This morning Minnesota Public Radio aired a report showing childhood poverty is on the rise in Minnesota.  According to figures released by the Annie E. Casey Foundation:

The poverty picture in Minnesota has two faces. Government statistics continue to show that Minnesota’s poverty rate is second lowest in the nation behind New Hampshire.  However, the numbers also show   Minnesota’s child poverty rate has increased by 23 percent from 2000.

In the report, the Childrens’ Defense Fund‘s executive director, Jim Koppel, talks about how poverty today is different poverty a couple generations ago:

Growing up in a lower-income family in Ohio, Koppel says he witnessed family and neighbors with little more than a high school education, sometimes less, moving out of poverty by landing low- and semi-skilled manufacturing jobs that paid something close to a living wage.  These days, Koppel says, getting out of poverty is a tall order due in part to the education and training needed to land a job.   “We don’t have the gradual slope where you can kind of take baby steps into the next economic level.”

Housing Sense Blogger, Kim Skobba

Note from Michael Dahl, HOME Line Public Policy Director:  The following is a blog post ripped from the pages of the Housing Sense blog.  If you aren’t already subscribed to this very informative blog, check it out by visiting:  http://housing-sense.blogspot.com/

In March, guest blogger Michael Dahl wrote about the inherent unfairness of the mortgage interest deduction. At the time, I thought he was pretty brave to bring up the issue. The mortgage interest deduction is sacred in our home ownership society. Yet these are tough times and no tax expenditure, even the mortgage interest deduction, is off limits.

A new report by the Urban and Brookings Institutes examines the impact of changes to the MID by income, race, and location of homeowners. The authors estimate the effects of eliminating the deduction and of replacing it with four options that include different credit formulas. Here is what they found:

• Eliminating the MID would affect  high-income taxpayers more than for lower income taxpayers. Not surprising, since they are the primary beneficiaries of the MID. However, the very highest income taxpayers, would experience a relatively small loss in income because their mortgage costs as a share of income are lower than for other groups.

• Replacing the MID with one of the four tax credit options examined would benefit taxpayers in the bottom four quintiles of the income distribution and hurt taxpayers in the top quintile.

• Replacing the MID with either of the non-refundable credit options would raise average taxes among Asians, lower average taxes for blacks and Hispanics, and leave average taxes on whites about the same.

• Eliminating the MID would raise taxes more for suburban residents than for those in central cities or outside metropolitan areas.

Many of you may be thinking that changing the mortgage interest deduction in the midst of a housing crisis is a bad idea. This might be the case if we needed more higher income households to move into home ownership, but as the authors of this study point out:

…the current MID is not a cost-effective tool for increasing homeownership because its main beneficiaries are not individuals on the margin between renting and owning.

The mortgage interest deduction was not designed as a tool to encourage home ownership. If we are looking for incentives to increase home ownership, then we need policies that benefit those on the margin between renting and owning.

Today’s news shines a light on two separate issues that don’t get that much attention by the public:  the mortgage interest deduction and the Livable Communities Act.

The New York Times Business Section has a great piece on the mortgage interest deduction.  The article notes that in 2009, according to the Congressional Budget Office, government subsidies for housing amounted to a staggering $230 billion … and most of those subsidies went to higher income households!  Among the questions the article asks is:

“Why should the government help me buy a second home? Why should it subsidize a refinancing?”

and it points out that:

“The communities that survived the housing bubble the best were the ones that had the highest percentage of renters.”

Check out the article, “Wake Up Time for a Dream.”

And, today’s Star-Tribune includes a “Commentary” by Tim Thompson of the Housing Preservation Project.  In the piece,  “Affordable housing takes a hit in the metro”, Thompson notes that the Met Council took a step backward by lowering the goals for how much affordable housing Twin Cities communities should produce.

The point of these goals should be to encourage cities to use local tools — density bonuses, accelerated permitting, other developer incentives — to squeeze more affordability out of the public resources we’re getting.

With falling incomes, one has to wonder where households of low- and modest-means are going to live?

HousingLink released its first quarter report for 2010 on Minnesota foreclosures, and it is not good news.  Minnesota reached its second-highest level during the current housing crisis with a total of 6,879 foreclosures.  What makes this today different than the foreclosures we saw a couple years ago — foreclosures due to predatory lending practices?  Today, unemployment and falling home values are forcing more middle-income homeowners into foreclosure.  Check out an article in today’s Star-Tribune Business Section,Minnesota sees more foreclosures coming, for local reaction to the report.

In related news, and also in today’s Star-Tribune, check out the article Minneapolis keeping an eye on foreclosures.  The city is seeing an increased number of formerly-foreclosed properties turn into rental units.  The problem, according to the article:

problem investors are still out there, the report’s authors said, citing buyers who make only minimal repairs before flipping houses, those who buy with little investment and either rent the property or hold it vacant until the market improves, and some who try fraudulent rent-to-own schemes.

