I have made myself an annoyance to many in the for-profit housing development industry by my constant insistence that housing funded with public resources be created that is affordable to families with incomes at 30% of the area median family income. Recently, I attended a meeting on the uses of the Texas Housing Trust Fund at which advocates for people with disabilities made the case that the focus should be on even poorer people, with incomes below 16% of the median.
In the state statute governing the Texas Department of Housing and Community Affairs (TDHCA) income levels of program beneficiaries are defined. These beneficiary groups begin with Moderate Income (120% of median) and Low Income (80% of median) and continue to Very Low Income (60% of median) and end at Extremely Low Income (30% of median). There is no income category below that. This is ignoring a huge number of the Texas households most in need the disability advocates were saying. And they are correct.
The housing programs available to state, and to local governments for that matter, provide significant funding through mortgage revenue bonds to households earning the top two levels of income. The bulk of the housing resources are targeted to families in a narrow income band immediately below the Very Low Income (60% of median) category through the Low Income Housing Tax Credit program (LIHTC).
For decades I have advocated for increased funding for families with Extremely Low Incomes (30% of median). I have enjoyed only limited success. The fact is state and local government depends principally upon federal housing resources to fund their housing programs. State and local governments are given flexibility by the federal government in most programs to use them to serve Extremely Low Income households, but seldom do so. Government officials cite the claims of housing developers that they cannot produce housing with rents affordable to families with such low incomes without additional financial subsidies. While this is not always correct, is is true that the State of Texas puts only about $22 million per year in state funds for affordable housing. At these levels the additional state subsidies necessary to house the poorest and most needy are not available in sufficient amounts to have a major impact.
I’ve elected to focus my advocacy toward housing Extremely Low Income families because, frankly, getting any significant amount of public funds for families that poor has proven to be extremely difficult. And the lower rents you advocate the more expensive it to the government is to get them.
The comments of the advocates for people with disabilities was a wake-up call however. I, along with almost all government officials have been pretending that 30% of median income is the bottom of the housing ladder — but it is not. There is a huge population of people at or below the poverty line in Texas who cannot even afford the rents for housing programs aimed at Extremely Low Income families. Thirty percent of median family income in Dallas ranges from $14,580 for a one-person household to $20,820 for a four person household. With rents set at one third of income, this would work out to be an apartment that rents for $405 for a single person and $578 rent for a four person household. With significant public subsidies these rants are marginally achievable while maintaining a minimal replacement and operating reserve (despite the arguments of many in the private housing development industry).
When you step down to 16% of median family income, the rents the disability advocates are pointing out the need for, the need for subsidies increases significantly. This is a single person household in Dallas earning $7,776 per year and a four person household with an income of $11,104. This translates into a rent for the single person of $216 per month and $308 per month for a household of four. These rent levels are actually below the levels necessary to pay operating costs and replacement reserves. So in theory, even if the cost of the housing development were 100% funded with a government grant there would still be a need to provide a rent subsidy in order to operate and maintain the rental unit.
This does not mean that we can ignore these household however. There is a tremendous need for housing in Texas for families at these rent levels. The US Census Bureau defines a one-person household living in poverty at $11,201, well below the $14,580 a single person in Dallas at 30% of median would earn. In the last census, 12% of all Texas households lived at or below the poverty level. That translates into more than 634,000 Texas households.
All of this leads me to suggest that we need to adopt an official category of family incomes to describe this population with incomes below the poverty level. That is the first step to recognizing that this population exists and deserves to be acknowledged and planned for as state and local housing programs are developed and funded.