Section 8 Housing Voucher Programs In Crisis

Section 8 Housing Voucher Programs In Crisis

Public Housing Agency's Forced To Terminate Section 8 Contracts

By Lynda Carson May 18, 2004

Oakland CA--The Bush Administration has recently shattered America's 30 year commitment to assist low-income families in keeping a roof over their heads through the HUD funded Section 8 housing voucher programs that assist the disabled, elderly and the poor.

Public Housing Agencies (PHAs) across the nation have been informed that reimbursements from HUD for fiscal year 2004 would not be based on actual current voucher costs, and instead the payments would be based on the cost of vouchers under lease on August 1, 2003, adjusted for inflation.

The announcement sent shockwaves throughout the country when the PHAs discovered that the regulatory changes created huge budget shortfalls for fiscal year 2004, because they would only receive funding at the fiscal year 2003 level.

These disastrous changes went into effect when President Bush signed the current budget into law in January, 2004. On April 22, HUD issued the guidelines spelling out details of the new budget and, public housing agencies across the nation have quickly fallen into a crisis due to the funding shortfalls.

THE CRISIS SPREADS

The crisis has already spread from coast to coast. New York City faces a $55 million shortfall to fully fund 118,000 housing vouchers that are already in use for fiscal year 2004.

A housing agency in Warrenton, Oregon, had to cut off funding for 110 families during the first week of May, 2004. The agency is presently short of $59,000 or more, and another 50 families could be cut from the voucher programs by June 1.

The PHA of Alameda, California, sent out letters on May 14, to 1,659 families and over 600 landlords to inform them that the new regulations created a $3 million shortfall and that there may not be any rent money for the month of June. Tenants and landlords are being advised to use the security deposits to pay the rent and to negotiate a way for the renters to repay back the spent security deposits.

Massachusetts housing officials are set to mail termination notices to about 650 tenants due to a shortage of $550,000, and are working with state and federal officials to come up with a solution to avoid the termination of many housing vouchers in their state.

Minnesota has a voucher crisis and 2,000 families may lose their assistance by June. According to John Gutzmann, an executive of the St. Paul, PHA, his agency alone faces a $30,000 shortfall or more.

The PHA of Fargo, North Dakota, has indicated that they may have to terminate the housing vouchers for 46 out of 1,100 families from their existing housing voucher programs.

Under the current Bush administration's budget proposals, estimates already have been calculated by the Center on Budget and Policy Priorties for fiscal years 2005 through 2009, and it appears that the current disaster taking place is only the tip of an iceberg.

The proposed reductions in voucher subsidies for fiscal year 2005 may result in a huge source of homelessness locally and across the nation for years ahead if the Bush administration's proposals are not reversed.

On a local level, during fiscal year 2005, it's estimated that reductions to Berkeley's housing voucher programs may result in the elimination of 223 families out of 1,841 families unless the city imposes an annual rent increase of $1,545 spread across the board to each of the families using the existing housing vouchers.

Oakland faces a reduction of $17,380,757 for fiscal year 2005 under the current budget proposals, and may be forced to eliminate 1,303 families out of 10,754 families from their voucher programs or raise the rents annually for all by as much as $1,582 per family.

For fiscal year 2005, San Francisco faces a reduction by as much as $15,257,319, and may have to eliminate 876 families out of 7,229 families from it's voucher programs or raise the rents on all families by as much as $2,066 annually.

Outrage Across The Nation

From across the nation, Congressional Democrats claim that thousands of families could be either forced to pay more money out of their own pockets or lose their housing, and according to House Minority Leader, Nancy Pelosi, she says, "The Bush administration is breaking a 30-year promise to help low-income families, the elderly and the disabled to afford decent, safe housing."

Democrats, Housing activists, and advocacy groups argue that HUD is misinterpreting the budget and that voucher costs should be updated every three months so that the cost-of-living increases may be assesed on a continual basis.

In a statement released by the National Leased Housing Association, it reads, "NLHA has voiced its opposition to HUD’s interpretation of the FY04 formula and along with other industry groups is pressing Congress to affirm its intention that all vouchers in use (and authorized) be funded at their current cost."

In a differnet statement released by the Consortium for Citizens with Disabilities, it reads, "The Bush Administration’s FY 2005 HUD Budget proposal calls for deep cuts in the Section 8 Housing Choice Voucher Program. The budget also would radically alter the fundamental design of the program by converting it to a block grant administered by Public Housing Agencies (PHAs) for the benefit of higher income households. The Consortium for Citizens with Disabilities Housing Task Force (CCD Housing Task Force) is strongly opposed to the Administrations budget proposal which would cut more than $1 billion from current funding levels.  We are also strongly opposed to the Administration’s ill-conceived proposal to convert the program to the Flexible Voucher Program – a block-grant type approach which would eliminate many of the critical protections people with disabilities have under the current Section 8 program." 

In response to the Bush administration's budget cuts, Representative Barney Frank (D-MA) has introduced H.R. 4263 in an effort to resolve the situation, and he already has 85 cosponsors or more supporting the bill. The intention of the bill is to amend the FY04 VA-HUD Appropriations Act, in order to fully fund the Section 8 vouchers as based upon the agency's per unit cost, as originally intended by congress.

Housing activists are calling on as many people as possible to call their member of congress at the Capital Switchboard (toll free number) to insist that the cuts to the housing vouchers are totally unacceptable.

Dial 1-888-818-6641 to reach your Congressional Representative.

Housing activists request that you;
1) Insist that HUD must withdraw the Aprill 22 notice changing the way housing vouchers are funded, because the change is leading to funding cuts across the country.
2) Insist that HUD must fully fund all housing vouchers in 2004, as Congress intended.
3) Insist that vouchers are based on their actual cost according to the latest available data.