The Democratic presidential primary campaigns have been paying an unprecedented amount of attention to housing policy. Most of the top ten candidates have talked about housing on the campaign trail, and half – Booker, Castro, Harris, Sanders, and Warren – have made detailed policy proposals – something that has not happened in past primary seasons. While housing has not yet been a focus during the debates, candidates are recognizing the breadth and depth of the housing affordability crisis and are promising to commit hundreds of billions of additional dollars to address it. And while campaign proposals generally provide only a rough guide to the policies that presidents eventually succeed in enacting, they do provide insights into a candidate’s priorities and understanding of key issues.
All these proposals have big implications for New York City. The affordability and homelessness proposals from five candidates with detailed plans would mean anywhere from $1.9 billion to $12.9 billion a year in additional federal subsidy. These sums would not only help to address the city’s entrenched housing needs, but would also provide a significant economic stimulus, especially to the city’s poorer neighborhoods.
Today the federal Department of Housing and Urban Development (HUD) spends $42.6 billion on direct subsidies to build and operate affordable housing. Of that, 53 percent goes to Section 8 vouchers for tenant families to help pay their rent, 17 percent goes to public housing, and 30 percent goes to privately owned subsidized developments. In addition, HUD and other agencies spend $5.8 billion a year on various homelessness programs, the Internal Revenue Service allocates Low Income Housing Tax Credits to the tune of $9 billion a year, and the national Housing Trust Fund received $248 million last year from Fannie Mae and Freddie Mac.
Central to many of the candidates’ plans are proposals to make rental housing more affordable by spending a lot more federal money – whether through building new housing, providing rent assistance to individual families, or dealing with the massive need for capital reinvestment in public housing developments around the country. But the plans also call for other reforms, such as regulating rents and evictions, combatting exclusionary land-use practices in local jurisdictions, and addressing redlining and other forms of racial exclusion by expanding fair housing practices and support for homeownership.
New production and preservation
The Booker, Castro, Sanders, and Warren campaigns have released proposals for expanding affordable housing production and preservation. All four rely on the
Housing Trust Fund (HTF) as the primary funding mechanism, a welcome focus on the first new federal housing program in over 40 years to explicitly serve what the federal government calls extremely low income renters. In New York City that translates to up to about $29,000 a year for a family of three. Other subsidies for new housing construction, including the Low Income Housing Tax Credit, primarily benefit people with much higher incomes.
HTF is a block grant program: The federal government distributes funds to the states using a formula and state governments make the funds competitively available. In 2019, Congress allocated $248 million to the trust fund, which then passed on $19 million to New York State. New York City probably received about half of that statewide benefit. The chart below illustrates projected HTF commitments under each candidates’ plans, and the resulting increases to the New York State share.
In New York, both the governor and the mayor have been criticized for failing to meet the
need for deeply affordable housing. A major federal commitment to extremely low- income renters would help with this goal, especially when paired with other proposals, like rental subsidy assistance proposed by Booker, Castro, Harris, and Sanders or the $50 billion grant program for community land trust development, proposed by Sanders.
(Although they have not made detailed proposals, Buttigieg has discussed the need for housing production and O’Rourke includes housing in his climate agenda.)
Rent assistance
Booker, Castro, Harris, and Sanders all propose to expand direct assistance to tenant families to help them pay their rent. Sanders would greatly expand the
federal Section 8 voucher program, in which the federal government pays for part of a low-income household’s rent in private apartments. Booker and Harris would create a new refundable tax credit, which would serve to reimburse tenants for excessive rents on a similar basis. This approach would take the benefit out of the annual budget process, but could make the benefit harder to access, by making much of it into an annual tax rebate instead of a monthly payment directly to the landlord. Castro would combine an expanded Section 8 for very low- income people with a tax credit for a somewhat higher income group.
All of these proposals would lower tenants’ net rent to 30 percent of household income. Because New York City has more than 700,000 households in unsubsidized housing paying more than that threshold, it stands to benefit greatly from any of these plans. There are 104,000 of these households already on the waiting lists for the city’s existing stock of Section 8 vouchers.
On the other hand, the city’s very tight housing market could present problems. Already, many families that receive Section 8 vouchers are unable to find an apartment that meets the program’s conditions where the landlord will accept them. Expanded rent assistance programs would work best when combined with expanded affordable housing production programs – something several candidates already propose.
Although the Booker, Castro, Harris, and Sanders plans differ in design, with different rent and income limits, the end results are quite similar. All would provide rent assistance to between 640,000 and 685,000 households, with average amounts of assistance between $560 and $600 a month, for totals ranging from $4.5 to $4.8 billion a year. (We base these estimates on CSS analysis of the Census Bureau’s
New York City Housing and Vacancy Survey.)
Public housing
Castro, Sanders, and Warren all propose adding new funding for the capital needs – long-delayed major repairs – of the country’s existing stock of public housing. Public housing across the country receives about $7.4 billion a year in federal money, an inadequate amount that contributes to deteriorating conditions. The poor physical condition of much of the country’s public housing developments, together with the poverty of the residents, may explain why so many politicians are reluctant to embrace public housing, but the program urgently needs capital funding.
Today, the New York City Housing Authority estimates its
capital needs at $32 billion over the next five years, based on actual survey of the condition of its properties. The best estimate for the total national need is $70 billion, but that is based on extrapolations from surveys of a sample of housing authorities in 2010 and it appears to include only $20 billion for NYCHA.
Two candidates have proposed funding at least approximately on the scale of need – $50 billion from Castro and $70 billion from Sanders. Warren proposes a much smaller amount – $3.6 billion, and the other candidates ignore existing public housing in favor of subsidies to build new affordable housing. We can allocate the national sums of money to NYCHA on the basis of the $20 billion out of $70 billion ratio. (These are total capital amounts, not annual appropriations, so we have divided them by ten in order to estimate the annual totals mentioned above. Nydia Velázquez, congressional representative for parts of Brooklyn, Lower Manhattan, and Queens has also introduced legislation that would allocate $70 billion for public housing capital repairs.)
These proposals would not only help improve living conditions for NYCHA residents, they could also reduce the housing authority’s reliance on controversial means of raising money, such as partial privatization or building market-rate housing on public housing campuses.
