There were equal
amounts of confusion and concern last Spring when word spread that
funding for the Housing Choice Voucher Program would be cut for 2004.
Confusion because not everyone was aware of the extent of the reductions
and concern because no one was quite sure how they would affect families
nationwide. Once the dust settled and the cuts became reality, the
concerns shared by many turned out to be well warranted.
Background
The Housing Choice Voucher Program (Section 8) serves
over two million low income people nationwide. 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.
In May 2004, the U.S. Department of Housing and Urban
Development (HUD) announced that Section 8 funding 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 released until late April 2004, even though
the budget was signed into law in January. Worse, 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.
Bowing to pressure from public figures all across the
country, HUD added additional funding for fiscal year 2004 to ease the
burden on local Section 8 administrators. The five percent increase
covered the cost of inflation, but was not enough to make up for the
cuts that had been made to funding for administrative expenses. Because
of the lateness of the cuts, many agencies across the country were still
forced to reduce program costs.
The Rental Assistance Corporation, like many Section 8
agencies across the country, responded to news of the cuts by lowering
payment standards. A payment standard, which is calculated based on the
number of bedrooms and the estimated average rent for a given area, is
the maximum amount of rent (including utilities) a Section 8 tenant
would be approved for. Some tenants may choose to rent an apartment
which is over the payment standard, and pay up to an additional 10
percent of their monthly income to cover the additional rent.
Another effect on voucher holders is that their housing
choices are diminished. Because the supply of affordable housing has
been reduced, they may not be able to search for housing in areas where
rents are higher. These places often have better schools, more job
opportunities and access to stores and other amenities not found in
lower income areas.
Happy New Year
While the ramifications of the 2004 cuts are still being
felt, the problems may be compounded due to the 2005 federal budget.
According to a February 11, 2005 report done by the Center On Budget And
Policy Priorities entitled “Appropriations Shortfall Cuts Funding For
80,000 Housing Vouchers This Year”, the funding provided for 2005 is
substantially below the amount needed to fund all of the vouchers
currently in use. The study reports that the shortfall of $570 million
is equivalent to the loss of about 80,000 vouchers nationwide (or about
3.8 percent of the 2.1 million vouchers set to expire in 2005)
At issue is the rigid funding formula mandated by the
Appropriations Act. The Act directs HUD to determine 2005 funding for
Section 8 agencies for the year based on its average subsidy amount for
vouchers in use over the three month period May-July 2004.
Traditionally, this is the season when more people move than at any
other time; therefore, fewer vouchers are in use. Basing the funding on
units leased during the summertime resulted in an overall cut to all
Section 8 agencies.
Changes in administrative funding will also cause serious
problems. Under the new policy agencies will receive the same amount of
funding regardless of the number of families they serve. In the past,
administrative funding was based on how many vouchers were dispersed by
the agency. Even though administrative fees will remain relatively the
same, agencies will be forced to manage on significantly less than they
received in 2003.
All three Section 8 agencies operating within Erie County
are feeling the effects of these cuts and report that between them, over
600 fewer low-income families will be getting vouchers. This year, the
Rental Assistance Corporation will be able to assist 210 fewer families,
the BMHA about 112 fewer, and the Belmont Shelter Corporation about 300
fewer vouchers.
In December 2004, after learning that they would be
receiving considerably less funding for the coming year that they had
anticipated, Belmont was forced to take drastic action. Families that
had been selected to receive vouchers based on the anticipated higher
level of funding were retuned to their original place on the waiting
list. Some of these families were in the process of moving at the time.
(See “Section 8 Funding Cuts Hurt.”
Representatives from all three agencies emphasized that
the number of vouchers they anticipate will be reduced this year is
contingent upon all other factors (e.g. family’s income) remaining the
same. A decrease in the portion of the rent paid by tenants would lead
to more money being paid out by the agency for existing vouchers.
Consequently, the amount of new units that could be funded would
decrease, and even fewer vouchers issued.
The Cuts Come HOME
The lack of new voucher recipients has had an effect on
the Community Housing Center. New Section 8 voucher holders often turn
to the CHC for assistance in finding housing in low-poverty areas. The
scant few new voucher holders, combined with HOME’s precarious funding
situation may force the CHC to explore changing the eligibility
requirements for the program.
All of the problems brought forth by the funding
shortfall affect Erie County and its residents, especially those within
the City of Buffalo. According to the 2000 Census, 26.6 percent of the
population of the City lives beneath the poverty level as determined by
the U.S. Department of Health and Human Services.
With so many families and individuals in need, any cuts
or reductions in vouchers are devastating. Section 8 vouchers provide
not only help with rental payments, but provide an opportunity for
voucher holders to move to better areas and to make a better life for
themselves and their families.
And in this hyper-segregated community, vouchers present
an opportunity to move into neighborhoods that low-income families might
not otherwise have. The Section 8 program plays a vital role in the
building of an integrated community that has the benefits of all and not
a select few. Should the Section 8 program be further reduced, it will
become that much more difficult to create a community that we all can
live in.
