Budget shortchanges housing
vouchers by more than $1 billion

PHADA calls on HUD to act

Contact: Tim Kaiser or Ted Van Dyke; 202-546-5445

The Public Housing Authorities Directors Association (PHADA), which includes more than 1,900 housing agency members from all over the United States, today joined with a coalition of other organizations to urge HUD and Congress to allocate sufficient funding for the Section 8 Housing Choice Voucher program. The association reacted to a new report issued by the Center on Budget Policy and Priorities (CBPP), which concluded that HUD's FY 2004 budget is $1.25 billion short for renewing Section 8 vouchers in use. The study was based on HUD's most current actual data. The shortage would result in the loss of affordable housing vouchers for 184,000 low-income families, elderly and disabled persons presently served under the program.

Under the voucher program, residents pay roughly 30 percent of their income for rent, while the federal government pays the remainder in the form of a subsidy that goes to private landlords. HUD's budget, released in February, included $13.05 billion for voucher renewals in FY 2004, which begins October 1. The new data, gathered from submissions by housing authorities across the country, shows that the HUD budget request will be $1.25 billion short. Based on current trends, utilization of vouchers in 2004 will be 96.7 percent with the average voucher costing $6,871. In contrast, HUD's budget, which anticipated a per voucher cost of $6468, would only fund 86.7 percent of the allocated vouchers at these newly projected costs.

Achieving a 96.7 percent utilization rate represents a significant accomplishment on the part of housing authorities that manage the Section 8 program. According to PHADA executive director, Timothy Kaiser, "Reaching virtually full program utilization is the result of years of effort by housing authority managers, working intensively with their low-income clients and private landlords to find private-sector housing for over 2 million families in need."

Senators Paul Sarbanes, Barbara Miksulski (both D-MD) and Jack Reed (D-RI) voiced their concerns in a formal letter to HUD Secretary Mel Martinez. The three senators hold key positions on the HUD authorization and appropriations committees. They urged Secretary Martinez to immediately seek additional funding to avoid the possibility of some people becoming homeless because of the shortfall.

"We strongly agree with the Senators," said Kaiser. "Without adequate funding, there is a real possibility that many of our members will have to dramatically curtail housing assistance to families in their communities. In some cases, families will be forced out onto the streets, risking becoming homeless, if the administration does not act," he said. Kaiser added that is important for HUD to act soon since the House Appropriations Committee will begin consideration of a FY 2004 HUD spending bill in a matter of days.

The full CBPP report can be accessed at here.

PHADA FRONT