Rental needs

July 05, 2005

LEGISLATION PENDING in Congress that would convert a popular federal rent-assistance program into a fixed grant program has public housing authorities around the country worried - and with good reason. Under the legislation, public housing agencies would be limited by caps in the number of poor people they could help, and unable to move thousands off waiting lists for subsidized housing into affordable apartments.

Given the nationwide shortage of affordable housing and other recent funding cuts to federal public housing programs, changes to the rent-assistance program known as Section 8 are sure to worsen the problem and force people to spend more on rent or live in substandard housing. This cannot be good for cities such as Baltimore that are trying to balance the housing needs of the poor with a real estate boom that is driving up the cost of housing. Some 14,000 families are on the city waiting list for federal rent vouchers. A $50 million grant the city recently received from the U.S. Department of Housing and Urban Development (HUD) to meet local housing needs should give the city some relief, but only in the short term.

The bill in Congress comes on the heels of three years of funding-formula changes in the Section 8 program that have exacerbated the housing crisis in communities around the country. According to the Council on Large Public Housing Authorities, an advocacy organization, housing agencies have been forced to make retroactive budget cuts, lower rent payments, cut the number of rent vouchers they distribute and freeze voucher waiting lists. Landlords who participated in the program are bailing out and no longer accepting the vouchers as payment. Investors have withdrawn from affordable-housing developments supported by the program.

New rules issued by HUD this year base annual funding on the number of vouchers used by housing authorities during a three-month period in the prior year. As a result, funding for this year was based on voucher usage rates from May 2004 to July 2004. Although Baltimore has been issuing increasing numbers of vouchers since 2000, only 10,375 vouchers will be funded from now on.

The voucher program has worked well for more than 30 years and has received high marks from the White House Office of Management and Budget. It has helped millions of low-income families live in affordable housing that meets federal living standards, and helped the federal government ease the national housing crisis by allowing housing authorities to use the private housing market.

The program is far from broken; lawmakers don't need to fix it.

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