Federal Tenant-Based Rental Assistance Looks at Tightening Belt
Tenant-Based Rental Assistance, one of the largest government-subsidized social programs, could face major reconstructive surgery in the
very near future. The rental assistance program, managed by the U.S. Department of Housing and Urban Development (HUD) and also known as
"Section 8" (of the United States Housing Act of 1937), serves nearly 2 million families in America-generally the poor, elderly and/or
disabled-and costs about $15 billion annually.
IHFA is one of four rental assistance providers in the state, working on HUD's behalf. Southwest Idaho Cooperative Housing Authority, Boise City/Ada County
Housing Authority and the Housing Authority of the City of Pocatello are the others. (See pages 6-7 for a comparison look at these providers.)
Two-thirds of HUD's current budget goes toward rental assistance. Over the past four years, the total funding requirements for the rental assistance program
have increased by 41 percent. The 2004 HUD budget enacted by Congress required that the housing agency reign in spending.
"Congress is the appropriator and the authorizer of funds and HUD can spend only the money that Congress allocates to the Department," said HUD Secretary
Alphonso Jackson in a July 26 memo to public housing agencies (PHAs) nationwide. "The small problems [in the voucher program] of the past have compounded
in recent years, causing unprecedented and unsustainable budget expansion."
The rental assistance program faces a potential 30 percent budget cut over the next five years and proposed changes that amount to deregulation, removing
some of the federal rules and standards and giving the power to create those guidelines to the states. The idea of having states or PHAs decide where
and how to use the rental assistance funding appears to be a good fiscal move to some, but it's been met with substantial resistance from three PHAs in Idaho.
"We are reevaluating our program to determine where we can make the cuts in a way that has as little negative impact as possible," said Deanna Watson, executive
director of Boise City/Ada County Housing Authority. BCACHA administers approximately 2,000 tenant-based rental vouchers, with 2,400 people on the waiting list.
HUD says the same number of people still can be served by rewriting the rules, lifting restrictions and making the system more efficient.
"Today families must wait years to receive a voucher," said HUD Assistant Secretary Michael Liu. "Our reforms are intended to create innovative solutions for
those Americans in need of housing assistance. Under the new Flexible Voucher Program, PHAs will continue to receive direct funding from HUD to administer
the program, but with added flexibility and less 'red tape' to encourage housing authorities to manage effective programs." (See Budget, Regulatory Changes
article, p. 4).
Many PHAs nationwide aren't seeing it that way. To them, the alternatives seem to be to cut people from the program or cut the amount of rental assistance
given to each recipient. Either way, said Julie Williams, IHFA vice president of Community Housing Services, "the 2,300 PHAs across the country are having
to make some quick adjustments to recent funding changes and will be carefully considering how they'll shift to the Flexible Voucher Program if Congress
approves HUD's budget this fall."
The fear among social policy advocates is that the proposed funding will result in recipients having to drop out of school to work full time, others having to
crowd in with family and friends, or the break-up of families as parents send children to stay with relatives. Another possibility is homelessness. The Center
for Budget and Policy Priorities (a nonpartisan research organization) reports that only two ways exist to deal with the budget cuts: eliminate families from
the program or increase the amount they have to contribute toward rent.
The outcry is already being heard: Housing authorities are scrambling to keep people in their homes and off the street. Those in public service are being
inundated with complaints from outraged citizens, trying to schedule meetings with HUD, and writing letters to policy makers and anyone who will listen.
In Idaho, a total of more than 6,500 tenant-based rental assistance vouchers are administered, but more than 7,200 are on the respective waiting lists to get
assistance. Another 4,000 are receiving project-based assistance, with a waiting list for that program as well. The time and date of application for assistance
determines placement on the waiting list, but all except SICHA have preferences that could alter that placement. The elderly, terminally ill, or a single
parent with young children are all conditions that can impact the waiting list. Waiting time varies widely among the four providers but can extend to three years.
Budget, Regulatory Changes on the Horizon
When the U.S. Department of Housing and Urban Development announced its proposed 2005 budget, it included reform of the nation's rental assistance
voucher program, causing shaking up housing administrators from coast to coast.
HUD's intention is to allow public housing agencies more flexibility in managing their programs, but states are concerned with the proposed plan.
