Homeless Youth Forced to Choose between Home and School

Across the political spectrum, most Americans believe that young people should have the chance to complete their education if they are willing to study hard. But one well-meaning federal housing policy is forcing formerly homeless youth to choose between an education and keeping a roof over their heads.

Currently, the Low Income Housing Tax Credit (LIHTC), created in 1986, is responsible for at least half of the rental housing developments produced in the country and in Minnesota. In some cases, LIHTC has been used to create housing for homeless youth. However, one of the regulations for the program is the “Student Rule,” which stipulates that full time students cannot live in an LIHTC low-income unit as head of the household.  The rule was originally adopted to prohibit LIHTC resources from being used to build college dormitories, but the unintended consequences for formerly homeless youth have been severe.

As it stands, the rule requires students living in LIHTC-financed housing to certify that they are not attending school full time. In many instances, the youth are full time students when they are offered this housing, and thus must choose between cutting back on school and losing their housing assistance. To make matters worse, many students who choose housing lose their financial aid as a result of the change in student status.

Data collected in 2011 from two properties for homeless youth in Minneapolis run by the nonprofit developer Aeon demonstrate the strain this rule can put on the youth. Of the 27 students in these properties, 23 had to switch to part time student status to maintain their housing. In the last year, 10 students became ineligible for housing due to their school status. 

The Student Rule affects not just college students. In 2007 the Internal Revenue Service clarified its interpretation of the legislation, stating that the Student Rule included elementary through high school students in defining those ineligible to live in LIHTC properties. Back in 2008, 20 percent of the youths living in two properties operated by Aeon had to stop attending high school full time in order to maintain their housing.

Minnesota legislators have been in the forefront of changing the Student Rule for homeless youth. For the past three years Rep. Keith Ellison has been promoting a bill that would enable formerly homeless students to live in tax credit financed housing. In 2011 Rep. Erik Paulsen became a co-author of this legislation while Senators Franken and Klobuchar have supported the Senate companion bill.

MHP continues to work with these Minnesota legislators and local and national partners on modifying the Student Rule to make sure that homeless youth can have a home and able to study full time too. Contact michael.freedman@mhponline.org for more information about our latest legislative efforts and to get involved.