Shockwaves throughout the Country - The Section 8 Crisis

root - Posted on 22 February 2005

Section 8 Housing Voucher Programs In Crisis – Agencies’ Forced To Terminate existing Contracts

by Lynda Carson

Oakland CA--The Bush Administration has recently
shattered America's 30 year commitment to assist
low-income families in keeping a roof over their heads
through the HUD funded Section 8 housing voucher
programs that assist the disabled, elderly and the

Public Housing Agencies (PHAs) across the nation have
been informed that reimbursements from HUD for fiscal
year 2004 would not be based on actual current voucher
costs, and instead the payments would be based on the
cost of vouchers under lease on August 1, 2003,
adjusted for inflation.

The announcement sent shockwaves throughout the
country when the PHAs discovered that the regulatory
changes created huge budget shortfalls for fiscal year
2004, because they would only receive funding at the
fiscal year 2003 level.

These disastrous changes went into effect when
President Bush signed the current budget into law in
January, 2004. On April 22, HUD issued the guidelines
spelling out details of the new budget and, public
housing agencies across the nation have quickly fallen
into a crisis due to the funding shortfalls.


The crisis has already spread from coast to coast. New
York City faces a $55 million shortfall to fully fund
118,000 housing vouchers that are already in use for
fiscal year 2004.

A housing agency in Warrenton, Oregon, had to cut off
funding for 110 families during the first week of May,
2004. The agency is presently short of $59,000 or
more, and another 50 families could be cut from the
voucher programs by June 1.

The PHA of Alameda, California, sent out letters on
May 14, to 1,659 families and over 600 landlords to
inform them that the new regulations created a $3
million shortfall and that there may not be any rent
money for the month of June. Tenants and landlords are
being advised to use the security deposits to pay the
rent and to negotiate a way for the renters to repay
back the spent security deposits.

Massachusetts housing officials are set to mail
termination notices to about 650 tenants due to a
shortage of $550,000, and are working with state and
federal officials to come up with a solution to avoid
the termination of many housing vouchers in their

Minnesota has a voucher crisis and 2,000 families may
lose their assistance by June. According to John
Gutzmann, an executive of the St. Paul, PHA, his
agency alone faces a $30,000 shortfall or more.

The PHA of Fargo, North Dakota, has indicated that
they may have to terminate the housing vouchers for 46
out of 1,100 families from their existing housing
voucher programs.

Under the current Bush administration's budget
proposals, estimates already have been calculated by
the Center on Budget and Policy Priorities for fiscal
years 2005 through 2009, and it appears that the
current disaster taking place is only the tip of an

The proposed reductions in voucher subsidies for
fiscal year 2005 may result in a huge source of
homelessness locally and across the nation for years
ahead if the Bush administration's proposals are not

On a local level, during fiscal year 2005, it's
estimated that reductions to Berkeley's housing
voucher programs may result in the elimination of 223
families out of 1,841 families unless the city imposes
an annual rent increase of $1,545 spread across the
board to each of the families using the existing
housing vouchers.

Oakland faces a reduction of $17,380,757 for fiscal
year 2005 under the current budget proposals, and may
be forced to eliminate 1,303 families out of 10,754
families from their voucher programs or raise the
rents annually for all by as much as $1,582 per

For fiscal year 2005, San Francisco faces a reduction
by as much as $15,257,319, and may have to eliminate
876 families out of 7,229 families from it's voucher
programs or raise the rents on all families by as much
as $2,066 annually.

Outrage Across The Nation

From across the nation, Congressional Democrats claim
that thousands of families could be either forced to
pay more money out of their own pockets or lose their
housing, and according to House Minority Leader, Nancy
Pelosi, she says, "The Bush administration is breaking
a 30-year promise to help low-income families, the
elderly and the disabled to afford decent, safe

Democrats, housing activists, and advocacy groups
argue that HUD is misinterpreting the budget and that
voucher costs should be updated every three months so
that the cost-of-living increases may be assessed on a
continual basis.

In a statement released by the National Leased Housing
Association, it reads, "NLHA has voiced its opposition
to HUD’s interpretation of the FY04 formula and along
with other industry groups is pressing Congress to
affirm its intention that all vouchers in use (and
authorized) be funded at their current cost."

