National: Universal Housing Assistance (United States)

The following post discusses the current state of Federal housing assistance in the United States, ongoing efforts to make rental assistance an entitlement available to all qualifying households in the era of COVID-19, and why Housing Choice Vouchers is not the right model for a universal housing assistance program.

Many proponents of social justice believe in a Right to Housing. This right entitles all people to be housed in healthy, safe, and desirable accommodations regardless of a person’s ability to afford to pay for those accommodations. Any gap between what households can afford and the cost of minimum standard housing is seen as a need.

Supply, Demand, and the Market
When there is demand for a product or service, there are a few ways that demand can be satisfied. Demands for goods and services can be provided in a marketplace, through private charity, by a publicly-funded government service, or through other means.

When a person is willing to pay for a good or service, but does not have the capacity to pay someone else to provide that good or service for a mutually agreed upon price, that demand cannot be satisfied through the marketplace. If there is an ability to pay for a product or service, but no one willing or able to provide for that demand, a market has yet to emerge to satisfy the opportunity. Only when there is a convergence between one’s willingness and capacity to pay someone else for a product or service AND an ability to provide that good or service for an agreeable price can a marketplace begin to emerge to satisfy demand through competition among providers and consumers. Absent this convergence, either charity, the State, or another means is required to subsidize, or provide, that product or service.

In the 19th century, rising wages, employment stability, and disposable income for a growing middle class due to industrialization provided an opportunity for robust markets to emerge for consumer goods, professional services, various kinds of insurance, and many other products and services. Rising incomes also provided opportunities for private transit services and utilities. Over the course of the 20th century, social activists increasingly saw these goods and services as a need and access to them as a right. In the 21st century, access to high-speed internet is seen as a necessary provision, particularly amid stay-at-home orders during the Covid-19 global public health epidemic.

Fulfilling the Right to Housing
Ultimately, in the view of social justice advocates, the State (through its tax payers) is responsible for ensuring the adequate provision of desirable housing to all people. More specifically, the onus for generating revenue for State redistribution ought to fall upon those citizens who’ve accumulated wealth.

In practice, income and consumption is taxed more often than wealth.

When the State is unable to generate sufficient revenue to house all people, there are two options. First, the available revenue can be used to provide as many people as possible with the means to attain desirable housing, while advocating to raise additional revenue for everyone else. Second, the available revenue can be distributed among all those who lack adequate housing, while advocating to raise additional revenue to cover the full gap between incomes and private market housing costs.

Today in the United States, the former describes the status of funding for housing. Limited government revenue is redistributed to a fraction of the number of qualified applicants, while social justice proponents advocate for ways to generate additional funding. For decades, housing programs, like rental and downpayment assistance, have left most qualified people without assistance most of the time.

A Housing Assistance Entitlement Program
Recent scholarship, news coverage, and media attention on the issue of residential evictions across the United States has sparked greater interest in and support of turning rental assistance, specifically Federal Housing Choice Vouchers (HCV), into a universal entitlement program available to all qualifying households.

Housing advocates sometimes point to the Supplemental Nutrition Assistance Program (SNAP) as a model for HCV to emulate. SNAP provides participants with a debit card that is regularly-replenished with funds for the duration of the entitlement. The payment card can be used for food purchases at qualifying grocery stores. The program helps to supplement recipients’ incomes by covering the gap between what households can comfortably afford to pay for food and the estimated cost of groceries that provide a nutritious diet.

Funding Universal Housing Choice Vouchers
Some proponents of making Federal rental assistance into an entitlement program, point to the Home Mortgage Interest Deduction program as a potential funding source. Every year millions of American homeowners deduct the interest on their monthly mortgage payments from their taxable income. Repealing this deduction for households earning more than $100,000 a year could generate an additional $52 billion in Federal income tax revenue from existing homeowners with mortgages. That revenue could cover the cost of making the Housing Choice Vouchers program a universal entitlement.

Due to its popularity among homeowners, removing the mortgage interest deduction for so many families would be politically difficult. Moreover, doing so would be perceived as a tax increase on the salaries of workers in order to subsidize low-income rental property investors. Equally difficult politically, but perhaps a more ethical way to pay for universal housing assistance, would be either: a tax on household wealth, or to repeal the IRS Building Depreciation policy, which allows passive rental income to be sheltered from taxation. In any case, there are several deeper issues with current thinking about the Right to Housing, a universal housing assistance entitlement program, and using SNAP as a model.

If housing is a human right then people are entitled to require a responsible party, usually a government agency, to house them. In the United States, housing must meet minimum standards of habitability and safety. Any gap between the cost of providing minimum standard housing and the amount someone can afford to pay for that housing becomes a need that the State is responsible for covering for all people. Since the cost of providing housing that meets minimum standards is very high, and the earnings of low-income households are comparatively meager, covering that price gap for millions of American households is expensive. In the near-term, funding the Right to Housing is untenable economically and politically.

Furthermore, if people are entitled to anything, it is not a Right to Housing, but a Right to Habitat. Guaranteeing the human habitat to all is far more feasible, just, and desirable than trying futilely to guarantee a right to housing. Households are responsible for housing themselves. Neither the State nor developers are responsible for housing others. When public policy inhibits households from housing themselves, reform must focus on empowering current and future residents to house themselves. Instead, reform efforts often mistakenly focus on attracting professional real estate investors and developers.

Even if universal housing assistance through rental vouchers and downpayment assistance were economically and politically feasible, which they aren’t, such an entitlement program would produce undesirable outcomes. That low-income rental property investors are in such unanimous support of housing assistance ought to offer a clue as to the primary beneficiaries of rental and downpayment assistance programs (hint: not tenants).

Increasing the provision of rental vouchers and downpayment assistance would: 1) fuel acquisition by property investors, 2) primarily benefit realtors, sellers, and lenders, and 3) increase housing values and prices for homebuyers.

Lastly, the Supplemental Nutrition Assistance Program is indeed an appropriate model for a universal housing entitlement program. However, the Housing Choice Vouchers program is not an appropriate housing program to universalize as an entitlement. If SNAP provided adequate funding for recipients to purchase professionally prepared and served meals from restaurants throughout the day for each member of the household, then it would be the equivalent of a universal rental assistance entitlement program.

A nutrition assistance program built on that model would be prohibitively expensive to fund due to its over-reliance on professional commercial-grade food preparation and service costs. Instead, SNAP supports food purchases at grocery stores to enable home cooking. Therefore, a housing entitlement program for all qualifying households would not be Housing Choice Vouchers, but a Supplemental Housing Assistance Program.

If you want to learn more about the Right to Habitat or how a Supplemental Housing Assistance Program could work, explore these services offered by DEMOCRATIZE DEVELOPMENT.

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