Homeowners facing foreclosure over tax debts wait in a conference room for their cases to be heard in Detroit in January 2015.
Homeowners facing foreclosure over tax debts wait for their cases to be heard in Detroit in January 2015. Paul Sancya/AP

Despite the buoyant economy, the number of hardest-hit households is close to record levels of the foreclosure crisis in 2011.

A new report released by the U.S. Department of Housing and Urban Development this month shows that the number of American households facing worst-case housing scenarios is returning to the record crisis levels seen during the foreclosure crisis.

The 2017 report on Worst-Case Housing Needs finds that 8.3 million households suffered extreme housing conditions in 2015, an increase of more than 580,000 households over 2013. HUD defines “worst-case housing needs” as very low–income households who do not receive government aid for housing and who pay more than one-half of their income toward rent or live in unsafe conditions (or both). CityLab’s Tanvi Misra plotted out where the worst-off families are living today.  

The country reached peak worst-case housing conditions in 2011, when the number of most-vulnerable families climbed to a record 8.48 million. America is not far off from that figure—and one of the Trump administration’s budget priorities could easily put us over the top.

The $6.8 billion in cuts to HUD funding that the Trump administration proposed in its fiscal year 2018 budget would eliminate whole categories of housing aid for millions of families, including rental housing vouchers (Section 8) for more than 250,000 households. Absent some emergency intervention, the cuts to vouchers alone could thrust many thousand of families into crisis and homelessness.

Representative David Price, the ranking member on the U.S. House Appropriation Subcommittee on Transportation, Housing and Urban Development condemned the Trump administration’s planned budget cuts in light of HUD’s findings. The North Carolina Democrat says that the report “offers further evidence of the affordable housing crisis facing our country—and the Trump Administration’s failure to take it seriously, let alone to address it.”

Yet the Trump administration’s budget goes further: The president’s budget proposal eliminates the national Housing Trust Fund, a national program designed specifically to provide housing aid to America’s lowest-income households. As Price notes, this figure includes a staggering 2.9 million families with children, many of whom are living in unsafe, substandard housing.

The Housing Trust Fund’s novelty lies in how it’s funded. It’s not a taxpayer-subsidized program; instead, a fraction of sales through Fannie Mae and Freddie Mac (4.2 basis points, or 0.042 percent) gets set aside for the Housing Trust Fund. In 2016, its first fully operational year, the fund distributed $174 million to housing agencies all around the country. With a buoyant economy, that figure climbed to $219 million for 2017.

The thinnest silver lining to soaring home prices nationwide—up 6.2 percent in the second quarter of 2017—is that the purse for the national Housing Trust Fund grows accordingly. With rents rising, the number of families who depend on these stop-gap safety-net funds are bound to eclipse record levels. “Yet the Trump/Carson budget proposal for HUD foolishly zeroes out funding for the national Housing Trust Fund and other programs created to fix this exact problem,” Price says.

That’s why Congress needs to take a close look at the budget cuts that President Trump has planned for housing and other social programs. The Housing Trust Fund, in particular, is all upside: Eliminating that program won’t save homeowners an appreciable amount of money, but it will cause a great deal of harm to those who have nothing.

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