Section 8 Housing Choice Voucher Program Budget-Based Renewal Leaves Agencies with Shortfa

NAHRO: Section 8 Housing Choice Voucher Program Budget-Based Renewal Policy Leaves Agencies with $93 Million Shortfall

10/11/2004 12:01:00 PM

To: National Desk, Housing Reporter

Contact: Liz Hennessy of the National Association of Housing and Redevelopment Officials, 202-289-3500 ext. 280 or 202-841-6335 (cell), lhennessy [at] nahro.org, Web: http://www.nahro.org

WASHINGTON, Oct. 11 /U.S. Newswire/ -- NAHRO analysis of FY 2004 changes in federal funding for the renewal of the Section 8 Housing Choice Voucher (HCV) program indicates that nearly 500 housing agencies nationwide will be left with a shortfall of as much as $93 million for this year. The shortfall is estimated to affect housing assistance for 52,000 families.

The HCV program helps nearly 2 million American families find affordable housing on the private market. In April 2004, almost three months after the program's FY 2004 funding bill was signed into law, the Department of Housing and Urban Development (HUD) issued a notice implementing a new method of funding the program capping Housing Assistance Payment (HAP) costs as of August 2003, adjusted for inflation, in place of the previous method that was based on the actual cost of housing assistance for Section 8 voucher-holders. To address funding needs caused by the new policy, HUD issued two replenishments to housing authority budgets: $150 million in May, and $157 million in late August. NAHRO's analysis includes these replenishments and demonstrates that HUD's budget-based renewal formula policy distributed limited Section 8 funding inefficiently. The analysis also shows that the change in policy could leave low-income families at risk of losing some or all of their housing assistance.

In June, NAHRO surveyed agencies whose budgets were cut because of the changes in the renewal policy. At that time, agencies had already implemented cuts in their programs. This analysis finds that after the two funding replenishments no change in the percentage of agencies making program cuts has occurred. Actions taken have included:

-- Terminating vouchers for currently-assisted families (4 percent of agencies surveyed);

-- Recalling vouchers from families searching for housing with recently-promised housing vouchers (10 percent of agencies);

-- Banning reissuance of turnover vouchers (vouchers returned to an agency once a family has left assistance) (27 percent of agencies); and

-- Increasing households' rents by an average of 9 percent, effectively pricing families out of the communities of opportunity for which the program was designed (approximately 27 percent of agencies).

NAHRO's full analysis, including a state-by-state breakdown of agencies affected, is available on the Web at http://www.nahro.org/pressroom/2004/200410renewalstudy.pdf . Contact Liz Hennessy for more information.

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The National Association of Housing and Redevelopment Officials (NAHRO), established in 1933, is a membership organization of 18,000 housing and community development agencies and professionals throughout the United States whose mission is to create affordable housing and safe, viable communities that enhance the quality of life for all Americans, especially those of low- and moderate-income. NAHRO's membership administers more than 3 million housing units for 7.6 million people.