The version of the stimulus package being considered by the Senate is a disappointment to those who had hoped that the bill would address long postponed affordable housing needs.
While the bill would offer a $15,000 tax credit to those who buy a new home, for the millions of families who are too poor to buy a home the stimulus plan offers far more modest hope. The most disappointing aspect of the bill is that it dose not seize the opportunity to capitalize the National Housing Trust Fund.
Today’s New York Time editorial sums up the situation quite well.
The stimulus package taking shape in Congress does little to provide affordable housing for the country’s poorest families. That is grim news. Affordable housing has been hard to find in recent years. It’s even harder now that many Americans have lost their jobs and homes.
Congress could help low-income Americans find homes – and create jobs doing it – by providing money for the National Housing Trust Fund, a worthy program it created last summer but has so far failed to finance. The Senate and House versions of the stimulus bills do not now contain such money, but funds could and should be added in the conference committee that must reconcile the bills.
The trust fund was originally envisioned as a project that would encourage developers to build 1.5 million affordable housing units in mixed-income developments. The government-backed mortgage companies, Freddie Mac and Fannie Mae, were to provide the money. Both, however, ran into financial trouble.
Congress can take up the slack. The need for affordable housing has increased dramatically in the last six months, and the Department of Housing and Urban Development has already done a lot of advance planning.
Estimates by the National Low Income Housing Coalition suggest that a Congressional down payment of $10 billion for the fund, plus $3.5 billion in housing vouchers under the Section 8 program, could produce affordable housing for up to 400,000 people. New construction would, of course, spawn new jobs right away.
The Senate’s stimulus bill would give home buyers a tax credit of 10 percent of the price of a primary residence, up to $15,000. This would help middle- and upper-income buyers, but not the elderly, poor and disabled who don’t earn enough to qualify for this break. Congress can help them by reviving the National Housing Trust Fund.