A Look at the Cuts in Government Housing Subsidies

by Adam Ritscher

According to the U.S. Census Bureau almost 40 million Americans live below the poverty line. And as hundreds of thousands of workers get laid off from closing plants, downsizing and outsourcing, that number is likely to climb.

But despite the massive levels of poverty that pervade this country, the powers that be have decided that now is the time to cut federal housing subsidies that millions of low income people depend upon to pay their rent each month.

This past April, the federal government, announced that it would be retroactively changing the way it funds housing vouchers. As a result of this major change, many local housing authorities are finding themselves dangerously short of funds. Nationally, the shortfall is estimated at $1.6 billion, according to the National Low Income Housing Coalition.

To give you an idea of the impact that this is having on the local level, lets take a look at one city – Duluth, MN.

Following the reduction of federal housing assistance this spring the Duluth Housing and Redevelopment Authority Board of Commissioners voted unanimously to cut back subsidy payments to low-income renters almost 8%. That 8% cut equals a loss of almost $50 a month per person. For workers and unemployed people forced to live below the poverty line, $50 is often the difference between staying afloat and going under.

To give a personal side to the story, Duluth’s daily newspaper, the News-Tribune, recently ran a front-page article on the story with a picture of a young single mother who was struggling to now make ends meet. The young woman, Jennifer Roy, and her daughter Ashia, were quoted talking about trying to earn enough money to cover rising rent while also taking care of her daughter, and the hardship of having to move all of the time.

Most daily papers in the country failed to give this issue the front page coverage it deserves, and the few that did ended up spinning the story to make it seem like an unfortunate, but unpreventable problem.

For example, while the News-Tribune predicted that these cuts in housing assistance were going increase the number of homeless people, as well as exasperate other social problems that go hand in hand with poverty – like domestic violence, prostitution and alcoholism, it failed really analyze the problem. Readers walked away feeling that low income people were unfortunate victims of fate that deserved our sympathy and charity, and that there was little or nothing the government could do given the trying economic times we live in.

But lets look at the side of this issue that the News-Tribune didn’t. In fact, lets take a second look at the young woman featured on the front page of that newspaper. Jennifer Roy is a single mother trying to make it in the part-time job/service economy that so many young people find themselves trapped in today. When this writer first met Jennifer, two years ago, it was as a housekeeper at the Inn on Lake Superior.

The owners of the Inn, the Goldfine family, are among Duluth’s richest. Despite this, or rather because of it, they received hundreds of thousands of dollars from the city of Duluth to finance the building of this high priced hotel, which located in one of the most prime pieces of real estate in the region. And for several years afterwards the Goldfine family also enjoyed the privilege of getting 2/3rds of their property taxes that they paid for the Inn given back to them. All this was done ostensibly to provide jobs.

But the job that Jennifer Roy found there - $5.75/hour, less than 30 hours a week, and no real benefits that she could realistically qualify for – still left her living trapped below the poverty line.

In other words, the city of Duluth literally handed hundreds of thousands of dollars of funds and tax rebates to one of Duluth’s richest families to build a luxury hotel in a can’t fail location so that they could create a few dozen below poverty line jobs. The price tag of this single example of corporate welfare is more than the entire shortfall of housing assistance that the entire city is facing as a result of the federal cuts.

Contrary to how it is often portrayed, poverty is not an inevitable social problem, and the recent cuts in social spending are not the inevitable result of an uncontrollable sour economy. Homelessness, under-funded social programs, housing shortages, run-away rents and poverty in general are the result of conscious choices, choices by the business and government elites of this country.

We live in a country of incredibly ample resources. Literally trillions of dollars in profits are generated by our economy each year. It isn’t that there isn’t enough money to fund social programs and genuinely tackle poverty, it’s that the money that should be used for these things are instead siphoned off for the rich. Be it tax cuts for the wealthy, corporate welfare – the example mentioned above, or the over $100 billion being spent by the government to control the flow of Middle East oil; these are all choices being made that benefit the rich at the expense of the poor. Poverty is direct consequence of these policies, and if we are really going to end poverty we’re going to need to take on the monied elites in whose interests we are all suffering.

As Joe Hill so succinctly said more than a century ago, “Don’t mourn, Organize!” Don’t bemoan poverty as a sad an unfortunate fact of life, get together, organize and fight back! By rebuilding a fighting labor movement, linking up with other social justice movements, and rallying around a workers’ social agenda in which the rich are made to pay instead of the poor, we can and will end the scourge of poverty!