Comparing Sanders and Biden on low income housing

The race to become the Democratic nominee for the 2020 U.S. Presidential Election has recently become much clearer, with former Vice President Joe Biden and Senator Bernie Sanders dominating the primary elections. As the two frontrunners prepare for the upcoming debate and primaries, Affordable Housing Online has dug into the housing policies of each candidate. Below is deep analysis provided by two of our housing experts who come from different professional backgrounds, and are able to give their own unique viewpoints.

Robin Lovelace is the Outreach Manager for Affordable Housing Online. Robin is a retired Housing Choice Voucher Policy Analyst who worked for 17 years in various roles for the Indiana Housing and Community Development Authority, Evansville Housing Authority and City of Evansville. Born and raised in Indianapolis, Indiana, Robin also writes fiction and has been published in literary magazines. Her latest novella, Savonne, Not Vonny, won the 2019 Etchings Press Prize.

Chris Holden is Affordable Housing Online’s Senior Housing Analyst. Chris has been in the affordable housing field for 25 years. Originally from Keene, New Hampshire, he has worked as a researcher, policy analyst, lender, trainer and real estate developer. He also taught political science at Keene State College. He is focused on making housing policies more accessible for low-income renters.

Nathan Brunet (Moderator):

Both candidates propose expanding funding for the Section 8 Housing Choice Voucher program, but the costs would be tremendous. There are 5.3 million families presently using government rental assistance programs including the Housing Choice Voucher program, at a cost of roughly $29 billion a year. How achievable would it be to fully fund Section 8?

Robin Lovelace: It has been estimated that only about 25 percent of eligible families are actually receiving Housing Choice Voucher rental assistance. If the Housing Choice Voucher program was expanded to cover every eligible family, the costs would quadruple. If the number of voucher holders is dramatically increased, the already scarce supply of suitable units would also need to increase.

On the other hand, expanding rental assistance would stabilize more families, lift more families out of poverty, and significantly cut down on hospital, nursing home, jail, and temporary shelter costs.

Not even considering program costs, HUD would need to substantially boost the supply of available units, which is an incredibly difficult task on its own.

Both Biden and Sanders support making Source of Income (SOI) discrimination a federal offense which is a great idea, but as far as I could tell, neither candidates address the need for incentives to persuade owners to rent to voucher holders.

Offering owners tax deductions or partnering with other federal programs to offer grants to convert rental units to solar, replace old plumbing and wiring, provide insulation, replace worn roofing or install energy efficient windows, would be persuasive reasons to rent to voucher holders.

Sanders’ plan includes investing $2.5 trillion to build nearly 10 million permanently affordable housing units. Plumping up funding programs like the Low Income Housing Tax Credit (LIHTC) program for private builders to construct affordable housing units with the requirement to accept vouchers would prove to be a successful way to create low income housing.

Another difficulty is with streamlining and consolidation. While streamlining of program rules happened with the Housing Opportunity Through Modernization Act of 2016 (HOTMA), administrative practices basically remain the same. To be blunt, the nation has too many Public Housing Agencies (PHAs) involved with administering the HCV program. PHAs have HCV programs that range from as little as 20 Housing Choice Vouchers to as many as 145,000 Vouchers. Larger cities typically have two or three different PHAs administering the same program for the same area. 

Consolidation would boost efficiency and consistency in the administration of the Housing Choice Voucher program; and if funding for all families eligible is made real, administrative needs and costs would naturally soar. There would be no choice but to require consolidation as a cost saving measure.

Chris Holden: Based on historic voting patterns, Democrats would have to control both the House and the Senate to increase Section 8 to this level. This would have a huge price tag, so a revenue stream would need to be proposed. This means increasing taxes, cutting other expenditures, or both.

Expanding Section 8 HCV is one part of the overall Sanders housing plan, which his campaign estimates would cost $2.5 trillion. Sanders proposes to pay for it with a wealth tax on the top one-tenth of 1% of households. The wealth tax would only affect about 175,000 of the wealthiest households.

Biden’s proposal would cost $640 billion. He would raise taxes on corporations and large financial institutions. $300 billion would fall under Biden’s $1.3 trillion infrastructure plan, with the rest paid by a financial fee on certain liabilities of companies with over $50 billion in assets. The infrastructure plan will be funded by reversing the Trump corporate tax cuts, closing tax loopholes, and ending fossil fuel subsidies.

Both candidates would fund their housing plans with some kind of rollback of the Trump tax cuts. My view is that with a Democratic Congress, it is feasible to fully fund HCV as part of a larger rollback of the Trump tax cuts. I like the Sanders funding proposal because it is specific and narrowly focused so that it does not affect more than a few of the wealthiest people in the country. It may be easier to pass something like that through Congress instead of broader tax legislation.

I really like that Robin pointed out the problems with landlords and the supply of apartments. We published an article last year about why landlords do not take vouchers. It also talked about some of the incentives Robin mentioned that are being offered to get landlords to accept Section 8 tenants. I am OK with tax deductions for energy efficiency upgrades, but landlords have an obligation to keep properties up to code no matter what incomes they serve. Also, I am not too keen on giving grants to for-profit operators. Nonprofit organizations qualify for grants because they serve charitable purposes.

Robin: Chris is right, landlords should keep their units up to code but housing codes and Housing Quality Standards are minimal requirements. I can’t tell you the number of  drafty old Victorians that I have inspected and passed because I had to abide by inspection requirements. And if I attempted to request the owners go above and beyond, I was hit with complaints. Families renting in these old houses pay enormous heating bills because of lack of insulation, rattley old furnaces and windows barely caulked, but were up to Housing Quality Standards (HQS). Helping private Housing Choice Voucher landlords with upgrades would also help the families renting from them. HUD could step up HQS requirements but then again, landlords would be even more reluctant to rent to voucher families knowing they would have to make more repairs.

