Budget Watch: Housing Vouchers May Get the Axe

It’s likely that President Bush’s budget for 2006 will include cuts to the Housing Choice Voucher Program, usually referred to as Section 8.

Section 8 provides the poor, elderly, and disabled with housing coupons that they can redeem with participating private landlords. Tenants usually pay about 30 percent of their income in rent, and the vouchers make up the rest, up to a limit determined by the federal government that reflects local housing markets.

About 2 million Americans use the Section 8 program, which is popular with both tenants and government officials because it provides an alternative to large public housing developments. It gives low-income families a chance to live in healthier neighborhoods with better schools.

Why could Section 8 get cut?

In order to decrease the deficit, Bush is planning to cut a variety of domestic programs - everything from college tuition grants to Amtrak subsidies. And the Bush administration has wanted to alter housing vouchers for some time.

In 2003, the administration tried to turn Section 8 into a block grant program in which aid would be fixed and local housing authorities would be barred from requesting additional funds. Congress did not pass this proposal even though it reflected the administration’s wish to make public housing authorities more fiscally disciplined and, if necessary, to cut services to accommodate the shrinking Treasury.

Critics of the Section 8 program point out that its budget has drastically increased over the past few years, and officials at the Department of Housing and Urban Development (HUD) say that many local housing authorities are not executing the program efficiently.

In order to force housing agencies to perform more effectively, Congress clearly set Section 8 subsidies in 2004, thereby allowing for less flexibility in the program.

Today’s Section 8 problems

For the 2005 fiscal year, Congress allotted $13.4 billion for all Section 8 vouchers. Based on housing costs through July 2004, this amount may not cover current Section 8 recipients in many big cities, where rents rise much faster than the national average.

New York City, for example, may be about $61 million short in 2005 if it doesn’t get more federal dollars, a scenario that will cause the city to cut benefits. New York issues more vouchers than any other city, about 118,000 per year at a cost of roughly $1 billion.

For fiscal year 2005, HUD granted New York City a 4.7 percent cost of living increase, but the actual increase was around 6.5 percent, according to the New York City housing authority’s General Manager Douglas Apple. This underestimation could cause hundreds of families to lose their housing vouchers, and will keep many more from being admitted into the program.

New York’s situation is similar to that of other urban centers, which tend to have large populations of low-income residents and quickly-rising housing costs.

But the Section 8 funding shortage reflects a larger problem concerning Americans in all areas, both urban and rural. According to the National Low-Income Housing Coalition in Washington, sixty-five million Americans, or 24 percent of the population, struggle to hold on to safe, affordable housing. Many of these people are elderly or disabled, but others are juggling several low-paying jobs or are single parents, usually single moms.

This means that women and children are disproportionately hurt by funding cuts to affordable housing programs like Section 8.

Ownership society

To realize his vision of an "ownership society," or a culture in which individuals own and manage all of their needs, President Bush has encouraged homeownership among low-income and minority families.

This approach to the nation’s affordable housing challenge is most beneficial to two-parent families with steady income. But the elderly, the disabled, and single-parent families are less likely to profit from the American Dream Down Payment Act, which Congress passed in 2003. This bill authorized $200 million for down payments for low-income families.

Although they are in favor of helping underprivileged families buy their own homes, affordable housing advocates say that Bush’s home ownership programs should not come at the expense of Section 8, which helps those struggling with homelessness.

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Article Posted on: 1/28/2005