Overhauling Subsidized Plans on Home Front
Proposal by Bush Would Limit U.S. Role in Housing Programs,
Hurt Poor Households

by Susanne Browne and Catherine Bishop

While the rebuilding of Baghdad, Iraq, plays out on international media, the Bush administration is proposing big changes at home, as well.

One such overhaul is to Section 8 of the U.S. Housing Act of 1937, 42 U.S.C. 1437(f), a subsidized housing program, and another to a Department of Housing and Urban Development public-housing program called Homeownership and Opportunities for People Everywhere, or HOPE VI.

HUD provides funding for Section 8 rent vouchers to low-income tenants to assist them in paying their rent. Section 8 tenants typically pay 30 percent of their income on rent, and HUD pays the balance. Voucher levels are based on a number of factors, including the HUD-established fair market rent in the area. The HOPE VI program provides revitalization grants for public-housing developments.

In the past, President Bush publicly praised HOPE VI's efforts. Indeed, most conservatives lauded HOPE VI while liberals decried it because it reduced public-housing stock. Still, all that was before November and the GOP drubbing of the Democrats in the elections.

Now, the conservatives are flexing their muscle and looking to further restructure government Bush's 2004 budget would phase out HOPE VI, not provide for revitalizing public housing and, worse, convert the Section 8 voucher program into state-administered block grants.

Housing vouchers are the leading way by which the federal government provides housing assistance. It certainly is not a perfect system, and funding is inadequate for the need.

The 2.1 million vouchers issued annually - 260,000 in California - do not come close to assisting the 5 million low-income households HUD has identified as living in severely substandard housing or paying more than 50 percent of their income on rent.

In Los Angeles County, 107,000 families are on the waiting list for Section 8 funds. This includes 17,000 elderly and 8,000 disabled families. In the city of Los Angeles, 49,000 families are on the Section 8 waiting list. Eleven thousand of those families are elderly.

Once a family's name rises to the top of the waiting list to receive a voucher, the battle has just begun, as the family must find a landlord who will accept Section 8 and charges a reasonable rent for the area.

Local housing authorities receive voucher funding based on actual costs.

This means that, within constraints, local housing authorities in the state can react to the general trend of increasing rents, including the more dramatic recent acceleration in rents because of a severe shortage of affordable housing.

Between 1998 and 2003, the fair market rents on which voucher levels are based rose 44 percent in California and 25 percent nationwide. Under Bush's proposed block grants, funding levels would be adjusted yearly based on inflation, presumably the Consumer Price Index, which rose in contrast only 12 percent during the same time period.

If annual adjustments to block grants do not fully accommodate changes in voucher costs, states - especially those with high housing costs such as California - will have to cut the voucher program or contribute their own funds to maintain the program at existing levels.

The more likely scenario, of course, is that states will impose cuts, thereby eliminating or reducing assistance to the poorest of the poor.

Mel Martinez, secretary of HUD, in congressional testimony given in March, said that block-granting the voucher program would eliminate the problem of some housing authorities failing to use all of their voucher funds. Martinez testified that it also would remedy the lag time between changes in market rents and voucher payment levels.

According to the Center on Budget and Policy Priorities, both of these claims are misleading.

First, block-granting the voucher program is not necessary to avoid unspent voucher funds. The 2003 Appropriations Act addressed that problem, and Congress has changed the formula to only fund housing authorities for vouchers they use.

Second, the cost-base structure of the voucher program provides flexibility for local housing authorities to respond to changes in local housing rents. Block grants would work to severely decrease this flexibility, especially in California.

The administration's proposal isn't about fixing and fine-tuning. It is about reducing the federal commitment to low-income housing because the administration is operating on the false perception that people on Section 8, like others receiving public assistance, aren't "personally responsible."

That is not so.

Voucher holders include the elderly and disabled and heads of households working at low-wage jobs with no health insurance. Some are the people washing our cars, cleaning our offices or serving our food. They are retired teachers getting by on small pensions and Social Security, and others are veterans of our previous wars.

Surely they deserve the best we can do here on the home front, not the least.

Susanne Browne is a staff attorney at the Legal Aid Foundation of Los Angeles. Catherine Bishop is a staff attorney at the National Housing Law Project in Oakland.

This commentary originally ran in the April 29, 2003 edition of the Daily Journal.

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