By Christopher S. “Kit” Bond and Henry Cisneros Over the past two decades, the HOME Investment Partnerships program administered by the Department of Housing and Urban Development has played an indispensable role in supporting the affordable housing needs of hundreds of thousands of low-income families in both urban and rural America. Unfortunately, the program finds itself on the congressional chopping block, a victim of budget politics and sequestration.
Unlike many federal programs with a “Washington-knows-best” approach, HOME is driven by local needs and demands. It is highly flexible, allowing communities throughout the country to use program dollars in ways that respond directly to their own unique housing conditions.
Since the program’s inception, communities have chosen to use HOME funds to produce some 1.2 million affordable housing units. These initiatives have often breathed new life into struggling neighborhoods, serving as a catalyst for further development and renewal.
In addition to these activities, some communities have used HOME funds to provide vital rental assistance for their poorest residents. Others have looked to HOME as a source of capital to house the homeless. Still other communities have deployed HOME funds to give a lift to those families seeking to buy a home for the first time.
HOME dollars are also being leveraged in HUD’s Rental Assistance Demonstration program, an important initiative aimed at preserving our nation’s aging public housing stock that is in desperate need of maintenance and improvement.
Appropriations legislation currently moving through the United States Senate, however, would reduce funding for HOME by 93 percent. This massive cut follows a reduction in HOME funding by some 44 percent over the past five years.
In the House of Representatives, pending legislation would cut HOME funding by an additional 15 percent. This legislation then attempts to compensate for the reduction by transferring future proceeds available for the National Housing Trust Fund, potentially another critical source of affordable housing dollars, over to the HOME program.
It is hard to square these actions with the troubling conditions in housing today. Cutting funding for HOME is simply the wrong policy at the wrong time. Eviscerating the program, as the Senate bill would do, is unthinkable.
HUD’s latest “worst case” needs report tells us there is a severe lack of affordable rental homes for those households with the lowest incomes – just 65 affordable homes for every 100 “very low-income” households. Yet one of the key objectives of the HOME program is to help communities increase the supply of affordable housing precisely for this income group.
In fact, HOME funds have been utilized, often as a form of “gap financing,” in nearly 25 percent of all the Low Income Housing Tax Credit projects completed over the last three years. Looking ahead, it is likely that many Housing Credit projects will not go forward ifHOME dollars are not available to help close these deals.
According to Harvard’s Joint Center for Housing Studies, more than 11 million households pay in excess of 50 percent of their income just on rent. Many of these families are at the bottom end of the income ladder and could benefit from the rental assistance that HOME funds would provide. Eliminating these funds will only exacerbate a situation that has already reached crisis proportions.
In addition, the national homeownership rate has plummeted to levels not seen since the 1960s as access to affordable mortgage credit has tightened considerably. So why cut a program that has opened the door to sustainable homeownership for many lower-income families who otherwise would have been shut out of this opportunity?
The HOME program is not perfect, but HUD has acted in response to past cases of mismanagement and poor oversight by strengthening financial reporting requirements for grantees and updating program regulations. Today, the overwhelming majority of HOME projects are completed successfully and on time and have a very positive impact on their communities.
With so many lower-income Americans struggling with rising rents and a lack of affordable housing, we respectfully urge Congress to reverse the proposed cuts to the HOME program. It’s time to build up HOME, not tear it down.
Christopher S. “Kit” Bond is a former U.S. senator and governor of Missouri. Henry Cisneros is a former secretary of Housing and Urban Development.