To end homelessness, let’s rethink housing subsidies

There's no limit on write-offs for homeowners, but we put the squeeze on funding for the poor

ON A FRIGID NIGHT in January, a team from Project Place bundled up and hit the streets to participate in the City of Boston’s annual homeless census. Volunteers canvassed every neighborhood of the city into the early hours of the morning, as wind chill temperatures plunged to 25 degrees below zero. We offered bags filled with blankets, hats, and gloves as well as rides to shelters to the folks we encountered who were planning on spending the night on the streets.

I’ve been advocating for better services and public policies for those dealing with homelessness for nearly three decades. I feel like I’ve seen it all. But this year’s census felt more desperate and fraught than usual, and it wasn’t only because those without a warm bed risked their lives by staying outside. It’s because the problem of homelessness in the city and throughout the state is getting worse.

We simply do not have enough housing to meet demand at prices that working people can afford. As a result, rates of homelessness among young adults are rising, over 10 percent of students attending community and state colleges are homeless, and more families with children under age 18 in Massachusetts do not have a place to live. The overall number of individuals who are homeless has doubled since 1990. On any given night, the state’s 3,000 shelter beds are either full or operating beyond capacity with supplemental cots and sleeping bags.

As we tackle this crisis, we need to start thinking differently. We must abandon the scarcity mentality that imposes dangerous limits on what we believe is possible. In the United States today, we spend over $100 billion annually on housing subsidies. That’s enough to make homelessness a rarity in this country, but only if we change the ways we spend this money.

In 2015, just over $70 billion of the $100 billion spent on federal housing subsidies went to homeowners claiming the mortgage interest tax deduction. The remainder was spent on Section 8 rental assistance programs which provide subsidies to households with low incomes. The subsidy is calculated by subtracting 30 percent of the household’s monthly income from the monthly Fair Market Rent for a geographic region, which is set by the US Department of Housing and Urban Development based on local rental prices. In Boston, that would be $1378 for a studio apartment and $1563 for a one-bedroom.

There is a critical difference between how these two housing subsidies are administered. Anyone who is eligible for the mortgage interest tax deduction can claim it regardless of what the total annual cost of the subsidy is to the US Treasury. The money available for Section 8 subsidies is set in advance by the federal budget, which means that when the money runs out, no more subsidies will be issued. That is why waiting lists for Section 8 housing subsidies are long—so long, in fact, that the state’s centralized waiting list is only updated every two years.

Eighty-nine percent of those who claim the mortgage interest tax deduction are middle- and high-income households. HUD defines middle-income households as those earning between 80 and 120 percent of their area’s median income (in Boston, that would be from $60,400 to $90,550 for an individual) and high-income households as those earning more than 120 percent of the area’s median income. Because no limit is set on the total cost of the mortgage interest tax deduction, the federal government ends up subsidizing the cost not just of an eligible household’s first home, but also its second home and renovation projects undertaken on either. Meanwhile, demand is so high for housing subsidies among low-income people that they only go to those who are most desperate: people who have become homeless, people who are elderly, or people living with significant disabilities.

These public policy decisions have grave consequences for low-income individuals who are eligible for Section 8 assistance but too “well off” to have any hope of receiving it, as well as those earning middle incomes who rent instead of buy and are spending well over 30 percent of their monthly take home pay on housing. In regions like Massachusetts where the costs of housing are high, the ultimate costs can be devastating.

Late last year, HUD released its annual point-in-time report on homelessness. Nationwide, the rate of homelessness was relatively stable, increasing less than one-half of one percent from 2017 to 2018. But in Massachusetts it jumped 14 percent from 2017 to 2018—the highest increase of all 50 states.

Compared with other major cities, Boston does a good job housing those who are most in need. The city has dramatically reduced the number of veterans experiencing homelessness as well as those who are chronically homeless—adults with a disabling condition who have experienced homelessness for at least one year. But these rapid rehousing programs are time-limited and recipients are expected to move toward independence relatively quickly. This is an often impossible task without substance use treatment, psychiatric care, job training—or even transportation to available job readiness and behavioral health programs.

Meet the Author

Suzanne Kenney

Executive Director, Project Place
It will take many ideas and approaches to end the homelessness crisis in our state and country. More public investment in stabilization services for homeless individuals is desperately needed. Likewise, we need to invest more in developing housing that is affordable. We have the resources to end homelessness in this country, but we need a profound shift in how we see the problem. A true commitment to the principle that everyone deserves a safe place to live must include an honest reckoning with the consequences of our current federal policies around housing subsidies and the political will to do things differently.

Suzanne Kenney is the executive director of Project Place.