Bush Proposes Huge Cuts to Public Housing 

LYNDA CARSON / Street Spirit v.10,n.3, (San Francisco) 1mar04

The massive cutbacks in HUD's budget would place at least 250,000 elderly, disabled and low-income renters at risk of losing their vouchers.

Bush's Public Housing

The Bush Administration's dangerous attempts to achieve world domination by use of force, along with the very expensive creation of a police-state apparatus in America, have cost Americans dearly and have severely cut into the nation's most needed domestic programs for years ahead.

The Department of Housing and Urban Development (HUD) is feeling the pinch of cost-cutting measures being proposed by the Bush Administration for fiscal year 2005, in addition to internal audit problems occurring at HUD during recent years that resulted in the agency being unable to account for $59.6 billion. Critics have been asking "where's the money?" As of yet, the question has not been resolved [see http://www.whereisthemoney.org/hotseat/melmartinez.htm].

The Bush Administration proposes several billion dollars in cuts to the Section 8 Housing Voucher Program over the next five years. The cuts could result in a loss of 250,000 vouchers in 2005, and 800,000 vouchers by 2009, according to a new report from the Center on Budget and Policy Priorities (CBPP).

Barbara Sard, director of housing policy at the CBPP, stated, "The Administration proposal would abandon three decades of progress in improving the voucher pro-gram, and would undermine the program's goal of providing access to affordable, decent housing for people who otherwise would be unable to secure it."

HUD's proposed budget for 2005 requests $31.3 billion to fund its pro-grams; approximately 74 percent of the HUD budget is earmarked to fund $23.2 billion for Section 8 and public housing.

HUD subsidizes about 1.2 million public housing units through local agencies known as Public Housing Authorities (PHAs), usually operated by city governments. The HUD website states that there are 3,300 Public Housing Authorities in the United States. California has 124 PHAs that control 44,953 housing units.

The Oakland Housing Authority operates 76 developments containing 3,308 public housing units and provides subsidies for 10,919 Section 8 units funded by the federal government (HUD). The Oakland Housing Authority has 307 units in the Hope VI Program, and in total there are 267 scattered public housing sites in Oakland. On average, there are 6.5 rental units per site, offering 2.9 bedrooms per apartment for the renters.

The Bush Administration's new pro-posed budget for fiscal year 2005 has severe consequences for the elderly, disabled and low-income renters using the Section 8 voucher programs. Bush's new budget proposal also cuts spending meant to revitalize severely distressed public housing projects across the nation.

On February 2, the Center on Budget and Policy Priorities, a nonprofit organization that analyzes federal budgets, stated that funding for the housing voucher pro-grams (Section 8) would fall more than $1.6 billion short of the amount needed to maintain the vouchers already in use. This shortfall places at least 250,000 elderly, disabled and low-income renters at risk of losing their housing vouchers, unless funding levels are increased enough to maintain the existing vouchers.

Other cuts being proposed for HUD's 2005 budget would cause additional hard-ships for the renters in public housing pro-grams and the Section 8 programs.

A look at the HUD budget summary for fiscal year 2005 reveals that federal funding for revitalization of public housing developments has decreased rapidly. Funding in 2003 was set at $570 million, and then declined to $149 million in fiscal year 2004. But Bush's current proposal would literally zero out this portion of the HUD budget — zero dollars are being proposed for 2005.

Funding for the Hope VI Program was set at $149 million in fiscal year 2004, and the new budget proposed for 2005 slashes the funding to nothing. The Hope VI Program demolished and converted public housing developments into mixed-income housing projects; and critics have claimed that the Hope VI projects have resulted in a huge loss of low-income housing for renters across the nation.

Even at a quick glance, the summary of the proposed HUD budget for 2005 may be shocking to the residents of public housing. No funding is being allocated to revitalize severely distressed public housing developments, and $30 million is being granted to accelerate the demolition of public housing units across the nation. HUD claims that it is committed to ensuring that the public housing stock is either maintained in good condition or demolished. Making matters even worse for renters in public housing units that may face demolition, Tenant Protection Replacement Vouchers are proposed for elimination. Funding in 2003 and 2004 was set at $48 million annually, with zero funding pro-posed for fiscal year 2005. Tenant Protection Replacement Vouchers have been used to assist renters to relocate from public housing units being demolished or converted into Hope VI Projects; and the vouchers also are used to assist renters losing their housing in Section 8 buildings where the owners decide to opt out of the programs.