Chris: I totally agree with Robin’s perspective on consolidating and streamlining administration of the voucher program. There is definitely a lot of duplication of effort, and lots of inefficient small programs. The only possible downside may be that rural communities end up with less access to rental assistance.

Nathan Brunet (Moderator):

Both candidates have proposals to help cost-burdened renters. Sanders calls for national rent control, while Biden proposes a renters tax credit. What are the pros and cons of each approach?

Robin: A tax credit works for families that have enough income to tax. What about families living in extreme poverty who can’t wait until the next year to get a tax refund to help pay their rent?

Sanders’ national rent control proposal caps rent increases at 3 percent or the current inflation rate, whichever is higher. This would help renters already in place but would discourage renters from moving out. Families looking for units to rent or need to move could have an even harder time finding new units. The difficult task of monitoring and enforcing a national rent control program would take the creation of a whole new HUD division and add considerable administration costs. 

The Housing Choice Voucher program has a type of rent control built into the program, called Fair Market Rent (FMR) which keeps a cap on rents charged by landlords. With this feature of the program, came an assortment of problems for voucher holders.   I’ve seen many cases where unscrupulous landlords tried to tack on charges such as key charges or high application fees. Landlords sometimes tried to charge additional rent under the table and some even tried to charge fees to make simple repairs. I could foresee this happening on a larger scale, with a national rent control program.

Chris: I like both approaches, and to be honest, the nation really should have both. Rent-gouging is never justified. National rent control will benefit all low-income renters. I was also a big supporter of a renters tax credit when Kamala Harris first proposed it. However, Biden’s proposal has narrower income targeting and will not help as many renters as the Harris legislation would. It will, however, use the tax code to provide a de facto expansion of Section 8 rental assistance to more low-income families. The tax credit will allow those who make too much to qualify for Section 8, but not enough to pay the rent, to pay 30% of their income for housing.

The pros for rent control are limiting price-gouging, the certainty of how much rent will increase, and that it promotes long-term housing stability. The cons against rent control are arguments that the government should not be artificially capping the market, and that landlords might stop renting because they can’t raise rents enough to keep up with costs. While this has not generally happened in cities that already have rent control, it could be a concern in some markets.

I agree with Robin that tax credits have limited impact for Extremely Low-Income (ELI) households. Under both the Biden and Sanders plans, though, ELI renters would be receiving Section 8 vouchers.

One problem with tax credits is that you only receive them once a year with your tax refund. The Harris Renter Tax Credit legislation would allow people to receive their refund monthly. I do not know if Biden’s proposal has this feature, but it would make it a lot more effective.

Robin is right that people tend to stay longer in rent-controlled apartments. In some markets it can be a problem, especially with older renters living in larger apartments as children grow and leave. But this is also part of the positive impact from rent control. It helps stabilize families and neighborhoods.

I had not thought about the administrative impact on HUD if rent control was enacted across the nation. I assumed it would be administered by local governments, but it makes sense there would be some national oversight. This would not be the first large-scale roll-out of rent control. We wrote an article last year about Oregon enacting statewide rent control.

Nathan Brunet (Moderator):

While there are some notable differences in each candidate’s approach, I am struck by how similar they are overall. Even though they differ greatly on other issues, such as healthcare, is this a good sign that affordable housing would do well under either candidate?

Robin: It’s been broadly acknowledged that affordable housing is a serious problem in this country and a full blown crisis in some cities and areas. Ideas are in great supply but choosing and implementing the right programs to provide adequate affordable housing takes understanding, listening, consensus building, and finally implementation. Both Biden and Sanders are capable.

In my opinion, Biden will make sure the right people are working on common sense solutions. Sanders will also do well, but after reviewing both Sanders and Biden’s proposals, it does appear that Biden has more specific solutions.

Biden’s initiative to help homeless Veterans was addressed with a similar program in 1992 with the Veterans Affairs Supportive Housing (VASH) program and expanded under the Obama administration. His proposal to make it easier for victims of domestic violence to keep their vouchers by cutting red tape, was already put in place in the last years of the Obama Administration. I’m not sure to what extent Biden was involved in creating those policies, but I’m happy to see that he wants them to continue.

Chris: I feel that affordable housing has become a much more prominent issue in this campaign than in any past one. This is an issue with extreme contrasts between the Democratic proposals to expand housing opportunity and supply vs. President Trump’s track record of proposing severe cuts to affordable housing and community development programs. 

I like that both Biden and Sanders touch on all the critical aspects of affordable housing. They each support fully funding rental assistance, tackling the eviction crisis, strengthening tenant protections, and expanding fair housing rights. They both propose paths to homeownership for low-income renters. Most importantly, they both support huge increases to repair existing public housing and build new units. Both of their plans would be a major step forward for low-income renters.

I like that Biden and Sanders have the same plan to fully fund Section 8 HCV, and I agree with Robin that Biden’s approach has appeal because it builds on programs that are working now. They just need enough funding to meet the need.

I also like Sanders’ more sweeping proposals on rent control and public housing. We need a wide-ranging tool to reduce the tide of evictions and reboot in how we think about making public housing sustainable.

Either candidate will be a vast improvement over the massive affordable housing cuts proposed by President Trump every year.

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