By Ralph B McLaughlin, Chief Economist | Trulia
President Trump recently announced a new budget proposal and, as with any new budget, there are winners and losers. A proposed $6 billion cut - or 13 percent of the department’s overall budget - puts the Department of Housing and Urban Development (HUD) into the latter. While these cuts will impact several of HUD’s programs, there are two standouts: the elimination of the Community Development Block Program (CDBG), and the $3 billion - or 8 percent - cut to the rental assistance program. While it is difficult to know who directly benefits from CDBG funding, since they are used to fund a variety of projects from housing and infrastructure to economic development and property acquisition, there is a wealth of data from the U.S. Census Current Population Survey (CPS) on where and who benefits from rental assistance programs. We find that young, urban and African-American households would disproportionately feel the hit from a reduction in rental assistance funding.
Using data from the 2016 CPS Annual Social and Economic Supplement, we found that people under the age of 35 make up nearly 60 percent of rental assistance recipients of even though they are just 48 percent of the U.S. population. When looking at race, about 49 percent of recipients are white while 41percent are African-American. Though nearly half of recipients are white, they make up about 75 percent of the U.S. population, which means they are underrepresented as voucher holders. On the other hand, African-Americans make up just 13 percent of the U.S. population, so they are vastly overrepresented as a share of those receiving federal rental assistance. This overrepresentation of African-Americans likely mirror broader socioeconomic disparities between whites and blacks, such as income, homeownership, and education.
Another interesting story emerges when we look at the geographic distribution of where recipients live. Central city residents – what the CPS-ASEC calls people who live in urban city centers – are overrepresented compared to their U.S. population. Of those receiving rental assistance, about 44 percent live in central cities, but they only make up about 28 percent of the population. On the other hand, suburbanites are underrepresented. About 31 percent of recipients live in the suburbs but make up about 45 percent of the U.S. population. Finally, rural residents are about proportionally represented, making up 14 percent and 13 percent of recipients and proportion of the U.S. population, respectively.