For many Americans, the ultimate dream is to own a home. However, financial reality frequently erases that dream.
In its yearly Out of Reach report, the National Low Income Housing Coalition (NLIHC) reported that nationally the combined income needed to purchase a two-bedroom home is $13.50 an hour. In Virginia, that figure is slightly higher at $13.87 an hour. Many Americans simply can’t afford to fulfill their dream of home ownership.
That’s where advocacy groups like the NLIHC come it. Established in 1974, the NLIHC’s primary goals are to work with state affordable-housing coalitions to lobby Congress for more federal funding for housing.
“Our mission statement is that we educate, organize and advocate affordable housing for everyone,” said Kim Shaffer, a field director with NLIHC. “We work for a larger HUD [department of housing and urban development] budget,” Shaffer said. “Right now, our major campaign that we’re involved in is establishing a national housing trust fund.”
Responding to the NLIHC’s efforts, Rep. Bernard Sanders (I-Vt.) and 47 co-patrons in June 2001 introduced a bill in the House of Representatives that would set aside federal dollars for a national trust fund for housing. A month later, Sen. John F. Kerry (D-Mass.) sponsored a similar bill in the Senate.
Although Sanders’ bill failed to pass by the end of the legislative session, a total of 147 representatives, including Rep. James P. Moran (D-8th) of Alexandria, had signed on to back it.
On Jan. 23. of this year, Rep. Thomas M. Davis III (R-11th) of Fairfax officially added his support to the bill.
"Congressman Davis is aware that Housing is a severe national problem and certainly a problem in Northern Virginia where thousands of low-income residents including the old and disabled and families with children who are unable to afford decent housing," said David L. Marin, Davis' communications director.
“The way the legislation is now, that money would go to the state and municipalities, the way that the CDBG [community development block grant] home program does,” Shaffer said. “Anybody could then apply for this funding through the state.”
<mh>Surplus Money
<bt>Trust fund money would be available for public housing authorities, non-profit affordable housing developers, and for-profit developers as long as they were building affordable units as outlined by the legislation. “The goal of the legislation is to build and rehabilitate and preserve 1.5 million units over the next 10 years,” said Shaffer.
Both the Senate and House bills advocate using surplus money from the Federal House Authority to pay for the trust fund. “The FHA surplus is the money that’s paid in premiums to the FHA mutual mortgage insurance fund by owners of FHA-insured single-family homes,” said Shaffer. “Right now, people have the insurance on their single family homes. They pay the government for that. That fund has a surplus that we’re actually calling a profit. It’s actually creating revenue for the government. The profit right now is going to the general treasury.”
The position of the NLIHC is that the federal government should not be making a profit off of the FHA surplus. Instead, that money should be earmarked for housing production. “The last time that the audit was done, there was more than $16 billion considered extra revenue,” said Shaffer. “That takes into account a 2 percent reserve for an adequacy ratio. Our ultimate position is it doesn’t really matter to us where the source of funding is as long as Congress commits to putting enough money into affordable housing.”
A large influx of housing money for construction would not only benefit potential homeowners, it could have a positive impact on the nation’s economy. NLIHC estimated that a $5 billion investment in housing construction would initially generate more than 180,000 jobs. Once that investment was leveraged, it could garner 1.8 million jobs resulting in $50 billion in wages.
“As a member of the House Appropriations Committee, I have consistently worked to support HUD's budgetary needs and boost funding for low-income housing programs,” said Moran. “I have also helped support a number of worthy affordable housing initiatives by area nonprofit organizations and local governments. Despite these efforts, much more needs to be done.”
Moran pointed to the large number of elderly and low-income working families who were still spending half their income on housing as indicators that much remains to be done. “Nationwide, there are nearly 5 million households in a similar situation, many living in substandard conditions,” Moran said. “The National Affordable Housing Trust Fund Act helps steer additional resources toward this critical need."
Shaffer reported that the NLIHC has been gaining support from around the country. “There are about 30 national groups that are really active, either on the lobbying end or staff doing field work,” she said. “We are just passing 1,800 organizations around the country that have endorsed the idea of a campaign. We really have this broad-based support from every state in the country. People are starting to recognize that the affordable housing crisis needs to be dealt with.”