Barney Frank: “The major reason the HUD funding has gone up, the single biggest one, has been in the section 8 rental program. There is…”

“The major reason the HUD funding has gone up, the single biggest one, has been in the section 8 rental program. There is a problem with section 8. Section 8 adds equity. But the current section 8 program provides rental assistance for one year at a time. No one can build affordable housing based on an annual grant. So what section 8 does, while it does provide some equity and I have been supportive of it, it increases the demand for housing without increasing the supply. So in the current formation of Federal policies, the Federal Government puts upward pressure on rentals in the moderate- and low- income areas, because we give people billions of dollars to rent apartments in a way that does not lead to any construction. This tries to make it a more balanced program. This and the GSE bill take money to begin the process of constructing affordable housing, which in the end could save us money, because it will then say that the rental levels which section 8 is driving up will no longer be driven up.”