A recently released report by the Urban Institute addresses what they believe are issues with Federal housing assistance programs under new proposals and the recently enacted Tax Cuts and Jobs Act—reporting only one in five renter households who qualify for housing assistance actually receive any.
According to the research, the Tax Cuts and Jobs Act and the administration’s proposed fiscal year 2018 budget are expected to hinder access to housing assistance, which is a safety net for low-income households.
With millions of American households facing some type of housing instability, the report reveals that in 2015, 8.3 million renter households with low incomes lacked housing assistance and paid over 50 percent of their income for housing costs or lived in “severely inadequate” housing. In addition, 7 million people in low-income households were doubled up with family and friends—with another 1.5 million people experiencing homelessness.
However, according to a recent report by Zillow, doubled up living can work in one’s favor. As rents have outpaced incomes, sharing a home with roommates or with adult parents can give working adults the option to afford to live in more desirable neighborhoods without shouldering the full cost alone. In fact, the share of adults living with roommates is higher than ever before—at 30 percent.
Despite the concerns about new policies on housing assistance, DS News previously reported the Fed’s anticipation for economic boosts from the tax bill.
According to the report, Fed officials expect the recent tax cuts passed by Congress and signed into law by President Trump to boost both consumer and business spending, citing the tax changes as one reason the Committee boosted their forecast for 2018 GDP growth from 2.1 percent to 2.5 percent.
“Most participants indicated that prospective changes in federal tax policy were a factor that led them to boost their projections of real GDP growth over the next couple of years,” the Fed explained.
The Fed also noted, “broad equity price indexes rose over the intermeeting period, likely reflecting in part investors' perceptions of increased odds for the passage of federal tax legislation and an associated potential boost to corporate earnings.”
Additionally, leaders in the housing industry have previously addressed why they believe the new tax code will benefit Americans.
Chairman of the National Association of Home Builders (NAHB) Granger MacDonald previously expressed his support of the legislation and why it is good for housing.
"This comprehensive overhaul of the nation's tax code will help middle-class families, maintain the nation's commitment to affordable housing and ensure that small businesses are treated fairly relative to large corporations," MacDonald said. "Lower tax rates and a fair tax code will spur economic growth and increase competitiveness, and that is good for housing.”
David H. Stevens, President and CEO of the MBA, also stated his optimism for the inclusion of important real estate provisions in the conference report for HR 1.
"Specifically, we are grateful for the amendment to Section 13221 of the original Senate-passed bill offered by Senator Mike Rounds, to create an exception for any item of gross income in connection to a mortgage servicing contract."