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Insight Fall 2004

A Choice to Be Made

The Housing Choice Voucher Program (Section 8), which serves over two million low income people nationwide, is in danger of being eliminated. This federal program, which has been in place since 1975, serves the dual purpose of helping low-income families meet rental costs and enabling them to live in the neighborhoods of their choice. In Erie County alone, Section 8 assists over 9,500 low-income families, the majority of whom live in Buffalo. Despite the success of the program, recent developments may mean changes to how the program is administered or an elimination of the program altogether.

            In May 2004, the Department of Housing and Urban Development (HUD) announced that funding for the HCVP would be reduced. Rather than adjusting funding levels to reflect increased market rents and inflation, the funding levels were set back to those of August 2003. Members of the U.S. Congress from both parties were angered because details of the cuts were not given until late April 2004, even though the budget was signed into law in January.

            Making the situation worse was that these cuts were made retroactive to January 1, 2004, which left providers across the country scrambling to come up with funds to cover the shortfall. In extreme cases, Pubic Housing Authorities told landlords that their payments would not be covered because the money was not available.

            Thanks to pressure from public figures all across the country, HUD relented and added additional funding for fiscal year 2004 to ease the burden on local HCV providers. The five percent increase covered the cost of inflation, but still was not enough to cover cuts to funding that had been made to administrative costs.

An Uncertain Future?

Not only are Public Housing Authorities dealing with funding shortfalls and budget deficits for the fiscal year 2004, but there may be more drastic changes coming for 2005. Critics of the Housing Choice Voucher Program have argued that the program is bloated and funding has increased far greater than market-based rents. As a result, the Administration wants to completely change how the HCVP is administered.

Currently, public housing authorities are funded based on the number of families served and the cost to house those families. The Administration’s plans calls for funding to be administered in a block grant system. This plan, they argue, will give local authorities needed flexibility to determine the needs of their individual communities. This plan has faced criticism from politicians from both parties, housing providers and activists alike. They claim that without strict guidelines about how the money can be used, the Voucher Program may not be funded properly and will not assist those in need.

            Compounding the Administration’s new plan to change how the program is administered is a proposal to slash funding for it. The plan calls for a reduction of $1.6 billion in 2005, and $4.6 billion total by 2009. According to a study done by the Center on Budget and Policy Priorities, over 250,000 vouchers nationwide would be eliminated because of these cuts, including 792 from the three agencies that serve Erie County: the Rental Assistance Corporation of Buffalo, Belmont Shelter Corporation and Buffalo Municipal Housing Authority. The study estimates that if the proposed cuts are accepted, by 2009 30 percent of those currently receiving rental assistance would be dropped from the program.

            Even those who remain on Section 8 would be affected. With less funding to work with, many PHA’s would have less leeway when negotiating a rental agreement with a landlord. Currently, a public housing authority does not have to strictly enforce fair market rent restrictions when negotiating a fair price for a unit. This flexibility gives tenants more options when looking for housing and puts them on an equal footing with those who have a higher income. With less money to work with, Public Housing Authorities will have to strictly enforce fair market rents. This could lead to a reduction in the number of landlords willing to accept a Housing Choice Voucher, or more money being paid each month by a voucher holder.

            Members of the House of Representatives addressed these concerns when negotiating a budget for 2005. What they decided to do was to put money back into the HCV program, but at the expense of others in need. HUD programs benefiting the elderly, the disabled and the homeless may now be placed at risk.

As of right now, none of these proposals are final. The budget for the fiscal year 2005 is scheduled to be done by October 1, 2004 (although that deadline is rarely met on time) The fate of the Housing Choice Voucher Program is now in the hands of the United States Senate, who will debate the issue and decide the fates of millions of Americans who are affected by this program.

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