Solving the housing crisis requires long-term federal investment

The symptoms of America’s housing crisis are staggering. The average price of housing is surging across the country. Not a single state has an adequate supply of affordable housing for extremely low-income households. And at last count, more than 580,000 people were unhoused, with marginalized groups suffering homelessness at disproportionate rates. In the Bay Area, where we live, the situation is so bad that the UN has called it “cruel and inhuman.” 

While our housing and homelessness crises have been exacerbated by the pandemic, the root causes go much deeper. One of the primary factors has been decades of underinvestment by the federal government in addressing the housing needs of the lowest-income Americans. And while the Biden administration recently announced executive actions to help close the housing supply gap, reforms to existing programs at current investment levels will only take us so far. Congress must also approve a budget that will counteract historic underspending.

Starting in the 1980s, federal policymakers instituted several waves of cuts to critical safety net programs, including ones that low-income residents use to maintain stable housing. From 1996 to 2016 alone, overall federal spending on housing relative to GDP dropped 30%. The few programs that have expanded haven’t come close to meeting the immense need. For example, our local Housing Authority recently reported that its allocation of housing vouchers had grown by only 8 percent over the past 20 years—even as we’ve seen growing income inequality, stagnating wages, and rising cost-of-living turn the Bay Area into one of the most unaffordable regions in the country.

This lack of investment in families facing the most vulnerable circumstances is even more shameful given that federal housing funding has disproportionately benefited higher-income households. In fact, the money spent on the mortgage tax deduction and capital gains exemption for homeowners has consistently exceeded the funding allocated to federal housing subsidies for low-income renters.

We need substantial, long-term federal investment in order to counteract decades of limited action. This would include investing in proven solutions, such as:

Ongoing emergency rental assistance to help low-income residents avoid eviction. The ripple effects of COVID-19 continue for low-income households. In California, 76% of extremely low-income households (of which there are almost 1.3 million in the state) are spending more than half of their income on rent. Nationally, the cost of rent rose 14% last year and is expected to rise another 10% this year. The federal government must increase spending on rental assistance accordingly, as well as make it more accessible to those most in need.

Ensuring that everyone who qualifies for housing vouchers has access to them. According to the Center on Budget and Policy Priorities, only one in four families eligible for a federal housing voucher received one. Research shows that housing vouchers sharply reduce homelessness. Among families with children, vouchers can lead to a host of positive outcomes, including fewer behavioral problems, less frequent switching of schools, and decreased likelihood of being placed in foster care. This wide-ranging impact is well worth a larger investment.

Increasing funding for the preservation and construction of permanent affordable housing. Our country is suffering from a severe lack of affordable housing, particularly at the deepest affordability levels. In fact, there are only 36 affordable and available rental homes for every 100 extremely low-income (ELI) renter households. Addressing this severe shortfall requires significant long-term investment from our federal government, with a priority on developing more housing that’s affordable to ELI households. This could be done by expanding the Low Income Housing Tax Credit, which is currently the primary source of financing for affordable housing in the U.S., or increasing funding for the national Housing Trust Fund, which deploys money to states to help build, preserve, and rehabilitate affordable housing. Investing in more deeply affordable housing brings a multitude of other community benefits as well. For example, a recent report commissioned by Silicon Valley Community Foundation found that building more housing could help reverse long-term declines in student enrollment across Santa Clara County. 

President Biden’s original Build Back Better (BBB) legislation allocated $150 billion to address these critical housing needs—a historic level of investment in housing that advocates have long recommended. If enacted, either through a revised BBB or piecemeal legislation, robust federal housing investment would not only put a roof over the heads of thousands of families, it would help counteract persistent wealth inequality and racial disparities that hold our country back. 

Good housing is good infrastructure; it’s foundational to the health of families, communities, and our economy. But, for far too long, the federal government has disinvested in this critical pillar of our society, causing unnecessary and enormous suffering. It’s time for Congress to finally make the long-term investments we need to support our communities.

Nicole Taylor is CEO of Silicon Valley Community Foundation, the largest community foundation in the nation.Jennifer Loving is the CEO of Destination: Home, a public/private partnership implementing collective impact strategies to end homelessness in Santa Clara County.