The Voucher Game

As a result of a flawed, out-of-date funding formula, Bush's current $15.9 billion budget request to Congress for 2007 Section 8 funds would cut about 20,000 vouchers from 70% of housing agencies across the country, report documents

According to a report released last month by the Center on Budget and Policy Priorities, the City of Austin Housing Authority stands to lose 69 housing vouchers under President Bush's $15.9 billion budget request to Congress for Section 8 rental assistance in 2007 as a result of a flawed, out-of-date funding formula based on voucher costs from a three-month period in 2004. The formula includes an inflation adjustment but the adjustment is based on two-year-old rent and utility cost data, and the overall formula does not reflect recent changes in factors like rent or tenant incomes. As report co-author Douglas Rice put it, "The formula doesn't reflect the reality on the ground."

Based on a national overview of the 2,400 housing agencies administering the Section 8 program, the report concludes that Bush's '07 budget request would cut about 20,000 vouchers from 70% of agencies, "forcing them to cut the number of families they serve or reduce the average rent subsidy they provide to each family, which would raise rent burdens on needy families or have other harmful consequences." At the same time, however, other agencies – about a quarter of those assessed – will receive an increase in voucher funding under the formula, not based on need, but based on the out-dated 2004 housing market data. "There's enough funding in the administration's request to allow every agency to renew every voucher it had leased up in 2006, [but] only if the money is distributed in the right way," Rice said.

Under the administration's proposed housing budget, about 115 housing agencies in Texas will have to cut off 1,094 families from assistance in 2007, according to the report, which also notes that "Overall, 3% of authorized vouchers in the state would be left unused in 2007 due to funding shortfalls." Generally what happens with vouchers is that when someone leaves the Section 8 program, their voucher gets reissued to someone on the local housing authority's waiting list, explained report co-author Barbara Sard. If an agency doesn't get adequate funding, however, it won't be able to reissue that voucher.

According to the report, the City of Austin Housing Authority will get enough money for 4,863 vouchers under Bush's '07 budget proposal, compared to 4,932 in 2006. Lisa Garcia, vice-president of assisted housing, said that despite federal funding cuts, the number of Section 8 vouchers the city has issued over the past few years – around 5,000, fluctuating slightly from month to month – has basically held steady. "In Austin, we haven't had a huge significant decrease. We haven't seen any new vouchers, either," said Garcia, who attributed this to frugal budgeting. There are about 600 people on the housing authority's waiting list, soon to swell substantially since the city will open the list for three days in June, Garcia said. She estimated that 2,500 to 3,000 people would sign up during that period. Last time Austin opened the list – from April 2002 to May 2003 – about 10,000 people signed up for vouchers, Garcia said. Fred Fuchs, a housing attorney with Texas Rio Grande Legal Aid, said his clients typically have to wait two to five years to get a voucher either from the Austin Housing Authority or the much-smaller Travis Co. Housing Authority, which, according to the report, stands to lose 10 vouchers under Bush's '07 budget, receiving a total of 488.

Under the current funding formula, "there is no connection between the amount of money an agency receives and the number of vouchers they have leased up," Rice said, which makes it hard for housing agencies to predict from year to year exactly how many vouchers they'll be able to fund. Also, how much Congress actually allocates the Department of Housing and Urban Development, from which agencies get their Section 8 funds, hinges on the overall federal budget. (The administration's budget proposal is expected to get to the House by May, and the House's version to the Senate at some point after July 4, Sard said.) The trend in recent years has been that the amount originally proposed for HUD has gotten cut during the appropriations process, said Rice, but as he put it, "until Congress approves a final bill," all the funding is "up in the air." To read the full report, go to cbpp.org/3-13-06hous.htm.

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