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Affordable Housing , Community Development , Federal News

Connecticut needs more affordable homes. Heard of the National Housing Trust Fund?

19 November 2013

Jude Carroll is the Community Development Specialist at the Connecticut Housing Coalition.

The Partnership’s recent report, HousingInCT2013, shows exactly why the National Housing Trust Fund (NHTF) is an important, though still unfunded, public policy that would help many Connecticut families.  According to the report, Connecticut’s affordable rental housing stock comes nowhere near meeting the need of low- and middle-income households.  And the cost of housing is well beyond the means of average renters too.

  • Over one-third of Connecticut households spend over 30 percent of their income on housing costs—a long-accepted standard of affordability.
  • Only seven other states have a higher housing wage than Connecticut—a renter must earn $23.22 an hour for an average two-bedroom apartment.

The National Housing Trust Fund, passed under President George W. Bush in 2008, held the promise of more affordable housing units for low- and extremely low-income renters.  Ninety percent of NHTF funding was to go to build, renovate or operate affordable housing; 10 percent would be used for homeownership.  But the funding source for the Trust Fund—Fannie Mae and Freddie Mac—collapsed along with other pieces of the housing finance industry.  Ironically, the Great Recession resulted in an increasing number of low- and moderate-income homeowners facing foreclosure—only adding to the long line of households looking for affordable rents. 

Fast forward to now.  Amid Washington gridlock and the gaping gap in understanding among D.C. decision makers about the lives of average Americans, the Trust Fund continues to languish.  Low-income renters know very well what languishing looks and feels like.  Toothaches gone untreated, school trips missed, and unpaid utility bills often become “just the way life is”—all because a choice must be made between paying the rent and paying for less immediate family necessities.

A recent proposal in the U.S. House of Representatives – called the “Common Sense Housing Investment Act” or H.R. 1213 – would capitalize the National Housing Trust Fund through a simple modification of the Internal Revenue Code that would turn the mortgage interest deduction into a 15 percent non-refundable tax credit for homeowners and cap the deduction on mortgages over $500,000.  Revenue created by the change would also be invested in the Low-Income Housing Tax Credit, Section 8, and the Public Housing Capital Fund.  This is only one solution, but is one that can work.

Governor Malloy and the Connecticut legislature have allocated over $500 million to build and renovate affordable housing over the next decade, but these dollars will not stretch to meet total need.  Indeed, as the Partnership’s report states, the demand for rental housing is only increasing as empty nesters and millenials also look for affordable housing in walkable communities.  Adequately funding the National Housing Trust Fund would help Connecticut and other states meet their affordable housing needs, so that families across the income spectrum can afford to pay for housing costs and meet their basic needs.
Jude Carroll is the Community Development Specialist at the Connecticut Housing Coalition.
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