Slashing Section 8

While
the rich are getting tax cuts, the neediest amongst us may literally lose their
roofs.

            Included on the list of social
services being gutted by the Bush Administration is Section 8, a federal
housing program that provides aid to about two million low-income families.
Mostly through vouchers, the federal government allocates funding to local
housing authorities, which then pass the money to the poor in the form of rent
assistance. Housing Authorities throughout the country knew cuts were coming,
but no one was sure how deep they’d be.

            In April, “the issue boiled to
a head,” says Michael Tonovitz, director of leasing operations at the Rochester
Housing Authority. That’s when the United States Department of Housing and
Urban Development (HUD) announced the finances available for Section 8 programs
throughout the nation. The program will no longer cover the full cost of the
vouchers, but will cap the payments at the levels of last August’s rental
rates, adding an adjustment for inflation. Any increase to rental rates since
then will not be covered. In addition, the cuts are to be implemented
retroactively to January 1 of this year.

            In total, the program was cut to the
tune of about $1.6 billion. Most cities took a severe blow, but Rochester has
so far only suffered a flesh wound.

            “I’ve done our estimates, and,
at least this year, we’re going to be alright,” Tonovitz says. “We’re
taking a 10 percent cut to our administrative fees. If we had to, we could live
with that for a year.”

            As long as HUD keeps its word about
the announced funding, the average recipient of Section 8 benefits in Rochester
should not notice a difference this year, Tonovitz said. The Rochester Housing
Authority has enough funding to maintain the voucher payments currently in use.

            Section 8 benefits nearly 6,500
families in Monroe County, all of which live at or below the poverty level.
Under the program, recipient families are responsible for finding housing and
paying a portion of their monthly income — typically between 30 and 40
percent — towards rent. The remainder of the rent is paid by the Rochester
Housing Authority.

            The Center on Budget and Policy
Priorities (CBPP), a liberal-leaning Washington-based research group, issued a
scathing condemnation of the cuts. The group estimates a financial shortfall of
hundreds of millions of dollars to the nation’s poor.

            “The new HUD policy will result
in many state and local housing agencies failing to receive sufficient funding
to continue supporting all vouchers now in use,” the report states.

            Consequently, the agencies charged
with helping low-income families will have to dramatically cut back on
services. The new policy represents an “unprecedented departure from the
longstanding federal commitment to provide state and local housing agencies
with adequate funding to support all vouchers in use,” the report states.

            HUD Secretary Alfonso Jackson and
his office lay some of the blame for the cuts on individual housing
authorities. They stretched the federal funding they received to provide
housing for more families than initially estimated, Jackson says. Because of this,
HUD says, too many families became dependent on funding that was never
guaranteed.

            Tonovitz, however, says it is a
common practice for any housing authority to try to get the most value for the
money spent. The more families served, the better, he says.

            “It burns me up as a
professional when the HUD secretary says that many housing authorities created
their own problems through mismanagement,” Tonovitz says. “Just
because you served more families than you’re authorized? In many cases, that’s
good management.”

            There is also a dispute over the
amount of money available to HUD for the program.

            The CBPP report says not only are
the cuts unnecessary, but that HUD will actually end up with a surplus of $200
million of unspent funds allocated by congress for use for the voucher program.

            “Congress provided HUD with
substantially more money than will be used under HUD’s restrictive new
policy,” the report states. According to the CBPP, a joint House and
Senate appropriations committee awarded HUD “the amount needed to support
all vouchers likely to be in use.”

            HUD, however, disputes these
figures. The department claims that if the system is not revamped, the current
process would lead to a $191 million deficit, as more vouchers are being issued
than funding permits.

            In addition, HUD says the new policy
is flexible and allows for the neediest housing authorities to receive
supplementary money. Those authorities have until July 15 to file a request,
which will be judged on a case-by-case basis.

            Still, for now, the Rochester
Housing Authority says it will be able to operate and provide basically the
same standards for the city’s poor. But no one is taking the city’s situation
for granted.

            “I think this is an
anomaly,” Tonovitz says.

            If rental rates in the city increase
faster than inflation rates, or if the formula HUD uses to ascribe payment
amounts changes, Rochester could face the same problems as Syracuse and New
York City, both of which lost funding for vouchers that have already been
issued.

            “I think we’re one of the few
large city housing authorities that are not in panic mode right now,”
Tonovitz said. “We could be in the same boat as the rest of them next
year, though, depending on how the payments are structured.”

This article appears in Jun 2-8, 2004.