Last week, the National Low Income Housing Coalition released its annual report “Out of Reach” with a detailed picture of national, state-by-state, and local housing markets.  This invaluable report has told us for years that affordable rental housing is scarce.  Using a measure called the “housing wage,” NLIHC reports state-by state and county-by county “the full-time hourly wage one would need to earn in order to pay what HUD estimates to be the Fair Market Rent (FMR) for an apartment, spending no more than 30% of income on housing costs.”

Look to today’s Star-Tribune for an excellent article connecting the local data to the daily struggle to find housing:  ‘A housing crisis for the working poor.’   The article reports:

Given Twin Cities rent levels, a person needs to earn $17.29 an hour to spend 30 percent of income on a “modest two-bedroom” apartment … The mean renter’s wage in the Twin Cities is $14.54 an hour, according to the coalition. Statewide, the income needed for a two-bedroom apartment is $15.50 an hour while the mean renter’s hourly wage is $12.66.

The Star-Tribune article interviews a very determined renter and a number of local housing advocates.  Sara Wenzel of St. Stephen’s Housing Services notes that the people she helps routinely spend 50 to 60 percent of what they earn to rent basic, safe property.

Check out “Out of Reach’s” Minnesota data or look into information on housing in your county.

Here are just a few items I found interesting from a national perspective:

• There are 9.2 million extremely low-income renters (those earning 30% or less of their area’s median family income) but only 6.1 million units affordable at that income level.  Worse still, if you look at apartments that are both affordable and available, the number shrinks to a mere 3.4 million units.
• Recent HUD data shows a 25% increase from 2005 to 2009 in the percentage of movers who joined an existing household, or “doubled up.”
• As of 2008, 71% of extremely low-income renter households spent more than half of their income on rent.

Homeless numbers way up. Wilder Research

This morning, the Star-Tribune reminded me that homeless continues to grow in Minnesota.

The article focused on homeless youth, recounting how abandoned and neglected teens sleep on buses, under bridges, or even in port-a-potties.  I honestly don’t understand how anyone can make it for long living like that.  Even more so, I can’t fathom how society tolerates such injustice.

I feel too young to be saying, “Remember when?”  But that’s exactly what I found myself asking after the article reminded me of the study Wilder Research conducts every three years to find out who is experiencing homelessness in Minnesota.

Back when I started as a college activist fighting to end homelessness (in 1989), there were a roughly 3,000 people experiencing homelessness in Minnesota on any-given night.  Today, the number tops 9,400!  This tells me two things:

1. It wasn’t always this bad … so doesn’t always have to stay this bad.
2. Society has found it tolerable to let more and more vulnerable people sleep on the streets, in shelters, or in places not meant for human habitation.

Honestly, when are we going to wake up and say we won’t let another victim  of abuse sleep in a car?  When will we care enough to say that no one with severe and persistent mental illness should live under a bridge?  When will our politicians have the backbone to say that no child, no youth … heck no one … should be so outcast as to have to call themselves homeless.

Or, as my friend Monica Nilsson often asks, “when will the public have the political will to demand that we end homelessness?”

Friends, we know how to end homelessness.  In fact, it costs less to do so than to pay for expensive interventions like emergency rooms, detox centers, jails and prisons, and mats on church floors.  To find out what you can do to end homelessness, check in with the Minnesota Coalition for the Homeless.

Our friends at the National Low Income Housing Coalition continue their work to fund the National Housing Trust Fund.

Here’s a message we just got from them today:

The National Housing Trust Fund campaign continues to urge Congress to fund the NHTF as a way to help communities build and preserve housing for people with the lowest incomes, as well as to create needed jobs. As the next step in our campaign to capitalize the fund, the NHTF campaign is calling for organizations across the country to SIGN the following national sign-on letter:

***

We, the undersigned organizations, urge Congress to act soon to provide the initial funding for the National Housing Trust Fund (NHTF). We are requesting $1.065 billion be provided immediately to the NHTF: $1 billion to capitalize the NHTF and $65 million for project-based vouchers to couple with NHTF capital grants.

The NHTF was created in the Housing and Economic Recovery Act of 2008 (HERA) to address the severe shortage of rental homes that are affordable for the lowest income families, but it has not yet been funded. The President proposed funding for the NHTF in his FY10 and FY11 budget requests.

In the United States today, there are only 37 rental homes available and affordable for every 100 households with incomes below 30% of their area median.  A scarcity of housing that the poorest families can afford is the principle cause of homelessness in the United States.

Investment in the NHTF will create good jobs. Every $1 billion provided to the Trust Fund will support the immediate construction of 10,000 rental homes, creating 15,100 new construction jobs and 3,800 new jobs in ongoing operations.

We urge Congress to provide this badly needed funding at the soonest possible opportunity.