Another concern to HUD recipients is a new proposal called the "Flexible Voucher Program" (FVP) which is intended to replace the Housing Choice Voucher Program. When the Section 8 Certificate Program was combined with the Section 8 Voucher Program, the new combined program was named the Housing Choice Voucher Program (HCVP).

HUD claims that the HCVP is not sustainable, and has reduced HUD's ability to fund other programs. Countering HUD's claims, critics charge that rents have been decreasing nationwide, and that in the following years the Section 8 programs will be less costly to operate.

HUD is proposing to return to a dollar-based grant program — a switch from the existing unit-based system which HUD alleges has allowed for a dramatic increase in program costs. If the proposed Flexible Voucher Program (FVP) replaces the existing HCVP, it will allow greater discretion by Public Housing Authorities to avoid existing mandated federal requirements, and would terminate the "one size fits all" program design.

The proposed FVP would include all administrative costs in the total grant, and would reward the Public Housing Authorities with bonuses for increasing the number of participants that use the voucher assistance programs on a transitional basis rather than a permanent basis to fund their housing needs.

In addition to the proposed elimination of Section 8 renters who use vouchers on a permanent basis, the new HUD budget also proposes an experiment called the "Public Housing Reform Demonstration" (PHRD) which is intended to involve 50 participating PHAs in the experiment.

This experiment will maximize the ability of the PHAs to make decisions affecting their tenants in public housing units while serving the same number of low-income families. Participating PHAs in the experiment will be allowed to combine the use of capital and operating funds to set locally determined rent structures for tenants in public housing, while simultaneously being able to free themselves from many requirements of federal reporting.

HUD claims that this experimental Public Housing Reform Demonstration will allow for more flexibility for the PHAs, and will allow the local PHAs and HUD to shift to an asset-based management practice in the public housing projects. It appears that HUD believes that more flexibility allows the PHAs to be in a better position to persuade public housing renters to find a job and work longer hours, whether they are able or not.

The experiment will be evaluated and measured; and 50 other PHAs will be used as a control group. The control group must follow current regulations and housing laws as a comparison to the proposed 50 PHAs that will be allowed to avoid existing housing laws and regulations.

Renters in the Section 8 voucher pro-grams are not allowed to pay landlords more than what is known as the Fair Market Rents during each fiscal year. In Oakland, landlords are restricted from charging more than $936 per month for a studio apartment, $1132 per month for a one-bedroom unit, $1420 per month for a two-bedroom, $1947 for a three-bedroom, and $2325 for a four-bedroom unit. Despite these legal limits, tenants still charge that many landlords demand extra cash under the table to avoid the restrictions.

Each Public Housing Authority in the United States is allowed to conduct its own survey to determine the Fair Market Rents in their areas in order to regulate the landlords. A search of the different PHAs unearthed some astounding differences. Renters are allowed to transfer their vouchers from one PHA to the PHA of their choice, and landlords are restricted from charging more than the Fair Market Rents in each area where the PHA is located.

Oakland restricts landlords from charging more than $936 per month for a studio apartment. To compare with other regions, landlords in Public Housing Authorities may charge $213 a month for a studio in Vieques, Puerto Rico; $665 for a studio in Chicago; $606 for a studio in Las Vegas; $463 for a studio in New Orleans; $488 for a studio in Detroit; $509 for a studio in the Virgin Islands on St. Croix; $565 for a studio in Anchorage, Alaska; $458 for a studio in Memphis; $848 for a studio in New York City; $760 for a studio in Guam; $642 for a studio in Hawaii; $361 for a studio in San Juan, Puerto Rico; $406 for a studio in Little Rock; $573 for a studio in Minneapolis; $577 for a studio in Miami; and $913 a month for a studio in Washington, D.C.

Street Spirit, AFSC
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San Francisco  CA  94103-1401

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