Should affordable housing be aimed at the middle-class? What about a credit for poor renters? (Rich get most housing subsidie$)

Now that it's clear that so many Brooklynites are at risk of homelessness, it's worth reflecting on Do NYC’s Middle-Class Families Really Need Affordable Housing?, which City Limits asked 11/1/16:

With the de Blasio administration seeking to rezone neighborhoods across the city to promote the development of both market-rate and affordable housing, many local advocates have expressed concerns about a lack of units for families making the lowest incomes.
In some areas, however, there are also stakeholders arguing that their neighborhoods already have too much low-income housing and need families with higher incomes to support economic growth. They assert that it’s the middle class that’s stressed, with families unable to afford market-rate housing or qualify for low-income programs.
...Census data pulled by the Association for Housing and Neighborhood Development (ANHD) for eight neighborhoods that have received, are slated for or could possibly be in line to get a rezoning shines a light on which families really have the greatest need for affordable housing. In general, the data shows that households making less than $35,000 suffer far greater rent burdening than moderate-income households making between $75,000 and $100,000 a year. A family is considered rent burdened when they pay more than 30 percent of their income on rent.

(Emphasis added)

The article notes that in Brooklyn Community District 6, nearly half (48 percent) of the moderate-income households are rent-burdened. Then again, a large chunk of the Atlantic Yards/Pacific Park affordable housing--in the next two, "100% affordable" buildings--is for middle-income households earning  more than $100,000 a year. So much for a project pitched as rescuing the borough.

Who has it tougher

That's not to say that middle-income households have it easy, but... City Limits points out that many extremely low-income families are severely rent burdened, paying more than 50% of their income in rent:

In this regard, the data offers a new way to assess the final plan for East New York approved by City Council last April, revealing both good news and bad news. On the one hand, the final plan went farther than prior administrations’ rezoning efforts to encourage the creation of housing for families making between 30 and 40 percent AMI, or about $24,500 to $32,500 for a family of three. In East New York, roughly 85 percent of households in this income-bracket are rent-burdened. Assuming that the city’s current policy of allocating 50 percent of units to families in the local community district survives a court challenge, units created by the rezoning could help to alleviate this existing need. 

On the other hand, the plan does not include a significant number of units for families in the lowest income bracket, making below 30 percent AMI.

The de Blasio administration aims to dedicate 8% of units--as opposed to 2% under the Bloomberg administration--to families with incomes below 30 percent AMI. That can't move the needle too much.

A warning

Then again, as Brentin Mock wrote 11/3/16 in CityLab, In Search of Answers on Gentrification, citing the latest report from New York University’s Furman Center for Real Estate and Urban Policy:

There is no proven blueprint on how to fix this somewhat intractable problem. Perhaps the most important takeaway from the Furman paper is that its authors can’t vouch for any of the strategies they list as actually being totally effective in the long run: The report is clear to point out that it is only a collection of responses to gentrification, not a testament of what are the best practices.

A tax credit for renters

Next City reported 11/3/16 on a new plan to reverse the too-little-discussed paradox in which homeowners--most earning at least six figures--get more than double the subsidies that renters do:

A new paper from the Terner Center for Housing Innovation at UC Berkeley considers using the tax code to ease renters’ burden as well. The paper suggests the Federal Assistance in Rental (FAIR) credit might be structured in one of three ways, all of which aim to alleviate or eliminate rent burdens for households making 80 percent or less of area median income.

The most ambitious option, Rent Affordability, would provide a tax credit to ensure that renters pay no more than 30 percent of their income in rent, with the average monthly credit at $457. Presumably that figure would be much higher in New York City.

While this would cost an estimated $76 billion, it could save money on homelessness and other poverty-fighting measure--and it's close to the cost of the mortgage interest deduction.

Two other variations would cost less but potentially reach more people, albeit with lower benefits.