Administration Alters Rules for Rent Aid
Housing Advocates Criticize
Section 8 Changes
By Amy Goldstein
Washington Post Staff Writer
Wednesday, April 21, 2004; Page A21
The Bush administration is changing the nation's largest program of housing assistance so that, for the first time, the government no longer is promising to pay the full cost of rent vouchers that help nearly 2 million poor families.
The Department of Housing and Urban Development is putting into place the new payment method for the program, a cornerstone of federal housing policy known as Section 8, before Congress decides whether to endorse a broader proposal by the administration that would eliminate many longtime federal rules governing which people get rent assistance and how much they must pay.
The payment change, which is infuriating congressional Democrats and advocates for affordable housing, is essentially a different route for the administration to accomplish a central goal of its larger proposal: to constrain rapid growth in the program's spending.
Section 8 is a form of housing assistance that was created three decades ago and traditionally has been more popular among Republicans than the nation's network of public housing, because it relies on the private market. The program allows poor families, disabled people and the elderly to obtain a rent voucher -- 1.9 million are available this year -- from a local housing authority and take it to any private landlord in the community who is willing to accept it.
Until now, the government has allotted each of the nation's 2,500 participating housing authorities a specific number of vouchers each year, set rent limits for every community and then reimbursed their costs. Under the new method, HUD pays each housing authority based on its costs last August, adjusted by an inflation formula. That formula is not guaranteed to keep pace with rent increases.
The method is so new that HUD has not formally notified housing authorities in writing, although federal officials have made it retroactive to January and have begun to talk about it with local agencies. HUD officials said they do not yet know how much money will be saved, although they said the program would run out of money for the year too soon if they did not make the switch.
Michael Liu, HUD's assistant secretary for public and Indian housing, said in an interview that, in changing the rules, the agency was following directions set forth in a few sentences in the fiscal 2004 appropriation that Congress finished two months ago, which gives $16.4 billion for Section 8. "We intend to implement the law," Liu said.
But the leaders of advocacy groups representing local housing officials and low-income tenants say that the language in the budget is ambiguous and that President Bush's housing advisers are misinterpreting it to justify changes they want.
Jonathan Zimmerman, a housing policy analyst for the National Association of Housing and Redevelopment Officials, said the organization's analysis suggests that at least 900 local housing authorities, spanning virtually every state, will end up this year with less money than they need to cover their vouchers' cost.
Sandra Henriquez, administrator of the Boston Housing Authority, said she learned from HUD a few weeks ago that federal payments suddenly were $1.2 million less than her agency needs to pay for its 11,000 vouchers. And because of other financial changes in the program that the Bush administration has made, her agency has used up the money it had in reserve.
"We're all just hoping HUD will come to its senses," Henriquez said. For the moment, she said, her agency will be unable to afford some of the vouchers it has been allotted. Her choice, she said, boils down to whether to deny vouchers to some of the poorest families in the program, who require the most government assistance with their rent, or to a larger number of participants with slightly higher incomes who can pay more of their own rent.
Massachusetts GOP Gov. Mitt Romney has sent HUD a letter of complaint, as have many of that state's congressional Democrats.
William P. Murphy, who directs the rental assistance division in Montgomery County's Housing Opportunity Commission, said he, too, believes he would be unable to afford all of his agency's rent vouchers.
Liu said HUD will consider giving housing authorities extra money if they can prove a hardship. Still, he said, low-income housing advocates who want to reverse the change "would put the program in an automatic deep hole."
© 2004 The Washington Post Company