white-collar criminals," he writes. "It’s not a pretty picture either for cash-strapped scientists already hamstrung tracking deadly diseases and educators who this year had to turn down more than 50,000 preschoolers."

So let's take a moment to drill down into the impact on the average, low-income American. We're talking $15,000 a year, or less.

In Minnesota, the Minnesota Housing Partnership and the state chapter of the National Association of Housing and Redevelopment Authorities goes to great lengths to document the struggles to house low-income people.

Since 2010, the budget cuts are threatening to make most of their efforts insolvent, leaving the state's most vulnerable out in the cold.

These programs currently provide housing assistance to over 50,000 households. Nearly 60% include someone who is elderly or has a disability, and over a third of the residents are children.

A recent report on the situation starts with harsh reality:

Despite recent signs of economic recovery, real renter incomes have fallen by 14% while rents have risen by 8% since 2000.Working families have been hit hard, as rental vacancy rates have plummeted. By 2012, on any given night, an estimated 14,000 Minnesotans were homeless. The number of homeless people identified on a single night increased 32% statewide between 2006 and 2012.

With more cuts on the way, the resident will need to move into private rental housing and pay a higher premium.

Chip Halbach, MHP’s executive director said, "The cuts to these successful, effective, safety net housing programs are tragic. It is essential that we find policy alternatives."

While this situation is not unique to Minnesota, the national low-income housing blanket continues to run out of money. The ice storm recently felt across most of the nation is just the beginning of a long winter for some many of these fellow citizens.

Halback is asking for policy alternatives, and there needs to be some, but don't expect to find any in the recent budget negotiations.

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