Federal voucher reform bill targets the poorest of the poor for rent increases

Berkeley Housing News:

January 25, 2012


Federal voucher reform bill targets the poorest of the poor for rent increases

By Lynda Carson

A revised draft of the voucher reform bill was released by Republican staff of the House Financial Services Committee on January 13, 2012.

Residents throughout the country in public housing, or are Section 8 voucher holders, or are in privately-owned project-based Section 8 units and subsidized housing units, would fall under the new draft law being proposed, and would be negatively affected if the voucher reform bill is passed into law.

In essence, the proposed voucher reform bill would end an existing cap on the amount of rents a poor person has to pay on a monthly basis.

High Salaries & Wage Compensation Mean Higher Rents For The Poor

As the so-called 501c3 charity nonprofit affordable housing developers are grabbing more and more funds from the affordable housing programs for their extremely high salaries and wage compensation, there is less money to go around for the needs of the poor, to subsidize low-income renters.

As a direct result, on behalf of the wealthy so-called nonprofit affordable housing industry that wants to keep their high salaries in place, the federal government is about to remove a cap on how high the rents can be charged to the poorest of the poor.

There are no caps on how much money the executives can grab for their obscenely high salaries and wage compensation, in the so-called affordable housing industry.

Rather than asking the greedy so-called affordable housing developers to reduce their exorbitant salaries and wage compensation, the poor are being asked to give more of what little they have, or face eviction from the subsidized housing programs.

As an example: Project-based Section 8 tenants typically pay 30 percent of their monthly income toward rent, with rental assistance making up the difference between what the tenants can afford and the approved rent. But even tenants with very little or no income are required to pay something.

Currently, if 30 percent of a tenant’s income is less than $50, he or she can be charged a minimum rent of up to $50 a month.

Under the draft of the new law, the cap on the minimum rent would be lifted. The new minimum rent would be set at least $69.45, and would be annually indexed to inflation.

No limits to rent increases if cap is removed: “The current HUD secretary, or the next one could go beyond,” said NLIHC's Linda Couch. With the cap removed, “there is no limit.”

Any and all tenants that can not pay the extra rent increases being demanded of them face eviction.

Meanwhile the greedy executives in the so-called affordable housing industry are allowed to continue grabbing more funds for their excessive salaries and wage compensation.

All tenants in so-called affordable housing units (projects) are urged to unite and protest, and are urged to demand in writing that the executives and employees in the organizations that owns and manages the buildings they reside in MUST roll back their salaries and wage compensation to less than $80,000 per year!

Who may possibly be affected by the proposed rent increases?

See more below for details and links to affordable housing lists in Berkeley...

For new draft law proposals soon to be voted on see the section below for CONGRESS: "New Draft Voucher Bill Released"

Lynda Carson may be reached at tenantsrule [at] yahoo.com


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(Section 8 Project-Based, Section 202)
Subsidized housing for seniors in Berkeley

http://www.ci.berkeley.ca.us/ContentDisplay.aspx?id=16354

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Subsidized Housing Berkeley

http://www.ci.berkeley.ca.us/ContentDisplay.aspx?id=16352

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Berkeley: project-based voucher program

http://www.ci.berkeley.ca.us/ContentDisplay.aspx?id=34568

Assisted families are offered quality rental units in buildings pre-approved by the Housing Authority for “project-based” assistance. Some units are restricted to persons 62 years or older; or disabled individuals; or individuals with AIDS or HIV. The waitlist is currently closed.

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(From: NLIHC)
A formatted .pdf version of this week’s Memo to Members is available at: http://nlihc.org/doc/Memo17-3.pdf


CONGRESS

***New Draft Voucher Bill Released

A revised draft of the voucher reform bill was released by Republican staff of the House Financial Services Committee on January 13. The new draft bill, now called the Affordable Housing and Self-Sufficiency Improvement Act (AHSSIA), could be taken up by the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity in early February. The draft bill makes a number of changes to the previous draft, which was released in October (see Memo, 10/7/11).

