Home Sweet (Affordable) Home: Reforms Proposed for Section 8
SECTION8
Keene Sentinel
Jessica Arriens
Boston University Washington News Service
24 April 2007
WASHINGTON, April 24—Since 1937, the pursuit of affordable homes for low-income families has been a continually evolving federal policy, fraught with both complaints and compliments.
New legislation, recently introduced in the House, aims at delivering the next evolutionary step by reforming the nation’s largest low-income housing assistance program, commonly called Section 8. It is a program deemed especially vital in New Hampshire—a state mired in an affordable housing crisis.
Established in the 1970s, Section 8 provides vouchers to more than 2 million families annually, which they can use to assist with the rental of privately owned houses or apartments. Eligible families are required to pay about 30 percent of their monthly income for rent and utilities. The difference between what each family pays for rent and the actual cost is covered by the Section 8 voucher.
The program is praised for its ability to lift families out of homelessness, to provide economic security, to give families a choice in housing—allowing them to live near better jobs or schools—and the way it prevents low-income residents from being shunted to one area of a community.
But the program has had its share of problems, too. Housing agencies, advocacy groups, members of Congress and even the U.S. Department of Housing and Urban Development have grumbled about the inflexibility of its regulations, its convoluted formula for calculating funding and, not least of all, its need for more money.
More than 9,000 Section 8 vouchers are used in New Hampshire, and many thousands more families linger on waiting lists, according to Dean Christon, deputy director of the New Hampshire Housing Finance Authority, the statewide agency that implements Section 8. But the program is just one solution to the affordable housing problem the state faces.
“Section 8 is very needed,” said Jane Law, communications director for the New Hampshire Workforce Housing Council. “It is a program that can have almost never enough money thrown at it. But we also need additional affordable subsidized housing units.”
“There’s a lot of answers,” she said. “It’s a complex problem.”
Granite State Housing Crisis
New Hampshire’s affordable housing problem is rooted deeply in a variety of issues—zoning restrictions, population changes, rising rents. And the problem does not just affect low-income families.
The price of real estate is “out of the range of most people,” said Susan Thielen, coordinator of Heading for Home, the Monadnock region’s workforce housing coalition. “I’m talking about any range of income.”
With the federal guidelines saying that a family should pay no more than 30 percent of its income for rent, finding affordable housing is impossible for many people. According to Thielen, the median rent for a two-bedroom apartment in the region is $1,048, which means a person would have to earn more than $42,000 a year to afford the rent.
“Firemen, policemen, teachers—the real core of the community, the people we depend on—are just not earning that kind of money,” Thielen said.
The effects of a housing shortage add up in a multitude of ways.. Workers may be forced to commute long distances, neglecting community activities while harming roads and the environment. Others may leave the state if they are forced to turn down jobs in areas where rents are not affordable.
“New Hampshire needs another good 20,000-30,000 of almost any kind of housing, split between lower-income housing and housing for anyone,” said James Stitham, housing compliance officer with Southwestern Community Services, a Monadnock region organization that provides a variety of social services.
Without enough growth in the housing market, rents on the few available units rise far above what working families can afford, especially for those in entry-level positions, Stitham said. Thielen also attributed rising prices to increases in required minimum lot sizes and high land costs.
In this competitive market, Stitham and others agree, Section 8 is a vital asset for low-income families.
For a rental unit to qualify for Section 8 it must meet safety and hygiene standards and its rent must not be more than the government-set maximum allowed for a property with that number of bedrooms. Maximum rents vary from area to area based on the rental market in the area.
Vouchers are targeted to the neediest families—those whose incomes are 50 to 80 percent of an area’s median income. But because of intense demand and limited funds, eligibility does not guarantee that a family will receive a voucher. The New Hampshire Housing Finance Authority has more than 5,000 families on its waiting list, and most will wait three to four years before something opens up, Christon said.
In some parts of the country, where the wait stretches to 10 years, housing authorities have closed their waiting lists. In New Hampshire, Christon said, “we always keep ours open. But frankly, it’s a very long wait.”
In the meantime, families are forced to live in poor-quality housing, pay more than half their income for rent, apply for local welfare or even become homeless.
The Section 8 lament
The waiting lists are one manifestation of a widely repeated problem with Section 8—the shortage of funds, which prevent all eligible families from receiving vouchers.
According to Donna White, a Department of Housing and Urban Development spokeswoman, Section 8 has a $15.9 billion budget for fiscal 2007, consuming nearly half of HUD’s total $33.5 billion budget. The department’s budget request for 2008 is $36 billion, including $16 billion for Section 8, which White said would allow more vouchers to be used by more people.
The other oft-cited criticism of the Section 8 program is that it is inflexible and confusing, which even the department admits. “It has become very bureaucratic, very complex,” White said.
An abundance of regulations and formulas sprout from Section 8, but this is to be expected from such an enormous program, said Barbara Sard, director of housing policy at the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.
What has been a convoluted mess, Sard said, is the way Section 8 has been funded because of “arbitrary, ill-considered changes that HUD and Congress made in the program since 2004.”
In 2004, HUD announced that it was allocating Section 8 funds to housing agencies based on the amount they spent during May, June and July of the previous year. Since then, a year’s worth of funding has been based off a single snapshot, causing some agencies to receive “more funding than they need, more funding then they could use,” while others lack adequate funds, Sard said.
To fix this funding method and streamline the program, Rep. Maxine Waters, D-Calif., introduced in late March the Section 8 Voucher Reform Act, currently awaiting debate in the House Financial Services Committee.
“[The bill] is a very good first step,” said Christon of the New Hampshire Housing Finance Authority. “It makes [Section 8] a little more rational, more efficient.”
The bill would base Section 8 funding on a year’s worth of spending, as well as improve portability of Section 8 vouchers and give more flexibility to local housing authorities in allocating their vouchers and conducting safety inspections of housing units.
Both Waters and Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said the legislation would clean up Section 8 and has a strong chance of passing.
The Housing Balance
According to Sard, an efficient housing program needs construction and preservation components, plus rent and operating subsidies—a balance unseen in current federal policy.
“Right now, we have an uncoordinated, sort of crazy-quilt pattern,” she said.
The low-income housing tax credit, which directly subsidizes housing development costs, is currently the only housing construction program the federal government pays for. But because money is allocated to states based on population, Sard said, in places like New Hampshire, “where there’s a pretty small population but a real cost crunch,” the program is under-funded and therefore ineffective.
Another proposal being talked about in Congress is the creation of a national housing trust fund, which would provide money for construction of new housing and rehabilitation of existing housing.
Frank introduced legislation on March 9, currently in committee, that would use funds from Fannie Mae and Freddie Mac, congressionally chartered mortgage finance companies, to add close to $1 billion to the proposed trust fund.
“We also need some programs that construct affordable housing,” Frank said, since using Section 8 alone merely drives up prices by increasing demand for housing without adding to supply.
HUD spokeswoman White said that the department is not heading in the direction of funding housing construction programs and that the additional costs of these programs makes them unlikely.
So local housing authorities are left to find a desired balance on their own, while continuing to implement the contentious Section 8.
“We do wish HUD would renew its efforts to create new units of housing,” said Southwestern Community Services’ Stitham. “With, of course, Section 8 on the side.”
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