Trump Plan Would Raise Rents on Working Families, Elderly, People With Disabilities

WASHINGTON, April 27 -- The Center on Budget & Policy Priorities issued the following news release:

Reflecting a plan outlined in President Trump's 2019 budget, the Administration unveiled legislation this week that would ultimately raise rents by an average of 44 percent on more than 4 million low-income households with rental assistance. Working families, the elderly, and people with disabilities would pay more than three-fourths of the total $3.2 billion increase, forcing them to divert money from other basic needs and putting some of them at risk of eviction and homelessness. (See table for state-specific data.)

The legislation would raise rents for seniors and people with disabilities now receiving assistance, despite Administration claims to the contrary. Though most would see their rents rise more slowly than other households, they would pay more. And equally needy seniors, people with disabilities, and other households that aren't receiving assistance now but do so in the future would pay higher rents immediately.

The plan, which closely resembles a draft bill that was leaked in February, would let state and local housing agencies and private owners of subsidized housing evict or end rental assistance to people who don't work a specified number of hours. As we've explained, that would harm families, including working families that can't get the required number of work hours from their employers, while doing little to support work.

The plan would:

* Raise, from 30 to 35 percent, the share of a household's income that it must pay in rent if it includes anyone aged 18 to 65 who doesn't qualify as disabled under the Department of Housing and Urban Development's (HUD) limited definition. Rent increases would average $117 per month. Most of the increase would fall on low-wage workers, who typically have little if any money to cover added costs after paying for other basic needs and work expenses like child care and transportation.

* Raise the minimum rents for households with little or no income, most frequently by about $100 a month. Virtually all of the 700,000 or so affected families have incomes below the poverty line, so they would find it very hard to pay higher rents. The 1 million or so children in those families are already among the nation's most vulnerable; the Trump plan would expose them to added hardship and risk. (Some of the affected families could be eligible for hardship exemptions, but experience shows that those exemptions protect few families, and HUD has not complied with a 2016 congressional directive to certify that agencies are enforcing existing protections.)

* Eliminate income deductions that reduce rents for certain households that likely have high out-of-pocket expenses. About half of these deductions go to elderly and disabled households, nearly all of which would see rent increases from the change. The plan would also eliminate a child care deduction that enables many working parents with rental assistance to afford to work.

In addition, the plan would give HUD unlimited authority to impose additional rent increases, allowing it to drastically cut rent subsidies for low-income Americans without congressional approval.

The Trump plan doesn't seem to advance any coherent policy goal. For example, HUD says that it aims to encourage work, but key aspects of the plan would if anything discourage work, such as raising household rents to 35 percent of income (which would hike rents more sharply as earnings rise) and eliminating the child care deduction. And there's no evidence that raising minimum rents on destitute families will lead them to earn more.

Instead, the plan's main goal seems to be to offset deep cuts in federal rental assistance funding, like those in the President's first two budgets, by forcing tenants to pay more in rent. The rent increases would come too late to offset any significant part of the proposed 2019 cuts. But, in any case, raising rents on the nation's poorest families to offset funding cuts would be harmful and inequitable -- particularly in the wake of the new tax law, which will mainly benefit the nation's wealthiest households and most profitable corporations while boosting budget deficits by an estimated $1.9 trillion over the next decade.

See table here (https://www.cbpp.org/blog/trump-plan-would-raise-rents-on-working-families-elderly-people-with-disabilities).