The new draft bill incorporates Representative Gary Miller’s (R-CA) draft Moving to Work (MTW) Improvement, Expansion, and Permanency Act, which was also circulated in October. This legislation would allow the HUD Secretary to provide the broad flexibilities of the MTW demonstration to an unlimited number of public housing agencies and make MTW permanent. NLIHC has long opposed MTW expansion because the existing program has not been evaluated, does not require deep income targeting, does not require that rents be affordable under the Brooke standard to each household, and allows for the blending of public housing and voucher funds such that fewer households are or will be served. NLIHC is hopeful that an agreement on Moving to Work can be reached, so that the bill can be supported by a broader range of housing advocates.

The new bill makes some significant changes to the previous version’s minimum rent increase provisions, which NLIHC opposes. The new draft bill would direct the HUD Secretary to set monthly minimum rents for public housing residents, voucher holders and project-based Section 8 tenants of not less than $69.45 and then would allow the Secretary to index this minimum rent floor to inflation.

There is no upper limit to a minimum rent the Secretary could set. The draft language would allow PHAs to determine the actual minimum rent, presumably above the Secretary’s minimum rent. Project-based owners would also be able to set minimum rents above whatever minimum rent is set by the Secretary, with the Secretary’s approval. The previous draft authorized PHAs to set minimum rents to the greater of $75 or 12% of Fair Market Rent. This bill removes these provisions, replacing them with a floor minimum rent of $69.45 that could be increased by the PHA or private owner. NLIHC is trying to determine if the draft bill text is indeed what Subcommittee Chair Judy Biggert (R-IL) intends or if there were errors in the drafting process. As presented, NLIHC would oppose the new draft’s language on minimum rents.

The new bill does include important project-based voucher provisions sought by NLIHC and many other advocates. These include the ability to base the percentage of vouchers that could be project-based (20%) on the number of a PHA’s authorized vouchers rather than on a PHA’s authorized voucher funding. The draft bill would also allow for an additional 5% of an agency’s vouchers to be project-based to provide units that house individuals and families that are homeless, who are veterans, that provide supportive housing to persons with disabilities, or that are located in areas where vouchers are difficult to use. The bill would also allow for enhanced vouchers to be converted to project-based vouchers for the purposes of preserving affordable housing.

Another new section in the draft bill would allow for full fungibility between the public housing capital and operating funds.

The new draft bill includes two other demonstrations intended to test PHA policies that promote economic independence. One is called a rent reform demonstration and the other is called a “research demonstration to evaluate options for taking economic security initiatives to scale in subsidized housing.” Both demonstrations would give an unspecified number of PHAs the ability to waive the Brooke standard that tenants pay no more than 30% of their income for rent in order to evaluate different policies’ effects on resident income, employment, and other measures. The latter would allow imposition of work requirements or “other clusters of interventions.” These demonstrations seem to duplicate what many existing MTW PHAs already say they are testing and thus, may be an unnecessary expansion of PHAs’ latitude to not to insure that each household has a rent that is affordable.

Unlike the October version of the bill, the latest does not require PHAs to operate some compendium of supportive services in order to take advantage of the bill’s income and rent determination simplifications. The new bill would make a number of improvements to the Family Self Sufficiency (FSS) program, including merging the public housing and voucher FSS programs and expanding the reach of the FSS program to project-based Section 8 households.

The draft bill is available at: http://nlihc.org/doc/AHA_Draft_Bill_2012.pdf

A one-page summary provided by the Subcommittee staff is available at: http://nlihc.org/doc/AHA_Summary_2012.pdf

A section-by-section summary provided by the Subcommittee staff is available at: http://nlihc.org/doc/AHA_sbs_2012.pdf


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(See Story Below About Proposed Rent Increases In Subsidized Housing)

24, Jan. 2012

Higher Rents for Poorest Tenants?

By Mary Otto

Editor in Chief

Rents could be raised for some of the nation’s poorest tenants under a provision of a bill now working its way through Congress.

A draft version of a bill entitled the Affordable Housing and Self-Sufficiency Improvement Act, released on Jan. 13 would remove a cap in place since 1998, allowing the housing secretary and public housing landlords to boost rents in housing projects and project-based Section 8 apartments.

As Street Sense was going to press on the evening of Jan. 17, housing advocates were expected to convene a meeting at the Southeast Branch Public Library to discuss the possible impact of the bill with public housing tenants.

