A National Housing Trust Fund
February 2005
(Update June 2005)
Bills to establish a National Housing Trust Fund were introduced in the last Congress and had an impressive 214 cosponsors, a near majority in the House of Representatives. In the 109th Congress advocates expect to build upon this stellar performance and get full consideration for this important public policy in both Houses of Congress.
The legislation would establish a trust fund like those existing in some 280 state and municipal governments. The fund would serve as a source of revenue for the production of new housing, and the preservation or rehabilitation of existing housing that is affordable for low income people.
On average, families across the country must earn $15.37 an hourmore than twice the minimum wageto afford a two-bedroom apartment at fair market rent. A full-time minimum wage worker cannot afford the fair market rent anywhere in the country.
The lack of housing in our communities affects economic developmentbusinesses simply will not locate in communities where their workers cannot afford to live. And, especially important in today's economy, housing is a proven economic stimulus. A $5 billion investment in housing production would initially create more than 180,000 jobs. When leveraged, this investment could result in up to 1.8 million jobs and $50 billion in wages.
The initial goal of the National Housing Trust Fund is to build and preserve 1.5 million units of rental housing for the lowest income families over the next 10 years.
Catholic Social Teaching has long recognized housing as a basic human right. The Catholic community--through its parishes, diocesan structures, and Catholic Charities agencies--is one of the largest providers of shelter in the nation. Since the late 1960's, the federal government, through the Department of Housing and Urban Development, has solicited, encouraged, and funded a variety of Church sponsored housing--particularly senior housing, transitional housing, homeless shelters, and some family units.
The United States Conference of Catholic Bishops supports this legislation. In April 2002, Cardinal McCarrick wrote on behalf of the USCCB to Members of Congress: This National Housing Trust Fund presents Congress with a genuine opportunity to let the American people know that the shelter needs of low-income families are a national priority. I urge you to support [NHFT] as one way to demonstrate how vitally important housing is to the well-being of families and our communities.
Proponents of a National Housing Trust Fund received very good news regarding their efforts to raise federal funds to build more rental housing that is affordable for the lowest income people. On May 25, the Financial Services Committee of the U.S. House of Representatives approved the "Federal Housing Reform Act of 2005," a bill to strengthen federal regulation of Fannie Mae and Freddie Mac.
The bill requires these government sponsored enterprises' to use 5% of the companies' after tax profits to fund affordable housing. The initial estimate is that 5% of their profits will be $400-$600 million in the first years and will go as high as $1 billion annually eventually.
Without saying exactly how much should be used for each income group, these affordable housing funds are to be used to benefit extremely low and very low income families. The funds can be used for capital grants for the production, preservation, and rehabilitation of rental housing, as well as assistance for first time homebuyers. A small part of the funds would be used to leverage other money to support housing and economic development. The funds can be used for direct housing purposes only and not for administrative expenses. At least 10% of the funds are to go for home ownership. There is a preference for projects that will benefit extremely low income families.
The bill received overwhelming bipartisan support (65 to 5) as the committee voted to move it to the House floor, as early as the second week in June. Similar legislation has yet to be developed in the Senate.
The affordable housing fund is not everything the NHTF advocates including the USCCB wanted, but it is a HUGE victory for extremely low income families who need decent and affordable housing. There will be opportunities in the Senate and in the conference committee to improve the bill.
We owe a special thanks to Financial Services Committee Chairman Mike Oxley (R-OH), the Ranking Member Barney Frank (D-MA), and Housing and Community Opportunity Subcommittee Chair Bob Ney (R-OH) for joining in a bipartisan fashion to craft the legislation to create this new affordable housing fund.
This is just the first step in this campaign to achieve 1.5 million new units of housing affordable for extremely low income people in ten years.
Contact your Representative and Senators and urge them to co-sponsor The National Housing Trust Fund. Members of Congress need to hear from people in local communities about the need to provide every family with access to affordable housing.
Thom Shellabarger at the USCCB, 202 541 3189 or tshellabarger@usccb.org
Douglas Rice, Catholic Charities USA 703 549 1390 X195 or drice@CatholicCharitiesUSA.org