***

Can your organization join the letter to help urge Congress to action? Click HERE to add your support today.

It is crucial that a large number of organizations sign on to this letter of support. Once your organization has signed, please ‘forward’ this email to send it on to friends and coworkers.

Need to learn more about the National Housing Trust Fund before signing on? Click here for background information.

THANK YOU FOR SIGNING THIS LETTER TODAY!

Check out the Star Tribune’s second letter to the editor today one of HOME Line’s proposals for how to stop slashing State affordable housing programs.

The letter to the editor and a recent post I made on Kim Skobba’s blog, “Housing Sense,” point out how the mortgage interest deduction is not a well-targeted tax deduction.  It costs state and federal governments billions of dollars and goes mostly to the highest income households.

If you are interested in digging deeper, check out this New York Times piece from a few years back.  It provides a great history of the mortgage interest deduction.  Actually, that particular deduction is the only remaining loophole that once allowed people to deduct any form of interest off their reportable income.

Yep, you used to be able to deduct credit card interest off your state and federal taxes.  In the 1980s, the Feds figured out that that was just encouraging people to increase their debt load.  However, heavy lobbying by the housing industry preserved the interest on home mortgages.

Is that deduction encouraging people to buy more home than they can afford.  Several conservative economists believe so.  However, it is also, quite simply, not a well-targeted tax deduction.  At the title of this blog post says:  we are subsidizing mansions, second homes, and $1 million mortgages.

Here’s a note from one of our blog-followers: Thanks for taking on the sacred mortgage deduction. Limiting the deduction would be a good policy move anytime, but especially at a time when there is no money to fund the basic services. Some may argue that eliminating the mortgage interest deduction would be bad for homeownership. Still, as you point out, the interest paid on credit cards used to be deductible. Removing the deduction did not hurt the industry.

Housing Sense Blogger, Kim Skobba

Several years ago, I conducted a study on tenant screening agencies, which came about due to concerns over their reporting inaccuracies. The study highlighted the vulnerability of renters who are last to know about the information being reported and yet are left with the damaging consequences when negative information appears.

Tenant screening reports are a tool used to evaluate prospective by the majority of landlords in Minnesota. Tenant screening agencies amass large amounts of credit history and public records data quickly and efficiently. Collecting data in this way keeps costs down while giving landlords the sense that no stone has been left unturned. While this is an effective business model, it results in a system in which renters are often judged based on reports that contain inaccurate and misleading information.

The reporting of eviction actions is an important example. Currently, tenant screening agencies are allowed to report evictions regardless of whether the landlord wins in court. The majority of evictions end in settlement, meaning that many renters are unnecessarily carrying negative information that will have a significant impact on their ability to obtain rental housing.

The fact that eviction actions carry such weight makes the tenant screening system open to abuse. An article in The Yale Law Journal states that screening reports are open to abuse “not only because they make the threat of eviction action a stronger tool for disciplining tenants (because the action will be ‘reported’) but also because the item on the report is fundamentally a description of the landlord’s actions rather than the tenant’s actions.”

The Tenants Bill of Rights legislation includes a provision that would limit tenant screening companies to reporting evictions only when the landlord wins in court. This legislation would increase both the accuracy and fairness of tenant screening reports. It will also remove a barrier for the poor, women, and people of color – the three populations who are disproportionately affected by eviction and thus face a higher risk of being excluded from rental housing due to a misleading tenant screening report.

Check out Kim’s great blog:  Housing Sense

Housing Sense Blogger, Kim Skobba

A friend and colleague of mine, Kim Skobba, has a great blog for people who want to be in the know regarding affordable housing … Housing Sense.  She’s only been blogging for a little over a month, but every post tips me off to new research I need to know about.  What’s even better is that she extracts the real-zinger data and offers her own common sense spin.

Next week, Kim and I have decided we are going to be Trading (Blog) Spaces for a day.  She will be a guest blogger on HOME Line’s Policy Blog, and I will offer my two cents to Housing Sense.

If you haven’t already clicked on the link to her blog, here’s a teaser of her post on the impact of foreclosures on Latino families …

The loss of a home through foreclosure is no doubt a traumatic experience. In their groundbreaking work, The National Council of La Raza and Center for Community Capital look at the social, emotional, and economic effects of foreclosure on Latino families. The study,  The Foreclosure Generation: The Long-Term Impact of the Housing Crisis on Latino Children and Families, examines the impact of foreclosure on family relationships, post-foreclosure housing accommodations, need for public assistance, social networks, and children’s behavior and performance in school for 25 Latino families.

The study provides a sobering look at the emotional toll and family instability associated with the loss of a home. While the study examines the loss of housing through foreclosure, I think that the experiences of the families in this study provide insight into the social and emotional impact of other types of forced moves (eviction, sale of property, renters in foreclosed properties).

Visit Kim’s blog for a snapshot of the report’s conclusions.