U.S. Housing and Urban Development (HUD) Secretary Ben Carson unveiled a proposal on Wednesday that would allow Public Housing Agencies (PHAs) to raise rents for those receiving housing subsidies through the federal government, a move that has long been telegraphed by Carson and the Trump administration.
The Making Affordable Housing Work Act amends the United States Housing Act of 1937 to raise the rent to whichever amount is higher: 35 percent of a family’s monthly income or 35 percent of the amount earned by working 15 hours a week for four weeks at the federal minimum wage, which amounts to around $150 at the current federal minimum wage.
Currently, tenants who receive federal assistance pay 30 percent of their adjusted income toward rent, with a minimum of $50. The new rule effectively sets a new minimum rent of $150, three times higher than the current rate.
Elderly and disabled families would be exempt from the changes and would pay rent according to the previous structure. There are also hardship exemptions that include situations where tenants would be evicted as a result of the change, a death in the family, or loss of employment or wages.
The proposal would need to pass through Congress at a time when legislative efforts have ground to a near halt as the 2018 midterm elections approach. Numerous initiatives pushed by the Trump administration have already stalled this year, including an infrastructure bill and an overhaul of the Dodd-Frank regulations enacted in the wake of the 2008 financial crisis.
The bill also gives PHAs the authority to impose work requirements on those receiving housing subsidies, but does not explicitly demand PHAs to impose them. Any work requirement would exclude the elderly and disabled.
HUD subsidizes housing for approximately 4.7 million families. In a press call Wednesday afternoon, Carson called the current structure for calculating rent “unsustainable,” citing increased costs to aid the same number of families.
“The system we currently use to calculate a family’s rental assistance is broken and holds back the very people we’re supposed to be helping,” Carson said.
Requiring tenants to pay more than 30 percent of their income in rent is symbolic, as paying more than 30 percent is how HUD defines a family that is “rent burdened.” A severe rent burden is defined as a family paying more than 50 percent of their income in rent.
The Fair Housing Act of 1967 originally capped rents for those receiving federal housing subsidies at 25 percent of their income. It was raised to 30 percent in 1981.