Paul Ryan’s Budget and What It Means for Affordable Housing
August 14, 2012 Leave a comment
Presidential Candidate Mitt Romney has named Assemblyman Paul Ryan (Wisconsin) to be his running mate. You may remember the Assemblyman Ryan from our first episode of the sadly short lived Surreal Estate News. If you haven’t seen it, check it out here. All jokes aside, Paul Ryan is a fiercely conservative member of Congress and his libertarian views make him a Tea Party favorite. He is a self-avowed Ayn Rand devotee but differs from her when it comes to social policies, where he is decidedly more conservative. He is anti-taxes, anti-spending, anti-entitlement programs, anti-Medicare, anti-gay marriage, anti-choice, anti-birth control, anti-Social Security, the list goes on.
We don’t need to do a profile of Paul Ryan here; his nomination has led to veritable media frenzy and if you are looking for more information on his policies you don’t have to look too far. Rep. Paul Ryan is most well known for his radical budget which would slash trillions of dollars from the federal government in addition to reducing revenue. If you’re wondering how such a budget would affect affordable housing, you’ve come to the right place.
The budget battle was raging in March, 2012 when HUD Secretary Shaun Donovan testified before Congress. In his testimony, Shaun Donovan answered questions about the implication of the Ryan budget cuts on HUD programs. Here is a summary of Donovan’s response:
- 585,000 units of lost housing from the Housing Choice Voucher Program
- 425,000 units of lost housing from the Project Based Voucher Program
- As many as 180,000 units of lost housing from various homeless assistance programs.
- 17,000 jobs lost from Community Development Block Grants (CDBG)
- Tens of thousands of affordable housing units slated for construction through the HOME program would not be built.
HUD is a massive federal agency which is vital to providing housing to many low income New Yorkers. Combined, the Housing Choice Voucher Program and the Project Based Voucher Program provide housing to about 360,000 families in New York City, according to a study by CUP. Commonly known as “Section 8”, the waiting list in New York City its 130,000 families long, and has been closed. Further, such a drastic loss in CDBG would likely mean rapid deterioration of housing conditions in rent-regulated affordable housing. This is because HPD Code Enforcement is paid for nearly entirely by CDBG funds.
Paul Ryan’s budget also includes a “complete wind-down” of Fannie Mae and Freddie Mac, the GSEs that supply affordable home loans to millions of low-to-middle income homeowners. While Ryan and his free-market supporters claim that Fannie and Freddie are merely a burden to tax payers, economists argue that Fannie and Freddie are essential housing market stability. A plan to completely privatize Fannie and Freddie would, Secretary of the Treasury Tim Geithner warned in February, increase interest rates across the board and eliminate the ability of the Federal government to provide assistance in times of crisis.
Of course, Fannie Mae has been doing a fairly lousy job helping homeowners, so that’s another issue we’d love to delve into at a later date. The question is whether or not to throw the baby (government-guaranteed home mortgages) out with the bathwater (Ed DeMarco), and the answer is: no.
Mitt Romney has been trying to distance himself from the Ryan budget plan, but he has also hinted that if elected he would eliminate HUD all together. We don’t endorse political candidates at The Surreal Estate, but I can tell you we probably don’t want these two anywhere near the White House.