In a different statement released by the Consortium
for Citizens with Disabilities, it reads, "The Bush
Administration’s FY 2005 HUD Budget proposal calls for
deep cuts in the Section 8 Housing Choice Voucher
Program. The budget also would radically alter the
fundamental design of the program by converting it to
a block grant administered by Public Housing Agencies
(PHAs) for the benefit of higher income households.
The Consortium for Citizens with Disabilities Housing
Task Force (CCD Housing Task Force) is strongly
opposed to the Administrations budget proposal which
would cut more than $1 billion from current funding
levels. We are also strongly opposed to the
Administration’s ill-conceived proposal to convert the
program to the Flexible Voucher Program a
block-grant type approach which would eliminate many
of the critical protections people with disabilities
have under the current Section 8 program."

In response to the Bush administration's budget cuts,
Representative Barney Frank (D-MA) has introduced H.R.
4263 in an effort to resolve the situation, and he
already has 85 cosponsors or more supporting the bill.
The intention of the bill is to amend the FY04 VA-HUD
Appropriations Act, in order to fully fund the Section
8 vouchers as based upon the agency's per unit cost,
as originally intended by Congress.

Housing activists are calling on as many people as
possible to call their member of Congress at the
Capital Switchboard (toll free number) to insist that
the cuts to the housing vouchers are totally

Dial 1-888-818-6641 to reach your Congressional

Housing activists request that you;
1) Insist that HUD must withdraw the April 22 notice
changing the way housing vouchers are funded, because
the change is leading to funding cuts across the
2) Insist that HUD must fully fund all housing
vouchers in 2004, as Congress intended.
3) Insist that vouchers are based on their actual cost
according to the latest available data.



The Bush Administration's Proposals To Cut The Section
8 Programs By 40% Is Wreaking Havoc Across The Nation!

Officials Fight Planned Housing Aid Cuts

Los Angeles officials joined Wednesday in protesting
proposals to change the federal government's Section 8
housing program, which they said could result in
13,000 Los Angeles families being without homes.

At a City Hall rally, Hahn urged people to call on
Congress to resist efforts to change the Section 8
program, which provides rental vouchers to 44,000
households a year in the city and 2 million


Voucher Shortfall Concerns

It is estimated that more than one third of the 2,600
PHAs that administer Section 8 vouchers will face
funding shortfalls as a result of this policy change.
According to the CBPP, the national funding shortfall
for FY 2004 could total hundreds of millions of
dollars. PHAs have until July 15 to file appeals with

In a letter to HUD expressing concern over the new
policy, Gov. Tim Pawlenty (R-MN) estimated that 2,000
voucher holders could be terminated as early as June.
According to Gov. Mitt Romney (R-MA), a shortfall of
$550,000 in Massachusetts may lead to 600 voucher
holders losing their vouchers.


Alameda Ca, Housing Authority still short $700,000 for
June Section 8 rents.

In order to make the June Housing Assistance Payments
(HAP), the Housing Authority will have to use its own
reserves. In spite of this, the Housing Authority is
still about $700,000 short. As such, the Housing
Authority does not know if we can pay the full HAP on
June 1. We know that we can pay at least 50% and we
would commit to paying the balance within 90 to 120


Portland protests voucher shortfalls/see comments at
end of story.


Voucher Shortfalls In Vermont

May 21, 2004/Vermont

Sanders made this comment in reaction to proposed cuts
in Section 8 administration by HUD between 13 and 19
percent. For the Vermont State Housing Authority, the
cuts represent 14.4 percent of their Section 8
administration budget or $262,000.

The voucher cuts would have had a wide ranging effect.
Funding for the vouchers could have been cut by 12
percent, impacting more than 700 families in Vermont
and thousands more nationwide.

Vermont has almost 6,100 voucher holders, representing
almost 13,000 household members. The average voucher
payment nationwide is about $ 500. In Vermont, the
average voucher payment to landlords is $ 348, with
the average tenant contribution at $ 270.

Seventy percent of Vermont voucher holders have an
average income of $ 11,000 a year.

Roll Back The Rents, urges that the Public Housing
Agencies "roll back the rents on the landlords,"
rather than raise the rents on poor tenants where
funding shortfalls occur.

The funding shortfalls can be resolved by rolling back
the rents!

For Updates On The Section 8 Housing Voucher Crisis
And Other Tenant/Housing News, Join Roll Back the
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