Real Estate

HUD public housing reform could potentially split families apart

HUD rent increases could leave families unable to pay childcare

The Making Affordable Housing Work Act aims to improve the lives of many low-income families; however, the bill has the potential to rip them apart, according to an article written by Kara Alaimo for Bloomberg.

In late April, the U.S. Department of Housing and Urban Development announced the creation of the Making Affordable Housing Work Act, which seeks to reform “decades-old” rent policies that the agency considers confusing, costly and counterproductive.

"The system we currently use to calculate a family's rental assistance is broken and holds back the very people we're supposed to be helping," HUD Secretary Ben Carson said. 

Currently, Congress requires HUD-assisted households to provide 30% of their adjusted income toward rent while the government makes up the difference, up to a maximum amount.

Under HUD’s proposal, the amount is expected to increase to 35% of net income for those receiving assistance, which basically means that the amount they’d be required to pay would increase threefold.

In this calculation, the government does not take into account childcare expenses, which is harmful since such a large percentage of the family’s income would be going towards rent. Parents will either have the choice to leave their children alone or in unsafe conditions. Furthermore, many might be at risk of having their children taken from the home, according to Alaimo's reporting.

From the article:

According to HUD, 34% of the U.S.’ 1 million public housing units are headed by a single adult with children. Under current rules, the government calculates how much a family can afford to pay in rent for public housing by taking into account “any reasonable childcare expenses” the family incurs for kids under age 13 while a parent is working or pursuing education. The new legislation eliminates this deduction, as well as deductions for medical care. 

At the same time, the bill raises rent on poor families and allows housing authorities to require that adults work. Rent would be calculated by taking 35% of the family’s income or 35% of the money a person would earn by working 15 hours per week at the federal minimum wage — regardless of whether they actually work.

Despite these concerns about the growing affordability crisis, HUD and the Trump administration are holding course on their proposed reduction of housing assistance, which means that the affordability issue only going to get worse.

Most Popular Articles

NAR bans “pocket listings”

The National Association of Realtors board of directors voted 729-70 on Monday to ban the controversial practice of “pocket listings.”

Nov 12, 2019 By

Latest Articles

CFPB to consider changing or eliminating TRID rule

The CFPB has been taking a long, hard look at some of its rules and regulations. Next up on its list to review is TRID, and it looks like eliminating the rule entirely is not off the table.

Nov 20, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please