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Sequester Uncertainty Surrounds Section 8 Housing Program

Last week, several media outlets and advocacy groups began circulating the same sad story: Because of sequestration, 60 low-income families in Dane County, Wis., were soon to be homeless.

But the truth is more complicated.

The story began with a blog post written in February by Dane County Housing Authority Executive Director Rob Dicke.

At the time, he made what he calls a quick back-of-the-envelope calculation that a 6 percent funding cut — the amount he expected to lose due to the automatic budget cuts — was equal to 60 housing choice vouchers, which subsidize rent in private homes for low-income families. (As part of the federal Section 8 program, tenants pay 30 percent of their income toward housing, and public housing agencies pay the rest using federal dollars.)

But once sequestration was implemented beginning March 1, Dicke got the budget authority to reallocate leftover funding, and he didn't have to cut vouchers for any of the 1,022 low-income families in Dane County participating in the program.

Still, things are tight. Dicke says his organization faces a $50,000 shortfall for the month of April, but should be able to cover the expense with reserve funds.

'Long And Complicated Story'

For public housing agencies, sequestration is just another nick in a series of cuts. In January 2012, HUD cut funding to help administer the voucher program by 25 percent. So even before sequestration, Dicke says he had to lay off three staff members in a 12-person office, shut down a program aimed at helping people move on to home ownership, and decrease the amount of rent that voucher assistance would cover. That, in turn, has discouraged some landlords from participating in the program and made it harder for low-income families to find qualifying housing, Dicke says.

Now, he has to stop issuing vouchers to some new tenants as other families move off the program. But since future funding is based in part on actual expenditures, any cuts today will cause his agency to further contract in the future, Dicke explains.

"HUD has a new forecasting spreadsheet that I can use to predict future funding based on past expenditures," he wrote in an email on Monday. "Once I learn how to use it (it is very complicated) I may have a better idea of how we will be sitting."

The same story is playing out in public housing agencies around the country, according to Douglas Rice, senior policy analyst at the Center on Budget and Policy Priorities. Last week he authored a report that found 140,000 low-income families could be denied access to rental assistance by early next year because of the sequester.

"The severity of the shortfall in voucher renewal funding caused by sequestration is unprecedented in the history of the program," Rice wrote in the report. "Facing such large shortfalls, agencies will be forced to take steps to reduce program costs quickly, even as they spend down reserves."

A Few Local Stories

In Rochester, N.Y., the local housing authority plans to cut 600 vouchers through attrition, Rochester YNN reported last week. The Brattleboro Housing Authority in Vermont will reduce the amount of rent it will subsidize below fair market value, according to the Brattleboro Reformer.

In Chico, Calif., the Butte County Housing Authority may have to cut about 15 vouchers a month. "It's a long and complicated story. It doesn't just start with sequestration," executive director Ed Mayer told the Chico Enterprise Record. "This sequestration seems to be the straw that breaks the camel's back."

Furthermore, Rice anticipates that a share of public housing agencies might not be able to close their budget gaps through attrition alone — they might also need to terminate housing contracts that are already in place.

So one month into sequestration, the 60 low-income families in Dane County, Wis., still have homes. But the program faces a more uncertain future.

"Because of the investments that Congress has made through HUD programs, there has been a significant reduction in chronic homelessness in recent years," Rice said. "We're at real risk of just losing the progress we've made on that front."

Kara Brandeisky is an intern on NPR's Washington Desk.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

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