Tenants living in USDA Rural Development (RD) financed Sections 514, 515, and 516 would have to pay a minimum rent under the new budget provisions. According to RD, this will help tenants be more financially responsible and move onto the “path to homeownership.”
However, points out Gideon Anders: “This change will impact the most destitute tenants who have the least capacity to pay minimum rent. They are vulnerable households who temporarily or permanently do not receive Social Security, Disability, or other assistance and have no regular full time employment. They are simply unable to pay minimum rent.”
“Elderly and disabled persons with less than $2,000 in annual income are more likely to become homeless from the imposition of minimum rents than to become successful homeowners,” Anders argues.
RD says that these tenants will be able to claim hardship exemptions. Yet in similar HUD programs, an extremely small percentage of households were able to use such exemptions.
“RD estimates that if fully implemented, the imposition of minimum rents will ultimately generate $20 million in revenue,” Anders continues. “Given the fact that the Rental Assistance program alone costs the federal government over $1.1 billion, the savings is paltry.”