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Affordable Housing

The federal government faces a number of management challenges and policy issues in its efforts to support affordable housing.

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Following the 2007-2009 financial crisis, housing affordability in the United States worsened as homeownership declined and renting became more prevalent. The COVID-19 pandemic could worsen housing affordability if mortgage borrowers and renters fall behind on housing payments due to lost income.

To support affordable rental housing, federal agencies administer more than a dozen different programs that provide rental assistance payments, grants, loan guarantees, and tax incentives—such as the Department of Housing and Urban Development’s (HUD) Housing Choice Voucher. The government also supports homeownership by providing mortgage insurance, loan guarantees, direct loans for homeowners, and grants or loans for home repairs.

However, federal agencies face a number of management challenges and policy issues in their efforts to support affordable housing. (A number of our priority recommendations for HUD also relate to these key issues and challenges.)

For instance:

  • By the end of 2018, over 4 million low-income households were being served by HUD’s 3 largest rental assistance programs. HUD is responsible for ensuring that housing units provided under these programs are safe and sanitary. However, the agency needs to improve its efforts to address lead paint hazards in these housing units, as well as its process for inspecting properties to identify physical problems.

  • An experimental HUD program, the Moving to Work demonstration, gave 39 participating public housing agencies the flexibility to use HUD funding for purposes other than housing assistance—such as developing affordable housing and imposing work requirements and time limits on tenants. However, HUD’s oversight of this program has been limited, particularly in terms of collecting and analyzing information on what the program has accomplished and its effects on tenants. 
  • Multiple federal agencies provide assistance to low-income older households, including housing assistance from HUD and the U.S. Department of Agriculture (USDA) and health services from the Department of Health and Human Services. However, these agencies could better collaborate on older adult housing and health issues.
  • HUD’s experimental Rental Assistance Demonstration (RAD) program allows public housing agencies to convert their public housing-subsidized properties to long term Section 8 rental assistance contracts. This helps these agencies access additional funding, including investor equity, which is generally not available for public housing properties. The RAD program has numerous requirements intended to ensure residents whose units are converted through the program receive certain protections. However, HUD needs to better oversee the use and enforcement of these resident safeguards.
  • Developers can apply for federal Low-Income Housing Tax Credits to help them build affordable housing projects. The amount of credit depends largely on project costs. However, project costs vary widely and federal oversight of costs is limited. The Internal Revenue Service and the Treasury should use data on variables that affect cost—such as square footage and building type—to better monitor this tax credit.
  • USDA’s Rural Housing Service (RHS) provides mortgages to support affordable rental units for low-income tenants through its Rural Rental Housing Program. When these mortgages reach the end of their terms (mature), property owners may exit the program—and current law does not allow RHS to continue providing rental assistance when this occurs. As a result, tenants in properties with mortgages that are maturing may face rent increases or lose their housing altogether. Congress should consider granting RHS the authority to continue providing rental assistance to tenants in properties with maturing mortgages. RHS should also comprehensively plan for keeping properties with maturing mortgages in this program.

Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.

More Reports



Homeownership Mortgage ProductsThursday, March 15, 2018
Rising Rents and COVID-19Friday, June 26, 2020
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    • John Pendleton
    • Director, Financial Markets and Community Investment
    • 202-512-3489