“I’m going to say to the tenants to go try and meet with the Subcommittee Chairwoman, Congresswoman Biggert, and tell her that there are families who cannot afford an increase in minimum rent, whose housing stability will be threatened by a minimum rent policy that has no cap,” said National Low Income Housing Coalition vice president Linda Couch, a scheduled speaker at the event, organized by the District of Columbia Grassroots Empowerment Project.

A spokesperson for Congresswoman Judy Biggert, an Illinois Republican, who chairs the House Subcommittee on Insurance, Housing and Community Opportunity, did not return calls for comment.

But Laquita Eddie, a resident and community board president at Faircliff Plaza West, a federally-subsidized project-based Section 8 apartment complex in Columbia Heights, predicted that a rent increase would further stretch poor tenants who are already at the breaking point.

“No good can come out of this,” said Eddie. She works at a grocery store and pays more than the minimum rent at her complex. Yet with two sons to support, the challenge to make ends meet is constant.

“I’m still struggling, buying food and keeping my lights on,” she said.

And many of her neighbors are surviving on less. If the rent of the poorest among them is increased, they could face desperate choices, Eddie said. “You are talking about a mom trying to feed her kids. “

In the District, approximately 20,000 residents live in public housing, according to DC Housing Authority data, but not all of them would be affected by the bill. While the D.C. Housing Authority has the freedom to set its own minimum rents under the federal “Moving to Work” program, residents of the city’s privately-owned project-based Section 8 units would fall under the draft law. As of Nov, 2011, the District had active contracts for 10,457 units of Project-Based Section 8 housing, according to data contained on the website of the U.S. Department of Housing and Urban Development, or HUD.

Project-based Section 8 tenants typically pay 30 percent of their monthly income toward rent, with rental assistance making up the difference between what the tenants can afford and the approved rent. But even tenants with very little or no income are required to pay something.

Currently, if 30 percent of a tenant’s income is less than $50, he or she can be charged a a minimum rent of up to $50 a month. Under the draft of the new law, the cap on the minimum rent would be lifted. The new minimum rent would be set at at least $69.45, and would be annually indexed to inflation. .

“The current HUD secretary, or the next one could go beyond,” said Couch. With the cap removed, “there is no limit.”

A HUD spokeswoman said she could not comment on the pending legislation. The bill, which may be scheduled for markup in coming weeks, is part of larger ongoing reform efforts that have targeted rental assistance programs run by HUD. Housing officials and lawmakers say the reforms are intended to preserve and expand affordable housing opportunities.

The nation’s public housing system, which currently serves more than 4 million elderly, disabled, homeless, poor and working individuals and families and subsidizes over one million Project-Based Section 8 apartments, is facing an historic level of need, according to Assistant HUD Secretary Sandra B. Henriquez, who testified in June before Biggert’s Insurance, Housing and Community Opportunity subcommittee.

Henriquez said HUD’s 2011 “Worst Case Housing Needs” Study showed a 20 percent increase in renters paying more than half their income in rent, living in severely inadequate conditions, or both, between 2007 and 2009.

“The demand on our rental programs has been steadily increasing as incomes have dropped and homes have been lost to foreclosure,” she told the lawmakers.

At Faircliff Plaza West, Santiago DeAngulo has seen that demand first hand.

“We have a waiting list of over 400 here,” said DeAngulo, a district manager for Eagle Point Management, which oversees the operation of the 112-unit complex. Once run-down and crime-ridden, the apartments underwent an $18 million renovation back in 2005. Under project-based rental assistance, HUD’s subsidy is committed for a contractually-determined period.

As part of Faircliff Plaza West’s upgrade project, financed with the help of tax-exempt bonds and low-income housing credits, the development’s Section 8 contract was renewed for 20 years to help ensure the rents would remain affordable.

But not all such contracts are renewed. In the face of rising property values and development pressure, housing officials and advocates across the country face a constant battle to preserve affordable housing. Tenants at Faircliff Plaza West are lucky to have their apartments, even if their rent goes up, said DeAngulo.
“Most of the families who are in the shelters, they would love to be here even if they were paying 50 percent of their income for rent.”


Linda Leaks
EmpowerDC
(202)234-9119
fax (202)234-6655