Homelessness: The Low Income Housing Scandal

Poverty in America

Frontline (2017)

Film Review

Poverty in America is about the massive corruption scandal behind homelessness and the dearth of affordable housing for low income Americans.

Despite the nearly ten years that have passed since the 2008 economic crisis, 2.5 million Americans are made homeless through home eviction every year. The limited stock of affordable housing has no way of absorbing this many new renters. This, in turn, drives up rents at a time when real wages are decreasing. In many cities, families are forced to pay over 50% of their income in rent – a precarious situation leaving them one family emergency away from the streets.

This documentary focuses on two grossly inadequate federal programs dedicated to increasing access to affordable housing. The first is the Section 8 voucher program enacted in 1968. Under this program, the Department of Housing and Urban Development (HUD) awards vouchers to low income renters that pay the different between the rent a landlord charges and the rent a tenant can afford based on income.

There are currently 2 million Americans on the waiting list for Section 8 vouchers and only 25 percent will ever receive vouchers. The filmmakers follow three women who have waited six years or longer to qualify for Section 8 vouchers. None of them can find a landlord willing to accept their voucher within the 90 day limit they are given.

The second federal program Frontline explores is one in which the IRS allocates tax credits to states to grant to developers – who, in turn, sell the credits to investors. An entire tax credit industry has grown up around this scheme. Owing to inadequate IRS monitoring (only seven companies have been audited in 29 years), the scheme has been plagued by bribery and kickback scandals.

In Florida, for example, developers routinely cheat the program by over inflating the cost of development projects and either pocketing the difference of siphoning it off to shell companies (including one in Costa Rico specifically created for this purpose).

Despite heroic efforts of a handful of Department of Justice attorneys and Senator (R) Charles Grassley from Iowa, there seems to be little interest on the part of federal or state authorities to end this corruption. The IRS and HUD declined to be interviewed for this program.

HUD Ends Blanket Ban on Renting to Ex-Felons

ban the box

At the beginning of June, Obama’s Department of Housing and Urban Development (HUD) ruled that landlords who exclude ex-convicts as renters may be breaking the law under the Fair Housing Act.*

The new rule reads, “A housing provider violates the Fair Housing Act when the provider’s policy or practice has an unjustified discriminatory effect, even when the provider had no intent to discriminate.”

In essence it prohibits a blanket ban against tenants with criminal records. It still permits a case-by-case assessment of whether tenants could pose a threat. In other words, the new guidelines allow a landlord from excluding an ex-convict if that person represents a threat to the safety and security of the other residents in the building.

The new rule also cautions landlords against selectively enforcing a ban on applicants with criminal records: denying housing to black ex-felons while accepting white people with criminal histories.

Supreme Court Ruling on Disparate Impact

The new guidelines follow a 5-4 Supreme Court ruling last June that the 1968 Fair Housing Act applies to disparate impact as well as “discriminatory intent”. The ruling in Texas Department of Housing and Community Affairs v Inclusive Communities Project prohibits any housing policy that results in poorer outcomes for protected groups, such as black Americans, regardless of whether they were intentionally discriminatory.

The HUD requirement remains that local public housing authorities ban (for life) anyone convicted of producing methamphetamines on public housing property, as well as registered sex offenders. HUD guidelines also require public housing authorities evict public housing residents if they or someone in their unit – even an unrelated guest – commits a drug crime.

The Felon Next Door

On April 4, the British Guardian ran an excellent and (in my opinion) balanced article about the cruel bans on housing and employment for formerly incarcerated African American and Hispanic men who have been preyed upon by a brutally racist criminal justice system.** Because of systemic housing discrimination – even by public housing facilities – many of these individuals have been doomed to homelessness on their release.

Contrast that with a blatantly racist article in Investors Business Daily about the Obama administration making it easier “for felons to move in next door.”  IBD accuses the Obama administration of trying to “racially balance” the US ZIP code by ZIP code. The outcome they claim will be to import violent crime into the suburbs, while lowering property values and negatively impacting local schools.


*The Fair Housing Act was passed in 1968 and signed into law by President Lyndon B Johnson. It prohibits discrimination in housing on the grounds of race, color, religion, sex or national origin. Criminal history is not a protected status under the law, but HUD’s new guidelines rely on the concept of “disparate impact”, noting that black and Latino people are disproportionately incarcerated and therefore more likely to excluded by blanket policies.

**In The New Jim Crow, African American attorney Michelle Alexander gives a heart breaking account of police bounty systems that deliberately target minority neighborhoods looking for pot smokers and innocent black arrestees forced to cop felony pleas because they can’t afford decent legal representation.