HUD tweaks rent-subsidy formula to save local vouchers

29 families protected from cutbacks this year

Howard County

May 19, 2004|By Larry Carson | Larry Carson,SUN STAFF

Federal housing officials tweaked a contested rent-subsidy funding formula yesterday, easing fears among some Maryland officials who worried they would be forced to take housing vouchers away from more than 500 low-income families in Howard, Baltimore and Montgomery counties.

The change, announced by the Department of Housing and Urban Development late yesterday afternoon in an e-mail to local agencies, would provide enough money to enable Howard County to squeeze through the year without yanking vouchers, officials said. The effect on other agencies could not be immediately determined.

"They have acceded to the pressure in cutting back on families, but they cut administrative fees," Leonard S. Vaughan, Howard County housing administrator, told the county's Housing Commission during a meeting last night. "It's a major relief in that it won't affect the current fiscal year. Our concern is the future."

Baltimore County officials said last week that they feared that up to 309 families could lose their federal rent subsidies under a funding change announced April 22, but retro- active to January. Howard County worried that 29 families might lose their rent vouchers, and Montgomery officials said 200 families were at risk there.

Officials at HUD, which funds the federal Section 8 voucher program, are trying to cap its costs, which are growing at 10 percent a year, according to Michael Liu, assistant secretary for public and Indian housing.

To do that, HUD told local housing agencies last month that they will get the same amount of money as in August 2003. Yesterday's e-mail revealed an inflation factor that is to be added to the formula that will ease the burden on local agencies, but not increase the total $14.5 billion voucher program.

HUD Secretary Alphonso Jackson, who is to testify before a House committee tomorrow, released a statement saying, "We are trying to apply the cap in a fair and equitable fashion, and we believe this plan of action achieves just that."

Cuts criticized

Housing advocates and some members of Congress have accused the Bush administration of trying to curb the program's expenses at the risk of leaving poor people without rent money. Maryland Sen. Paul S. Sarbanes, a Democrat, said last week that Congress appropriated an extra $1 billion to ensure that didn't happen, but that HUD has inaccurately interpreted congressional language to implement the cap.

For Howard, yesterday's announcement means the vouchers will be worth $739 per unit each month instead of $676 - a difference of $529,000 for the year. But the e-mail also told Howard officials that the administrative fee of $70 a month per unit that the county gets will be cut by $10, costing the local government $84,000.

Vaughan told the commission that Howard has nearly no cash reserves, meaning severe belt-tightening may be required, though he and commission Chairman Kevin J. Kelehan vowed they would not ease the program's standards.

Making it work

"We've got to find some way of making it work," Vaughan said. "This program provides too much benefit to the community for us not to administer it properly," he added, to Kelehan's agreement.

Liu has said that a handful of the nation's 2,500 housing agencies would not have enough money to pay for some housing vouchers under the April 22 formula.

Turmoil and worry

But with local housing agencies all over the nation in turmoil and worrying that they may have to reclaim existing vouchers for the first time in the program's 30-year history, housing advocates and elected officials - including both of Maryland's senators - are pressuring HUD to relent.

Section 8 is a federal rent-subsidy program serving 1.9 million people nationwide that allows poor families to pay no more than 30 percent of their income for shelter, with the government paying the rest. Some elderly and disabled people pay nothing.

The Associated Press contributed to this article.

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