Sequestration would cut funding for rental assistance

February 5, 2013 at 11:18 am

We’ve posted a lot about the fiscal cliff and the looming across-the-board budget cuts, known as “sequestration” that are now set to kick in on March 1. With such a broad scope, sequestration will have far reaching impacts on many different people and communities. So far we’ve talked about the impact on credit unions, on small businesses, and on Native communities. Today we’ll look at the impact on low-income families who rely on rental housing assistance.

The Center on Budget and Policy Priorities (CBPP) reports that the federal spending cuts will eliminate funds for 100,000 vouchers for low-income families, will cut homeless program funding by $100 million, and will cut public housing funding by $300 million.  In North Carolina, cuts to community development and housing programs will total almost $6 million. An important point to note is that these cuts would be on top of already reduced funding for federal housing and community development programs, which have been cut by $2.5 billion, or 6 percent, nationally since 2010.

These cuts would be devastating to the almost 10 million people who rely on federal subsidies, in the form of Housing Choice Vouchers, Section 8 Project-Based Rental Assistance, and Public Housing, to afford a place to live. As CBPP’s analysis shows, 88 percent of households in these programs in 2010 were elderly, had disabilities, worked, had recently worked, or were subject to work requirements through other programs. Forty percent were households with children.

Programs like housing assistance are critical in helping low-income families either stay out of poverty, or at least ease the impacts of poverty for their families. Back in September we re-blogged a piece also from Progressive Pulse that highlighted another CBPP analysis showing that safety net programs– housing assistance and food stamps– help to lower the poverty rate. Without these supports, many more families would fall below the poverty level.

In a struggling economy, cutting these benefits would only serve to plunge many low-income families further into distress. The ripple effects of sequestration would impact the economy overall, sending us further away from a true recovery. But unless Congress acts, these cuts will go into effect in just a few weeks.




Entry filed under: Economic Development, Economy, Housing. Tags: , , , , .

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