Home Wreckers

Budget shenanigans by HUD and Bush threaten section 8 housing

Brenda Finley needs surgery on both of her knees. They've been destroyed by years of physical abuse. "My kneecap was crushed twice," she says. "Once playing football; once with a golf club." The club was swung by her ex-husband, whom she left in 2000.

Since October, Finley says she's been unable to hold a steady job owing to her injuries. In the past she's worked as a manager of a fast food restaurant and in a laundromat. "I've done my share as far as being a good citizen," she says.

Right now Finley supports herself and her son on a $203 general assistance check from the state, but she's hoping to qualify for federal disability support. In the meantime, money is tight. "I pray," she says. "I go to food shelves. I do hair. I baby-sit."

In the street: Lowanda Harvey, and scores of others, might lose her housing if Bush's HUD cuts stick
Raoul Benavides
In the street: Lowanda Harvey, and scores of others, might lose her housing if Bush's HUD cuts stick

One thing that Finley hasn't had to worry about up until now is paying the rent on her two-bedroom house on the East Side of St. Paul. For the last three years she's been enrolled in the Housing Choice Voucher program, which means that she's only required to pay 30 percent of her income for rent and the federal government covers the rest.

But recent cutbacks in the program, often referred to as Section 8, have left poor families like Finley's in danger of losing their housing assistance. In April, the U.S. Department of Housing and Urban Development (HUD) announced that it was capping the program's disbursements at August 2003 levels. What's more, the change in funding was retroactive to the beginning of 2004. In essence, many housing authorities discovered that they would be receiving far less money than anticipated in the middle of the fiscal year. The St. Paul Public Housing Agency, for instance, was facing a $4 million shortfall--or more than 10 percent of its annual voucher budget.

After being deluged with complaints, HUD agreed in May to pump an additional $150 million into the program. The amount that each housing authority received, however, varied wildly and no one seems to be able to determine what the basis was for the allocations. The Metropolitan Council Housing and Redevelopment Authority, the largest administrator of vouchers in the state, received an entire month's worth of operating support. By contrast, the Minneapolis Public Housing Authority didn't receive a dime.

"It's almost as if they at random wrote checks to housing authorities," says Jack Cann, an attorney with the Housing Preservation Project, a Minneapolis nonprofit.

Even more troubling to affordable housing advocates is the fact that they don't believe the cuts implemented by HUD were necessary and argue that Congress didn't intend them when it passed this year's budget. (The voucher program was created in 1974 and provides assistance to some two million people nationwide.) Sen. Norm Coleman has written two letters to HUD urging the agency to dole out more money for the program. And Sen. Mark Dayton is a co-sponsor of a bill that explicitly states that Congress's intention was to fully fund the voucher program.

 

Cann and others are now contemplating suing HUD to force the agency to fully fund the voucher program. But so far it's uncertain who would actually serve as the plaintiff in a case. "Part of the problem is that the people that are best suited to sue HUD right now are the public housing authorities, but none of them want to do it because they will be punished," Cann notes.

Local housing authorities don't have time to wait for a lawsuit to wind its way through the courts, anyway. They are now scrambling to find ways to save money without kicking people off the rolls. "The best way to think about it is, we're operating in an environment of complete uncertainty," says Tom Streitz, deputy executive director of the Minneapolis Public Housing Authority. "It makes administrating the program almost impossible and it certainly is terrifying to the tenants."

The Dakota County Community Development Agency, for instance, administers 2,202 vouchers. Households enrolled in the program are generally required to pay 30 percent of their income for rent. Under HUD's new funding formula, Dakota County estimates that it's receiving $571 per month for each voucher, while its actual cost is $596 per voucher. This means that the organization is facing a monthly budgetary gap of $55,000.

Similarly, the St. Paul Public Housing Agency is now, after HUD gave the organization an additional $900,000 in May, facing a $3 million budgetary shortfall. The agency initially planned to close the gap by reducing the amount that it pays in rents by 15 percent. But that plan produced widespread fears that landlords would simply abandon the voucher program rather than see their profits slashed by 15 percent.

Last month the St. Paul agency tweaked the changes in an attempt to placate landlords. Under the new plan, rents will be reduced by 7 percent. In addition, the housing agency is selling off two pieces of property valued at $370,000.

Even if local housing authorities find a way to scrape by without immediately making drastic cuts, the future for the voucher program is bleak. The Bush administration has proposed a major overhaul of the program in its 2005 budget. If the budget is enacted, housing authorities would receive block grants largely uninhibited by federal restrictions. The purported intention is to liberate local agencies from bureaucratic meddling and allow them to distribute the funds more efficiently.

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