WASHINGTON — Housing and Urban Development Secretary Ben Carson on Wednesday proposed raising the amount that low-income families are expected to pay for rent — tripling it for the poorest households — as well as making it easier for property owners to place work requirements on those getting housing subsidies.
The move to overhaul how rental subsidies are calculated would affect 4.7 million families relying on federal housing assistance — thousands of them in Iowa, where there are waiting lists in some cities to receive Housing Choice Vouchers, popularly known as Section 8 assistance.
The proposal legislation, which HUD said would simplify rent calculations and lessen the burden on tenants to annually verify their income, would require congressional approval.
“There is one inescapable imperative driving this reform effort,” Carson said in a call with reporters. “The current system isn’t working very well. Doing nothing is not an option.”
Tenants generally pay 30 percent of their adjusted income toward rent or a public housing agency minimum rent — which is capped at $50 a month for the poorest families.
The administration’s proposal raises the family monthly rent contribution to 35 percent of gross income, or 35 percent of their earnings working 15 hours a week at the minimum wage of $7.25 an hour. Under the proposal, the cap for the poorest families would rise to about $150 a month. About 712,000 households nationwide would see their rents rise to the new monthly minimum of $150, HUD officials said.
Housing advocates criticized the proposal as “cruel hypocrisy,” coming on the heels of tax breaks to wealthy Americans and corporations.
“When we are in the middle of a housing crisis that’s having the most negative impact on the lowest-income people, we shouldn’t even be considering proposals to increase their rent burdens,” said Diane Yentel, president of the National Low Income Housing Coalition.
Section 8 is the federal government’s major program for assisting very low-income families, the elderly and the disabled to afford sanitary housing in the private market. But there also are subsidized public housing units and assistance programs for military veterans and others.
According to HUD officials, half the households receiving federal housing aid are headed by the elderly or disabled.
The Cedar Rapids Housing Service office — which includes the Public Housing Authority of Linn and Benton counties — assists about 1,200 families a year.
The Iowa City Housing Authority, which includes all of Johnson County and portions of Iowa and Washington counties, also provides housing aid to about 1,200 families a year.
The Eastern Iowa Regional Housing Authority, which serves the rural areas of Cedar, Clinton, Delaware, Dubuque, Jackson, Jones and Scott countys, provides up to 983 Section 8 vouchers a year and operates 164 rental units for very low income families.
The bill proposed by Carson would allow public housing agencies and property owners to impose work requirements. Currently, only 15 housing authorities in about a dozen states require some sort of work or job training in return for benefits, HUD said.
Seniors over 65 and individuals with disabilities would be exempt from the rental increases for the first six years. They also would be exempt from work rules.
“Every year, it takes more money, millions of dollars more, to serve the same number of households,” Carson said, citing long waiting lists for federal housing assistance. “It’s clear from a budget perspective and a human point of view that the current system is unsustainable.”
Carson said decades-old rules on how rent is calculated are “far too confusing,” often resulting in families who earn the same income paying vastly different rents.
“They know how to include certain deductions that other people may not be aware of,” Carson said. “We really want to level the playing field and make it much more even for everyone.”
HUD also seeks to eliminate deductions for medical and child-care costs when determining a tenant’s rent.
Carson said current rules that require an annual review of household income creates “perverse consequences” that discourage people from earning more money.
Under the proposed bill, income verification would be required only every three years, which Carson said would encourage tenants to work more without immediately facing a rent increase.
The Washington Post contributed.