On the new HUD subsidy calculation — check the math

The headline “HUD plan raises rents on poor” covered the entire width of the front page of the April 28 edition of the Connecticut Post. The story began with the following alarming lead: “A plan by the Trump administration to triple rents for the nation’s poorest families is running into a wall of opposition from fair housing advocates and members of Connecticut’s Congressional delegation.”

Beneath the headline an insert quoted Connecticut’s Gov. Dannel Malloy claiming that the Trump “administration is proposing to triple rent for low-income families.”

Reading deeper into the article one discovers that rather than a plan to triple rents on the nation’s poor, the Trump administration is proposing an overhaul of a subsidized housing act that dates back to 1937. The proposed bill is entitled the “Making Affordable Housing Work Act.”

In the original 1937 act a recipient of federal housing support would have had to contribute 30 percent of gross income for rent, a fact that no one ever complained about during the administration of President Obama. The new bill would require a recipient of federal housing assistance to contribute 35 percent of gross income for rent.

For example, a poor person with an income of only $1,000 per month would have had to pay a rent of $300 per month during the Obama era, but under the new plan the rent would rise to $350 per month. An extra $50 per month is a 16.7 percent increase, not a 300 percent increase. The rent will not go from $300 per month to $900 per month.

It is true that a 16.7 percent increase in rent is significant, but I wonder if many will feel its force. It is almost impossible for a layman to read a congressional bill but it would appear that there are all sorts of exceptions and carve-outs included for the disabled, unemployed and other needy persons.

Why then would the governor make such an alarming claim? The basis for his claim stems from the provision in the 1937 bill that sets a minimum rent for those receiving a subsidy at $50 per month. That was over 80 years ago! The new bill replaces the old minimum with a formula based on the current federal minimum wage that would effectively raise the minimum to $150 per month.

I hope that as the “Making Affordable Housing Work Again Act” works itself through Congress some legitimate discussion and criticism of its many features will come to light. In his initial criticism Gov. Malloy seems either ignorant of the facts or just plain malicious in his anti-Trump posturing.

Francis P. DeStefano, Ph.D., of Fairfield, is a writer, lecturer, historian and retired financial planner.