[NYAPRS Enews] Lara: Proposals Threaten Housing Assistance for Low Income Families

[Harvey Rosenthal]

Proposals to Cut Domestic Programs Threaten Loss of Housing Assistance
for Thousands of Low-Income Families 
Current House and Senate Bills Would Fully Fund Vouchers

By David Lara <http://www.cbpp.org/about/index.cfm?fa=view&id=175>  and
Douglas Rice <http://www.cbpp.org/experts/index.cfm?fa=view&id=42>
Center on Budget and Policy Priorities November 29, 2010

 

Summary

The full House of Representatives and the Senate Committee on
Appropriations have approved bills that would provide adequate funding
in 2011 to renew all Housing Choice ("Section 8") vouchers used by
low-income families this year, according to Center analysis. If final
appropriations legislation were to fund the voucher program at the
midpoint between the House and Senate bills, it would provide $19.3
billion for housing vouchers, including $17 billion for voucher
renewals.

However, several proposals to reduce overall funding for nondefense
discretionary programs in the final appropriations bills for fiscal year
2011 threaten cuts in voucher funding that could cause tens of thousands
of low-income families to lose rental assistance. These threats are real
under each of the plausible scenarios in which Congress may complete
final funding legislation for the year:

*	If Congress approves an omnibus spending bill before the end of
December, overall funding for discretionary programs is likely to be
reduced to, or even somewhat below, the level proposed by Senators
Sessions and McCaskill earlier this year.[1]
<http://www.cbpp.org/cms/index.cfm?fa=view&id=3332&emailView=1#_ftn1>
If the reductions were imposed uniformly across nondefense discretionary
programs, funding for HUD programs would be cut by $800 million below
the midpoint of the House and Senate bills, including a cut of nearly
$300 million for housing voucher renewals. This would eliminate funding
for housing vouchers used by 38,000 low-income families. (A
state-by-state breakdown of cuts is in the appendix.)
*	If Congress is unable to reach agreement on an omnibus
appropriations bill, it could approve a resolution to continue to fund
federal agencies at 2010 levels through the remainder of the fiscal year
ending on September 30, 2011. Under such a "continuing resolution," cuts
to HUD programs, including the voucher program, would likely be deeper
than under an omnibus - housing vouchers for 100,000 low-income families
would not be funded - but not nearly as deep as they could be if
Congress delays final decisions until early next year (see below).
*	Finally, Congress could leave final decisions to the next
Congress by approving a temporary resolution to fund federal agencies at
2010 levels through early next year. Under this scenario, the new House
would almost certainly make major changes to most funding bills, and
likely would use as a starting point the September proposal by House
Speaker-elect John Boehner to cut overall funding for nondefense
discretionary programs by $101 billion, or 21 percent, below fiscal year
2010 funding levels adjusted for inflation.[2]
<http://www.cbpp.org/cms/index.cfm?fa=view&id=3332&emailView=1#_ftn2>
If such a deep cut were imposed uniformly across programs, the HUD
budget in the House and Senate bills would be slashed by nearly $10
billion, and funding for voucher renewals would be cut by $3.6 billion.
This would result in the elimination of housing vouchers for
approximately 475,000 low-income families in 2011, a loss of assistance
that would be unprecedented in the history of federal housing policy.

 

While some state and local housing agencies are able to mitigate the
impact of modest funding shortfalls on low-income families by drawing
down funding reserves to renew vouchers, many agencies have few
reserves. Moreover, the funding shortfalls that would exist under the
scenarios described above would be far from modest, unless Congress
exempted the voucher program from the deep cuts in nondefense programs.

If Congress does not protect the voucher program from cuts, then even
under the most favorable of the scenarios described above - an omnibus
appropriations bill at the Sessions-McCaskill level - many local housing
agencies would be forced to terminate rental assistance for thousands of
families, reduce further the number of families they assist through
program attrition, and take actions that raise rents sharply on
low-income tenants. Under the worst-case scenario - delaying a final HUD
funding bill until next year and imposing a 21 percent cut - it would be
impossible for agencies to avoid terminating rental assistance for
hundreds of thousands of low-income families.

 

The full renewal of housing vouchers in 2011 is critical to preventing
homelessness and other hardships, particularly at a time of high
unemployment and weak wage growth. More than 2 million low-income
families - nearly all of which include people who are children or
elderly or who have disabilities - use vouchers to rent modest housing
in the private market. Monthly housing costs for these families would
typically double or triple if their vouchers were terminated, placing
many at risk of losing their homes. Moreover, only a fraction of
eligible low-income families currently receive assistance due to funding
limitations - and the need for assistance is rising sharply. Since 2007,
when the economy began to weaken, the number of poor families struggling
to pay severely unaffordable rental housing costs has increased by
800,000, or 17 percent, while the number of homeless children living in
temporary shelters has increased by 12 percent, to 325,000, in 2009. Two
to three times as many were homeless in 2009 if one also includes
children living in temporary hotels or motels, doubled up with other
families, or on the street. [3]
<http://www.cbpp.org/cms/index.cfm?fa=view&id=3332&emailView=1#_ftn3> 

 

Cuts in housing vouchers would also diminish a helpful source of
economic demand that contributes to growth in local economies. Housing
vouchers free up budgetary resources for low-income families that they
are likely to spend quickly on food and other necessities. In this
respect, housing vouchers are similar to food stamps and unemployment
insurance, which the Congressional Budget Office and other economic
experts have identified as among the most effective tools to spur demand
and boost the economy when it is weak. In addition, housing vouchers
reduce vacancies and provide reliable rental income for thousands of
low- and moderate-income property owners who rent to voucher tenants.
This helps owners to maintain their properties in good condition at a
time when foreclosures and high vacancy rates are contributing to blight
in many neighborhoods.

http://www.cbpp.org/cms/index.cfm?fa=view&id=3332&emailView=1

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://kilakwa.net/pipermail/nyaprs_kilakwa.net/attachments/20101203/532e67a5/attachment.html>