"With their new budget came regulatory - and retroactive - changes," said Julie Williams, IHFA's vice president of Community Housing Services. "In addition
to the major programmatic changes they propose for 2005, they also instituted changes in arrears in how they reimburse housing authorities.
"In the past, participating public housing authorities across the country have received a set number of vouchers from HUD and were guaranteed funding for
those vouchers based on certain rent standards. Under the new Consolidated Appropriations Act enacted in January, HUD will give each housing authority
funding based on its costs from last August, adjusted somewhat for inflation. There is no guarantee of additional funding if increases in rent outpace
the inflationary adjustment," said Williams.
HUD's 2005 budget includes a proposal to change the Section 8 voucher program, not sustainable at current growth levels of 30 percent, to a system of
block grants called the Flexible Voucher Program. While the Section 8 program may need improvements, a block grant system would force management onto
states who may not have the capacity or ability to manage it, Williams said.
More than 10,000 people in Idaho receive Section 8 assistance. Presently, 75 percent of those recipients must have an income at or below 30 percent
of the area's median income.
According to the National Association of Housing and Redevelopment Officials, over 900 public housing authorities in 47 states will not have enough
money from HUD to cover voucher costs this year because of the restrictive changes.
"IHFA is fortunate in that it appears that our 2004 obligations will be funded," Williams said. "But other agencies and housing authorities have
to be able to turn on a dime because they just don't have any options. They'll have to either drop people from the program or reduce the voucher
amounts, and either way participants are unsuspecting and will be affected."
Deanna Watson, executive director of Boise City Ada County Housing Authority is working with other housing authorities and industry groups to
encourage HUD to reconsider the change. "We're going to reduce the amount of the vouchers on our larger units, but we hope to keep everyone housed,"
Watson said.
Across the state, the Housing Authority of the City of Pocatello is seeing a similar fate. Executive Director Don Thompson estimates that the
budget impact of HUD's cuts will mean that the HACP will have to reduce the number of families it serves by 15-20. He has not yet made any
policy changes in response to the cuts, preferring instead to look elsewhere to find savings that would keep people from being displaced from their homes.
Looking ahead, the block grant idea may have some merit but, again, affects groups differently. "It is designed to deregulate the Housing
Choice Voucher Program, allowing states to create their own policy and administer the programs accordingly," said Williams. "But some states
and local housing authorities would need much more time and more resources to get equipped for something like this."
HUD's proposed 2005 budget, including the Flexible Voucher Program, will be considered when Congress convenes this fall to vote on appropriations.
Threshold Crossing Development Adds Alternative to Section 8
As cuts to Section 8 funding force program administrators to either drop participants from the program or reduce the amount of rental assistance
given to each recipient, Idaho families will be searching for options.
At past funding levels, more than 6,500 tenant vouchers have been administered in Idaho and more than 7,200 names are on waiting lists. The gap
between supply and demand will be even more difficult to bridge when funding is reduced. But steadily, unit by unit, housing organizations in Idaho
are making a difference for families who qualify for but do not hold Section 8 vouchers.
One unique development opened in Boise in July. Threshold Crossing offers supportive transitional housing for homeless and at-risk families with
children. Owned and maintained by Neighborhood Housing Services of Boise, the three two-story town homes each have three bedrooms and two baths.
Funding for the $330,000 development was provided through the City of Boise HOME program, Neighborhood Reinvestment Corporation, Idaho Community
Reinvestment Corporation and the U.S. Department of Housing and Urban Development, Supportive Housing Program. SHP funds are administered by the
Boise City/Ada County Housing Authority. Funding sources allow rent paid to be no greater than 30 percent of the household's monthly gross income.
In order to make housing available at 30 percent of household income, the development must be heavily subsidized in some way, Boise NHS Executive
Director Tom Lay said. Though innovative funding sources can sometimes be secured, Section 8 assistance has been utilized in many of NHS' 310 rental units in Idaho.
"Section 8 vouchers provide critical support for our Homeward Bound program for homeless and at-risk families. It is disconcerting that this program
could be reduced by any great amount," Lay said. "We are waiting to see what changes may come about. Section 8 reductions would have a detrimental
effect on this difficult-to-serve population."
NHS of Boise realized families could be well on their way to successful completion of the Homeward Bound program in the timeframe that they could be
waiting for Section 8 assistance, Lay said. That idea provided the momentum behind Threshold Crossing.
