HUD's $300 Million Disaster

HUD's $300 Million Disaster
By Lynda Carson October 19, 2004

Housing and Urban Development (HUD) is again under fire lately for it's under-handed schemes to dismantle the Section 8 program by underfunding housing agencies across the nation.

Since HUD's Secretary Alphonso Jackson took the helm during March of 2004, one intentional disaster after another has undermined the Section 8 program that serves nearly 2 million people across the nation.

A recent survey published on October 11 revealed that the nations housing agencies are short $93 million to fully fund the Section 8 program, and that 52,000 families may be forced to pay higher rents as a result, according to housing officials. In part, 27% of the nations housing agencies had to raise the rents by as much as 9% on their Section 8 tenants as a means to cover the latest funding shortfalls.

In addition, the National Association of Housing and Redevelopment Officials (NAHRO) have assailed HUD for diverting over $300 million from the Section 8 program in a complicated guideline scheme. NAHRO conducted the recent survey and analysis that is titled, "NAHRO Analysis: Effects of FY 2004 Budget-Based Renewal Funding Policy for Section 8 Housing Choice Voucher Program."

In essence, the results of the survey reveals that HUD is intentionally overfunding some of the nations housing agencies by as much as $300 million, and that the overfunding is being returned back to the Treasury Department.

At the same time, HUD has been intentionally underfunding other housing agencies across the nation, and the surpluses from the overfunded agencies are being kept from servicing the underfunded agencies.

The insanity of the scheme results in a strange process where Congress fully funds the Section 8 program, but HUD has found a way to funnel hundreds of millions of dollars directly back into the Treasury Department where it ends up being diverted elsewhere and disappears.

According to NAHRO's executive director, Saul Ramirez, "The biggest concern is that there is a precipitous drop in the ability to serve low-income households around the country."

The funding dispute heated up on October 12, when David Givens, the HUD budget director fired back by saying, "It's a flat out misleading lie," about the $300 million being diverted from the Section 8 program. Givens did not offer any documentation to counter NAHRO's figures and analysis, but stated that HUD is required to return surpluses back to the Treasury Department.

Based on NAHRO's analysis of data provided by the government, the study concludes that in 2004, nearly 500 housing agencies are being underfunded by as much as $93 million, while at the same time theres more than 900 housing agencies that must return a surplus of $300 million in unused funding.

One can only wonder why HUD officials would be crazy enough to set up such an inefficient system that appears to defy the will of Congress, and short changes the poor.

This bogus system resulted in 38% of the nations housing agencies being overfunded, while 62% of the nations housing agencies are being underfunded, which created the $93 million funding gap affecting 52,000 families.

NAHRO's survey determined that the nations housing agencies had produced negative reactions to counter the funding shortfalls being created by HUD's mismanagement of the section 8 program.

Apparently in 2004, some10% of the nations housing agencies recalled vouchers from families that were promised to them, while 4% of agencies terminated existing vouchers already in use, and some 27% of agencies jacked up the rents by as much as 9% on their Section 8 renters. At least 27% of the nations housing agencies had to resort to renting to higher income renters in their public housing units to compensate for the funding shortfalls, and low-income renters are being over looked as a result.

Low-income families across the nation are feeling the squeeze, and Section 8 renters have been in a state of panic ever since late April 2004, when HUD Secretary Alphonso Jackson first started to sabotage the program with his insane policies that wage another war upon the poor.

Some of the headlines from across the nation are a telling tale of what has transpired since HUD's Secretary Jackson took liberties with the Section 8 Program starting back in April 2004.

SOME HEADLINERS FROM ACROSS THE NATION SINCE APRIL 2004

On 5/14/04 the Dallas News reported that; Rental vouchers being cut- 500 households will lose aid, DHA says; federal budget blamed: In Houston, housing agency officials have said the housing authority would have to cut off aid to 724 households.

