First the Good. After the announcement that sequestration would cut housing assistance payments by 6% in the Section 8 program myself, like many others, feared that program participants in the Section 8 program would be at immediate risk of losing their housing. Luckily for Dane County we have some unspent budget authority that HUD is using to keep our assistance levels up and we have not had to terminate anyone from the Housing Choice voucher program to date for lack of funding.
The Bad. We only have a limited amount of additional budget authority to bridge that gap and unless Congress does something to end the sequester and fully fund HUD in the next budget, that buffer will run out. Long term forecasting will help us gauge how soon this will happen and we will deal with reduced funding by attrition, meaning we will be forced to stop issuing Section 8 vouchers to families who have been on our waiting list for over 5 years and allow our program to shrink as participants come off. It is better than terminating assistance to current program participants, but it still leaves families in need of assistance homeless, paying more that 40% of their income in rent or living in sub-standard housing without reprieve.
The Scary. The 6% cuts also impact the administration fees that PHAs are paid to run the Section 8 program on behalf of HUD. 6% wouldn’t be so dire if these fees had not already been cut by 25% at the beginning of 2012. HUD determines the amount of administrative fees each PHA needs to run its program and for the DCHA that comes to $67.70 per voucher per month, but due to Congress’s continual under-funding of HUD we are now only receiving 69% or $46.71 per voucher. Compounded over the 1022 vouchers the DCHA has under lease that is a reduction of $21,451 per month and $257,421 per year in cuts.
The vast majority of administration funding that allows the DCHA (and most other PHAs across the country) to run these programs and serve very low income families in our communities is generated by these Section 8 administration fees. Without them we would not be able to pay our staff, rent our office space or provide the basic services that Dane County needs. So far we have adapted to the reduced funding by shutting down our Home Ownership program, lying off staff, reducing overhead and shrinking our office space. We had created a very lean budget in order to break even under the 25% cut, but the extra 6% cut under sequestration puts us back in the red, and back to the cutting floor without much left to cut.
As a community and a country we need to decide where our priorities lie; are they sheltering the homeless or would we prefer to give tax breaks to the wealthy and corporations? Should we provide decent, safe and sanitary housing to the elderly and disabled or should we increase the size of our military? If you believe as I do that we need to do some nation building here at home, please contact your elected officials and encourage them to fully fund the Department of Housing and Urban Development in 2014.