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Ties Between Housing Policy and Welfare Reform Subject of Subcommittee Hearing

The Senate Banking, Housing, and Urban Affairs Subcommittee on Housing and Transportation held a May 1 hearing to examine the ties between federal housing policies and the reauthorization of the 1996 welfare reform law (P.L. 104-193).

“Securing safe, affordable housing is one of the most difficult obstacles to overcome for families working to achieve self-sufficiency,” said Subcommittee Chair Jack Reed (D-RI). He pointed out that only three states (Alaska, Wisconsin, and West Virginia) have benefits from the Temporary Assistance for Needy Families (TANF) block grant program high enough to use for housing assistance for families moving from welfare to work.

Sen. Jon Corzine (D-NJ) was the sole witness on the first panel. While he acknowledged that the 1996 law has achieved some success in moving people into the job market, “it has condemned many to low-wage jobs,” he said. “New Jersey can’t afford to use TANF funds for housing assistance,” he added, indicating that he and Sen. Paul Wellstone (D-MN) soon will be introducing a bill that would “recognize the role that affordable housing plays in getting people from welfare to work.”

Michael O’Keefe of the Minnesota Department of Human Services told the subcommittee that his state program has been a national model for welfare reform. The reason that it has been successful, he said, is that “we have the flexibility to design a program that meets the needs of our citizens.”

Mr. O’Keefe said that over a three-year period, more than 75 percent of families have left welfare to go to work. “Our program has focused on self-sufficiency through work,” he testified, and a majority of those who left welfare “have good jobs that pay approximately $9 per hour.” He continued, “We have seen a decrease in the number of cases of domestic violence, and 2-parent families have increased home ownership due to the program.”

Additionally, the state has developed a comprehensive strategy using TANF funds to address the housing needs of families leaving welfare. “We have invested $54 million in low to moderate-income rental units that families pay $350 to $450 per month,” said Mr. O’Keefe. “We also have used $20 million through the Habitat for Humanity program to build 5,000 single family homes, and we have spent $6 million for transitional housing for families that have been homeless,” he added.

Looking toward the reauthorization of the welfare law, Mr. O’Keefe urged the subcommittee, “Maintain the flexibility that we have, please, and give us additional flexibility in terms of housing.”

Ms. Barbara Sard of the Center on Budget and Policy Priorities told the subcommittee that nationally, “only about 30 percent of welfare families receive housing assistance, and the vast majority are left to rely on their wages.” She pointed out that recent data taken from a survey by her organization indicate that housing problems for families who have left welfare are getting worse. She cited as one of the biggest problems for welfare recipients “is the mismatch between where the jobs are growing and where affordable housing tends to be located.” She added, “Welfare policy fails to pay attention to the fact that where people live can be a hindrance to where they get a job.”

Ms. Sard identified a number of proposals to assist welfare recipients and those leaving welfare to obtain affordable housing. She highlighted a specific plan outlined in a proposal circulated by Sen. Paul Sarbanes (D-MD) that would provide welfare-to-work housing vouchers over a five-year period and would reward those housing agencies that have committed their own resources or are using state funds to provide housing assistance to people in welfare-to-work programs. She called the voucher proposal “superior in contrast to the super waiver contained in the Administration’s welfare plan.”

The super waiver would establish broad new waiver authority that would allow the Secretaries of the Departments of Labor and Health and Human Services, at the request of the states, to waive statutory and regulatory requirements of qualified programs under TANF in order that states may conduct demonstration programs. “Don’t go there,” advised Ms. Sard. The super waiver would make “drastic changes in the balance between Congress and the Executive Branch” and would allow states to abolish programs such as the public housing program, she said.

Robert Rector of the Heritage Foundation told the subcommittee that he takes a slightly different slant on housing programs for welfare recipients. He began his testimony by highlighting the success of the current welfare law. “Caseloads have dropped dramatically and employment by single mothers has increased 50 percent,” he said. “The key to the success of welfare reform has been the establishment of work or activity requirements for TANF recipients,” he highlighted, and recommended that “the same principle should be incorporated into housing programs.”

Mr. Rector criticized federal housing policy for “discriminating against marriage.” He explained, “Subsidized housing and other means-tested welfare programs penalize marriage because a single mother will suffer a substantial reduction or elimination of benefits whenever she marries an employed male.” He continued, “However, if the couple remains unmarried, the father’s earnings will generally not be counted in determining the mother’s welfare benefits and the value of those benefits will not be cut.” He recommended to the subcommittee, “Healthy marriage should be encouraged not penalized” in government housing programs by “altering the treatment of husbands’ earnings in determining rents and eligibility.”

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