On 5/16/04 the Cleveland Plain Dealer reported that; HUD chief defends move to cut costs: HUD Secretary Alphonso Jackson defended HUD's interpretation of the FY 04 voucher funding rule.

On 5/16/04 the Alameda Times-Star reported that; Island Section 8 vouchers threatened; HUD may recall rent aid for poor in Alameda due to $3 million budget shortfall:

On 5/24/04 the Omaha World-Herald reported that; HUD's FY 04 voucher funding decisions are forcing Nebraska PHAs to reduce assistance:

On 5/27/04 the Deseret Morning News reported that; Voucher recipients in Salt Lake City protested the voucher funding cuts, which could eliminate funding for 250 families, according to the Salt Lake City Housing Authority.

On 5/27/04 the Syracuse Post Standard/Herald-Journal reported that; 160 families could lose their vouchers as a result of the FY 04 voucher funding cut, according to the Syracuse Housing Authority.

On 5/28/04, the News Tribune of Tacoma Washington reported that; There are going to be 400 families without homes due to Section 8 cuts.

On 6/5/04 the Contra Costa Times reported that;
* The Long Beach Housing Authority's board of commissioners plan to cancel all 6,172 Section 8 contracts effective 8/1/04 and issue new contracts with a lower subsidy.
* The Alameda Housing Authority will cancel the contracts of about 100 families, effective 7/1/04.
* The San Diego County Housing Authority plans to notify about 4,300 of the 10,400 households in the Section 8 program to cancel their contracts.

On 6/10/04 The Saratogian reported that; As many as 99 Saratoga County families could lose their federal housing vouchers.

On 7/9/04, The Dallas Morning news reported that; Dallas could lose 177 Section 8 vouchers through attrition after HUD rule change.

On 7/15/04, The Springfield Republican reports that; In 2005, some 8,600 people stand to lose their vouchers in Massachusetts.

On 7/15/04 the Contra Costa Times reported that; The city of Alameda, which operates its own authority, has to cut 240 of its 1,670 families from Section 8 program.

On 8/3/04 The Billings Montana Gazette reported that; Not only are Montana families at risk, but up to 400 landlords will be left with rentals where the tenants can no longer afford to pay the rent.

On 8/4/04 the Chicago Tribune reported that; "Elgin notified 32 people that their rental assistance would end July 31.

On 8/6/04 The North Adams Transcript reported that; The PHA in North Adams, MA, has cut 26 families from its program as of September as a result of HUD's FY 04 voucher funding rule.

On 8/13/04 the Belleville News-Democrat reported that; Madison County, Illinois is terminating 19 vouchers as of Sept 1.

On 8/17/04 The Davis Enterprise reported that; The Yolo County Housing Authority is considering cutting 150 to 200 existing voucher recipients to cover the shortfall in FY 04 funding.

On 8/23/04 The Daily Democrat of Woodland, reported that; The Yolo County Housing Authority cut 199 families from its voucher program.

On 8/24/04 The Ames Tribune reported that; The Ames, IA, Housing Authority must cut vouchers to 13 families due to FY 04 voucher funding changes.

On 8/25/04 The Sidney Herald reported that; Voucher funding cut threatens 500 to 800 families in Montana with loss of vouchers.

THE FUTURE OF SECTION 8

At this point in time, Section 8 renters feel like sitting ducks just waiting for the next attack to come their way from the thugs at HUD.

Around the nation, the attacks on the Section 8 program have also been devastating to the developers who depend on Section 8 money to build or maintain affordable housing.

The recent HUD created disaster in Marin County that is presently undermining the financial stability of more than a dozen nonprofit housing organizations that are serving the mentally ill, disabled, elderly, homeless and battered women that are most in need, is a conclusive example of HUD's new management at work.

The attacks by HUD on the Section 8 program are nothing short of a misguided attempt to steal as much money as possible from the poor while HUD continues with it's attempts to convince a distrusting public that the $300 million diversion is only a myth that needs to be debunked.