Boise Mayor David Bieter was glad to see a development that is part of the solution for families who "might otherwise be standing in line for Section 8 vouchers."
"I couldn't be more pleased with how this fits together with so many other things we're trying to accomplish in this city," Bieter added.
The staff of NHS' Homeward Bound program will provide case-management services to Threshold Crossing families to help them achieve self-sufficiency.
NHS owns and manages 30 single-family homes throughout Boise as affordable rentals for families in the Homeward Bound program. More than 80 percent of
the families in the Homeward Bound program become self-sufficient and more than 20 percent become home owners.
Section 8: IHFA's Program
IHFA administers the U.S. Department of Housing and Urban Development rental assistance program to 34 of Idaho's 44 counties, particularly in most
of the rural parts of the state. This Section 8 rental assistance, is designed to help renters find safe, sanitary and affordable housing by paying
some or all of the rental costs.
Last year, IHFA assisted more than 7,700 Idaho families through Section 8. In the tenant-based program, the subsidy is distributed to a tenant
who can use it to rent a unit. Generally, program participants pay 30 percent of their adjusted income toward rent and the voucher subsidizes the
balance. IHFA also administers a project-based portion of Section 8 in which a renter selects a subsidized apartment. Between the two programs,
IHFA administered $32.7 million in subsidy in 2003.
The project-based program administers 121 contracts (45 of which IHFA also carries the mortgage) and directs subsidy to 3,824 units statewide.
IHFA also oversees compliance with program requirements and performs annual inspections. "We work with the property owner and go over any necessary
upgrades or maintenance the property may need, " said IHFA Housing Compliance Senior Manager Bill Ward.
Although HUD's proposed changes wouldn't affect Ward's program as strongly or immediately as it would IHFA's tenant-based program, it may still
have a domino effect on the rental-unit program. "The voucher program accounts for 51 percent of the HUD operating budget, so when cuts are made
on the tenant side, it filters throughout the program," he said. "People could lose their vouchers due to the budget changes and then come to the
project-based program to find housing."
Each of IHFA's four branch offices - in Coeur d'Alene, Lewiston, Twin Falls and Idaho Falls - maintains a waiting list. Although more than 3,150
active Section 8 participants are in IHFA's tenant-based program, more than 4,100 additional people are on waiting lists, which vary by region from
10 months to more than two years, according to Lisa Stevens, manager of IHFA's Rental Assistance Programs.
The length of time a family is on the waiting list is determined by the preference for which they qualify, the date and time of their application
and voucher availability. Many housing authorities also use preferences to categorize applicants and prioritize assistance. A preference is the
existence of a condition or situation. Persons without a preference are rarely reached due to the overwhelming demand for rental assistance.
"IHFA's highest preference is documented terminal illness," said Stevens. "Family preference is another - households with children and/or an elderly
or disabled adult.
In addition to income guidelines, a Section 8 recipient must meet certain eligibility requirements. Disqualifying factors may include owing money to
IHFA or another housing authority; a record of committing fraud while participating in a federal housing program; having been evicted from public
housing; or a record of committing drug-related or violent criminal acts.
Once applicants reach the top of the waiting list, they are issued a voucher and begin their search for a rental property. Almost any kind of safe
and sanitary housing qualifies - apartments, single-family homes and mobile homes.
In turn, landlords fill vacancies and receive IHFA's portion of the participant's rent. A landlord is not obligated to accept a voucher holder.
"The landlord's responsibilities are straightforward - they are required to make any necessary repairs, comply with fair housing laws, allow
inspections of the units, and comply with the terms of the lease," added Stevens. Currently, 1,542 landlords participate in the program.
IHFA offers two programs encouraging participants to move from renting to owning a home and becoming assistance-free altogether. One is the Voucher
Homeownership Program.
Launched statewide earlier this year, the voucher homeownership program is specifically designed to help the disabled own their own homes. The
level of mortgage assistance corresponds to the level of Section 8 rental assistance received. Five families have closed on their homes to date.
The other is IHFA's Family Self-Sufficiency Program, which helps people eliminate the need for assistance through education, job training, and
career counseling. Since the program started in 1995, nearly 800 Idaho families have enrolled , 175 have completed it, and 81 have become home owners.
