Housing Vouchers Decrease In Value

Housing Vouchers Decrease In Value
Section 8 Meltdown Continues

By Lynda Carson October 23, 2004

Sheer panic set in when 5,200 families in Phoenix, Az, received notice during September 2004, that they may have to move into cheaper housing because their housing vouchers have decreased in value. In Phoenix, Section 8 vouchers for two-bedroom units were lowered in value from $835 per month, to $776 per month. Vouchers for one-bedroom units have dropped in value $47 per month, and the stark reality is that thousands may be forced out of their housing as a result.

HUD has double-crossed hundreds of thousands of renters by urging housing agencies to let greedy landlords grab as much as possible from the Section 8 program. Now, HUD is leaving the renters high and dry with rental contracts that they can no longer afford.

In cities with rent control, such as Oakland, housing agencies that wanted to promote the Section 8 program corrupted the process by urging City officials to exempt the Section 8 program from rent control and it left the Section 8 program wide open to abuse by slumlords that gouged the program with impunity.

On October 1, 2004, the new Fair Market Rents (FMR's) went into effect across the nation, and many housing agencies are now in shock because HUD is no longer willing to pay the high rents being charged by greedy landlords.

Housing officials around the nation are astounded by Housing and Urban Developments (HUD's) latest round of figures for the Fair Market Rents (FMR's). HUD has decreased the value of Section 8 vouchers in many large cities such as Boston, San Francisco, Oakland, Phoenix, Chicago, Washington D.C., and others.

Fair Market Rents are established to set rents in the Housing Choice Voucher Program, formerly known as the Section 8 program, and for the nations Home program. As the FMR's change, the value of the vouchers are worth more or less, depending on ones geographical location.

The FMR's are set annually, and generally are increased slightly to keep pace with the cost of rent increases and utilities. To the utter shock of many housing officials from across the nation, this year HUD decided to decrease the value of vouchers in many areas of the country after using a new formula to calculate the latest FMR's.

As many landlords try to increase the rents on their Section 8 renters to keep pace with inflation, the renters and landlords across the nation are quickly realizing that the vouchers no longer cover the cost of their existing contracts, let alone another rent increase.

The result is that renters by the tens of thousands are finding out that they no longer can afford to pay the high rents where they are at and that they may be forced to relocate to the nearest slumlord ghetto in their area if they want to save their housing vouchers.

As an example, in Oakland, the FMR's decreased significantly. Vouchers decreased in value by as much as $78 for two-bedroom units, $77 for three-bedroom units, and $32 for four-bedroom units.

San Francisco took a huge hit, and with the Housing Authority in that City considering bankruptcy as a means to get out from under their financial burdens, the latest round of FMR's is sure to cause even further panic.

In San Francisco, vouchers for studio apartments decreased in value by as much as $84 per month, one-bedroom unit vouchers decreased by $176, two-bedroom unit vouchers decreased by $236, three-bedroom unit vouchers decreased by $380, and four-bedroom unit vouchers decreased in value by as much as $405 per month.

In Marin County, the Section 8 vouchers decreased in value by the same amount as in San Francisco, but according to the newest Marin housing authority director, Kimberly Carroll, she believes that it is still not a crisis for her tenants, or landlords.

"HUD states that local housing authorities can set the payment standards between 90%-120% of the FMR's- our payment standards were set for 90% before the change and now they are at 105% of FMR. Monthly payment standards--1 bed=1,288 , 2bed=1,613 , 3bed=2,153 , 4bed=2,276.

All units need to pass rent reasonableness standards and we do not pay over the payment standard. Our payment standards have been set by examining the average rents in Marin and we have found these payment standards to be sufficient in most cases for our county," said Kimberly Carroll.

In Montana, the housing crisis is bleak for renters needing assistance. In Butte, around 54 percent of renters cannot afford a two-bedroom apartment on their own, and meanwhile in Missoula, 50 percent of it's renters need assistance. In Billings, 48 percent of it's renters can't afford a two-bedroom apartment, and in Helena, 46 percent lack the funds to pay their rents on their own. On October 20, the Montana Standard reported that the projected cuts to their Section 8 program in Montana could force 640 families to lose their housing assistance.

It's not difficult to be confused by the fact that some housing agencies are gravely concerned by the changes in the FMR's, while others seem to take pains to make sure that their tenants do not become overly concerned by the funding cutbacks taking place.

Housing groups around the nation dispute HUD's latest FMR's and believe that in the areas of large cities where the FMR's have decreased the most, either something has changed dramatically in those market,s or there is something very problematic with the latest methodologies being used by HUD to come up with those figures.

In the Portland area of Oregon, the FMR's have decreased by as much as 10% since October 1, and in Bergen and Passaic counties of New Jersey, vouchers for three-bedroom units in that area have decreased in value $266 per month. In the New Hampshire counties of Seabrook and South Hampton, their FMR's decreased by 30 to 35 percent, and in the Chicago area, vouchers for three-bedroom units have decreased by as much as $89 per month.

The newly decreased FMR's in three and four bedroom units affect areas containing nearly half of all the Section 8 rental households in the United States. Large families are affected the most by the decrease in the value of their rental vouchers.

So much for the Bush administrations claims to be for the American family. The Bush administration's policies are anything but friendly to families across the nation, and their policies hurt large Hispanic families the most. As an example, in nearly 100 counties across the nation, under the Bush administration, HUD has drastically decreased the value of vouchers in four-bedroom units by more than 10 percent.

The decrease in value of vouchers for four-bedroom units are killer to many large families, and in many locations the cuts go way beyond 10%. As an example, in San Jose, CA, the vouchers for four-bedroom units decreased in value by $845 per month or as much as a 30.2% decrease in value to cover the cost of their rental contracts!

"It's real scary, what's going on," said Marin County Section 8 tenant, Marion Brady. "Section 8 tenants do not know what to expect next from HUD, or the housing agencies that are going to try to make up for the funding cuts. Nothing seems to get resolved, and it only gets worse with HUD Secretary Alphonso Jackson always figuring out new ways to attack the Section 8 program."

The funding cutbacks in public housing and the Section 8 program have become so severe that on October 19, New York City officials have announced that, "effective immediately, homeless families in emergency city shelters would no longer be allowed to apply for federal rent vouchers or public housing."

The homeless in emergency shelters are now being blocked by City officials from even trying to get into public housing or applying for a section 8 voucher!

New York City has a homeless crisis that has around 37,000 people people in their emergency homeless shelters, including 9,000 families. For the homeless population in New York's shelters to lose access to Section 8 vouchers and public housing, there is little hope for the multitude of poor that may try to find their way out of the cold hearted streets of despair in America.

According to the US Conference of Mayors, they estimate that more than 3.5 million people, or 1.25 percent of the US population, are living in homeless shelters or on the streets.

According to the US Census Bureau, last year the number of Americans living below the poverty level rose by 1.3 million to 35.9 million or 12.5 percent of the population. The number of homeless people grew by around 19 percent in 2003 and 13 percent in 2002.

Life under the Bush administration is becoming very difficult for millions of Americans across the nation, and unless the people force Bush out of office, life will not get any better for the poor, elderly or disabled.

Housing activists have until November 5, to appeal the lastest FMR figures from of HUD.

Lynda Carson may be reached at 510/763-1085 or tenantsrule [at] yahoo.com