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Op-Ed: Deficit Reduction Key to Affordable Housing Options

Reducing our liabilities impacts our affordable housing plans and community development programs, says Mary Stompe of PEP Housing.

California recognizes the important challenge facing our nation — reduce the federal deficit while protecting our fragile economy and core government services such as affordable housing and community development, which are vital to middle- and low-income families and communities.

At the end of this year, Congress will make several critical choices that will impact the country’s fiscal future for years to come.  These choices will also directly impact the housing and communities of PEP Housing residents. California, as with other states across the country, has faced extreme rental and homeownership challenges in recent years and has not yet recovered from setbacks in the housing market. 

In addition, policy makers will also face the start of automatic, across-the-board cuts to most domestic programs and defense programs in our federal budget beginning in January 2013 including HUD and USDA affordable housing and community development programs.  These cuts, known as “sequestration,” were adopted as part of the Budget Control Act (BCA) in 2011 as a mechanism to spur deficit reduction agreement.

These indiscriminate cuts would have serious ramifications for our state and local economies and for thousands of middle- and low-income families in need of resources that support stable housing and vital communities. Indeed, for California, the effects would be devastating; 25,602 families in California who are currently affordably housed would lose their rental assistance and be at risk of homelessness. The state would also lose $28,775,482 in vital funding.

California already has an affordable housing shortage of 910,063 units for low-income families; reducing funding will only increase the housing challenges the state currently faces.  This funding has been a critical source of funding for PEP Housing. We used Community Development Block Grant funds to help fund an affordable senior housing project, Acacia Lane Senior Apartments in Santa Rosa, a 44-unit senior property serving very-low-income seniors. 

While there is broad agreement among lawmakers of both parties that sequestration could be very damaging to our economy, security, and investments in the future, there is not agreement on a deficit reduction replacement.  Failure to include significant revenues in any effort to replace the sequester could be even more damaging to the middle- and low-income working families and to our state and municipalities that rely on funding from the departments of Housing and Urban Development and Agriculture.  

The House-passed budget is an example of an approach Congress might take if it rejects a balanced approach to deficit reduction along with responsible budget cuts. The House plan would cut non-defense discretionary programs by 22 percent in 2014, much deeper than those resulting from sequestration.  California alone would see a cut of $2,979,000,000 in 2014.  Cuts of this magnitude would force our state and its municipalities to reduce the quality and reach of our basic public systems or to cut other services.

By contrast, a balanced deficit-reduction plan that includes significant new revenues almost certainly would lessen the resulting cost shift to states and localities.

We cannot expect middle and lower-income Americans to carry the burden of deficit reduction. The only way to prevent this from happening is to ensure that significant revenues are part of a deficit reduction package, just as every bipartisan deficit commission has concluded is critical. 

The nation is on an unsustainable fiscal course, and substantial changes in policy will be needed to right the ship.  Congress must adopt a balanced approach in tackling our nation’s fiscal challenges in order to protect the middle- and low-income households who are most at risk.

Mary Stompe of Novato is executive director of Petaluma-based PEP Housing, a nonprofit corporation dedicated to providing low-income seniors with quality affordable housing, housing support services and advocacy. 

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Roger December 20, 2012 at 05:47 PM
Mary, yes we will need both cuts in handouts and higher taxes on the rich. Time to be adults. A no brainer. Tax credits to rich developers for AH may be cut in upcoming tax reforms. Also, a mobile workforce made America great. The dust bowl in the 1930s in the mid West brought many workers to California. There are tons of open diverse jobs in the new oil boom states, such as N. Dakota, West Texas, and Pennsylvania. The private sector is building new homes there, not via handouts. Some Californians are moving there. Good for them.
Jerome J Ghigliotti Jr December 21, 2012 at 03:40 AM
This is a tempest in a teapot. The leftists can continue spending money on unfunded social engineering in order to force all of California, and the nation, into cookie cutter communities without any communities and China will probable not call our debt due until????? Spending cap, what spending cap? It is not a cap if they continue to raise it every year.
Tired January 30, 2013 at 03:10 PM
Thanks Mary, Couldn't agree more. The rental market is so tight right now as demand keeps increasing when people can no longer afford their homes. I know several families who have been evicted this year from their homes because they couldn't keep up with the mortgage payments. But finding affordable housing has proven impossible for them. One is staying in a garage of a relative (yes the whole family) and the other has moved to Petaluma and is commuting to Novato for all their activities, church etc. Drives me crazy that people here complain about how much affordable housing we have; do they not know how long the wait lists are at the few places we have? And most of them aren't really that affordable anyhow. They are still $1,500 month rent or more for a 2- 3 bedroom. Something will need to be done, and fast.
Jerome J Ghigliotti Jr January 30, 2013 at 06:21 PM
@Tired, I could not agree with you more. My concern is that public housing, more often than not, goes to the least deserving. Marin Housing refuses to answer my inquiry as to how many public housing beneficiaries are evicted when convicted of serious crimes, as is required by HUD. My only conclusion can be that they are not evicting these least worthy. There is no "privacy" excuse because eviction is a court public record process.

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