Affordable Housing

Section 8 Still In Trouble

Despite the Department of Housing and Urban Development’s recent announcement of a solution to the Section 8 funding crisis for fiscal year 2004, advocates across the country remain concerned that many housing agencies will still face budget shortfalls and be forced to increase rents or reduce the number of vouchers they provide.

The problem began in April when HUD issued a notice retroactively changing the way it funds the Section 8 voucher program. The decision was based on a controversial interpretation of language in the FY2004 appropriations bill, despite apparent Congressional attempt to provide enough money to fully fund all existing vouchers by adding additional funding. The change has left many public housing agencies with insufficient funds to honor all of their voucher contracts this year. Across the country state government officials, housing advocates, and housing agencies themselves have collectively weighed in against the new policy. In addition, a number of congressional leaders have sent letters to HUD calling for a withdrawal of the April notice and legislation has been introduced in both the House (H.R. 4263) and Senate (S. 2467) to clarify that vouchers should be funded based on their actual costs.

Responding to public and congressional outcry, HUD announced in late May that it would solve the funding crisis by restoring $150 million to 500 agencies and giving agencies a full FY04 inflation adjustment. However, a study by the National Association of Housing and Redevelopment Officials (NAHRO) finds that HUD’s efforts still fall $170 million short of the amount needed to cover the shortfall. Members of Congress continue to speak out against the changes and advocates are encouraging Representatives and Senators to co-sponsor H.R. 4263/S. 2467 to require HUD to fully fund all vouchers for FY2004.

Outlook Not Much Brighter for FY2005

Unfortunately, the Section 8 funding crisis is not temporary one. The President’s budget request for FY2005 was over $1.6 billion short of what is needed to fully fund all vouchers currently in use and also proposed to “block grant” or cap funding for the program, which would lead to significant funding reductions over the next several years. This funding shortfall and the accompanying program changes would mean the loss of 250,000 vouchers in 2005 and some 600,000 by 2009 according to the Center on Budget and Policy Priorities. More information and a state-by-state breakdown of the impact of these funding cuts is available at the Center’s website – http://www.cbpp.org

Congress has so far refused to sign-off on the President’s “block grant” proposal, but will likely face a very difficult time filling the gap in Section 8 funding this year given the tenor of this year’s budget debate and pressures from the Administration to stay within its budget framework. Several letters have been sent by members of Congress to the appropriations committees urging full funding for Section 8 in FY2005, but it remains unclear how appropriators will proceed since the House and Senate failed to reach a final budget agreement.

About Section 8

The Section 8 Housing Choice Voucher program is the nation’s largest low-income housing assistance program. It currently provides vouchers to approximately two million low-income families, elderly people, and people with disabilities to help them cover the gap between the costs of housing in the private market and what is affordable to them at their income levels. Unfortunately, the program currently only serves one in four eligible families and there are long waiting lists for vouchers across the country.

In May 2002, the bipartisan, congressionally-chartered Millennial Housing Commission strongly endorsed the Section 8 program, describing it as “flexible, cost-effective, and successful in its mission,” and recommended that Congress appropriate, “additional funds for substantial (emphasis added)annual increments of vouchers to address the housing problems of extremely low- and very low-income families who lack access to other housing assistance.”(1) However, the Administration and Congress have failed to follow through with these recommendations.

(1) Meeting Our Nation’s Housing Challenges: Report of the Bipartisan Millennial Housing Commission Appointed by the Congress of the United States. May 30, 2002. Accessible online at: http://www.mhc.gov/MHCReport.pdf

Links

Center on Budget and Policy Priorities: Series on Section 8

National Low-Income Housing Coalition: Advocate's Guide to Section 8, 2004 Section 8 Crisis, 2005 Budget Cuts

National Housing Conference: Policy Bank