Idaho's Other Section 8 Providers Feel the Cut
IHFA is one of four providers of Section 8 rental assistance in Idaho. Here are reactions to HUD's proposed budget cuts from the other three:
Boise City/Ada County Housing Authority
BCACHA issues about 2,000 vouchers, and also has a project-based program that provides for another 240 families. Already with 2,400 people on their
waiting list, which ranges from six months to three years, they receive about 140 new applications per month.
In response to HUD's budget proposal, Deanna Watson, Executive Director of BCACHA, issued a statement, which began with the following: "We need to
inform you of some bad news regarding the financial support for the Section 8 rental assistance program…"
Watson speaks for each of the Section 8 providers in Idaho with that sentiment.
HUD could bow to public and political pressure and change its mind, but none of the potentially affected housing organizations are willing to bank
on it. "We can't afford to think in those terms," said Julie Williams, IHFA's vice president of Community Housing Services. "No business can afford
to spend more money than it's bringing in, and that's what could happen."
Watson and BCACHA revised the per-unit voucher amounts for 4-, 5- and 6-bedroom units, resulting in about a $100 savings per unit. "We will reduce
the assistance, but at least we'll keep them housed," said Watson. BCACHA also will no longer pay for the overlap between two units when a participant
moves, and no longer issues new Ada County vouchers for people coming in to the area.
Watson said that if the same rules apply in the next budget year, her organization will have few options. "We can reduce the dollar amount of vouchers,
or reduce the number of people on vouchers by not filling the spots when they vacate," she explained. Doing either will create an uproar, but there
are no miracle cures, she added.
Housing Authority of the City of Pocatello
Don Thompson, executive director of the HACP, administers 560 Section 8 housing choice vouchers, and has more than 500 applicants on the waiting list.
Thompson said that a number of factors negatively affect his budget: Congress changed the rules and appropriated less funding to meet program needs,
but didn't change the targeting requirements or portability rules (transferring vouchers when a voucher-holder relocates).
The targeting rule requires that 75 percent of the vouchers be used for those at or below 30 percent of the area median income. "This requirement increases
the average HAP (Housing Assistance Payment) and reduces the number of families we are able to assist," explained Thompson.
The portability standard especially affects a Section 8 administrator like Pocatello, where the cost of housing is miniscule compared to most places
where a voucher-holder might relocate.
Thompson has not yet made any policy changes, preferring to look elsewhere to find savings that would keep people from being displaced. "We'll see how
far we can stretch our budget," he explained.
Southwestern Idaho Cooperative Housing Authority
SICHA administers 852 vouchers, with 147 people on the waiting list. David Patten, executive director, said that "we know that we will not have
enough HAP money to meet our current needs. We will be forced to step away from those people that need the help the most."
Patten said his organization has already implemented some fiscal policies to curtail spending, but that SICHA is "not sure what else we can do at this time."
Comparison Chart of Idaho's Section 8 Providers
# of Vouchers
Waiting List
Waiting List Time
Enrollment Period
Preferences
IHFA T-B
3,143
4,149
10-25 months
Open Enrollment Continuously (as long
as person doesn't owe
IHFA money)
Terminal Illness
Family
CDA
757
1,324
25 months
LEW
611
605
19-22 months
TF
643
969
10-12 months
IF
1,132
1,251
20-24 months
IHFA P-B
3,824
Depends
SICHA
852
147
2-12 months
Varies depending on area
None
BCACHA T-B
2,000
2,400
3 years
Open Enrollment
Single parent w/child under 6
Working 20+ hrs/wk
Job Training
Domestic Violence Victim
BCACHA P-B
240
Depends
HACP
560
500+
3 years
Closed
Displaced by local gov. action
Legend
IHFA T-B - Idaho Housing and Finance Association, Tenant-Based Program
CDA - Coeur d'Alene branch office
LEW - Lewiston branch office
TF - Twin Falls branch office
IF - Idaho Falls branch office
IHFA P-B - Idaho Housing and Finance Association, Project-Based Program
SICHA - Southwestern Idaho Cooperative Housing Authority
BC/ACHA T-B - Boise City/Ada County Housing Authority, Tenant-Based Program
BCACHA P-B - Boise City/Ada County Housing Authority, Project-Based Program
HACP - Housing Authority of the City of Pocatello
