Income Eligibility/Targeting

Summary
The House and Senate bills both change income targeting guidelines by generally giving housing authorities more flexibility in terms of whom they may admit.

S. 462
The Senate version calls for more strict income targeting. Specifically, of all new admissions in any given year, 40 percent must be below 30 percent of the local median income, and 70 percent of all families must be below 60 percent of median. The remaining 30 percent of all families may have incomes up to 80 percent of median. In Section 8, at least 65 percent of all families admitted each year must be very low-income (below 30 percent of median). In addition, 90 percent of all assisted Section 8 residents must be below 60 percent of median.

H.R. 2
The House bill allows families with incomes as high as 80 percent of the local area median income. Of all new admissions in any given year, however, at least 35 percent must have incomes below 30 percent of median (very low-income). In the Section 8 program, at least 40 percent of all families must be very-low income. The bill also includes a "fungibility" provision that allows HAs to offset public housing targeting requirements by more deeply targeting Section 8 assistance.

A more recent draft version of the bill requires 35 percent of new admissions to public housing to have income levels less than 30 percent of the median income level, and at least 70 percent to have income below 60 percent of the median level. For Section 8 assistance, the draft version requires 55 percent of new admissions to have income levels below 30 percent of the median, and 75 percent to have income levels below 60 percent of the median level.

PHADA position

• It is critical that HAs be given flexibility to admit families with more diverse (but still low) incomes. The House bill is preferable because it will create healthier public housing communities and lead to less reliance on federal operating subsidies.

• Income eligibility targets should apply to an HA's entire resident profile, not just to new admissions as dictated by both bills. "Profile targeting" is particularly needed because of the slow turnover in many public housing agencies. Otherwise, it could take many years for HAs to attain true income mixes in their properties.

• The "fungibility" between public housing and Section 8 contained in the House bill is essential. This gives HAs the flexibility they need to address unique circumstances in their localities. It would allow a healthier demographic mix in public housing and ameliorate somewhat the economic and social ghettoization of the poor.

• The definition of "very low income" should include any family that is working full-time at or near minimum wage. This distinction is necessary because of the arbitrary limitations of any system based on median income. In many large cities, for example, a minimum wage salary of $5.15 per hour may equal about 20-25 percent of the local median income. At the same time, the minimum wage might constitute as much as 30-40 percent of the local median income in a metropolitan area not far from the city. PHADA's proposal would ensure more equity because it would permit the suburban or rural-area minimum wage worker to receive the same benefit of income targeting as the city resident.

Suggested action
Modify the language in the final bill to conform to the suggestions noted above.