JULIA KEHOE
Cuts to the federally funded Section 8 housing program that could lead to up to 2,000 households in Massachusetts losing their rental housing assistance in about two months have drawn protests not only from tenants and housing advocates, but property owners and developers as well.
The U.S. Department of Housing and Urban Development notified the state Department of Housing and Community Development about three weeks ago that it could slash up to $3.1 million from its Section 8 budget, which would mean that the state agency would have to eliminate 2,000 property owners and tenants from the program starting in June.
Although the housing voucher program is fully funded by Congress, HUD has decided to stop reimbursing agencies for actual housing voucher costs and instead provide reimbursement for Section 8 expenses based on the program’s average costs in August 2003.
Housing advocates worry that such cuts will force low-income families in the Bay State out on the streets. The average annual income for households that receive Section 8 assistance in Massachusetts is $13,000, and if they lose the rental vouchers most won’t be able to afford the market-rate rents in this state, which are among the highest in the country, they argue.
Advocates also fear that the cuts are creating so much uncertainty over the Section 8 program that many developers and property owners will be reluctant to participate in the program and offer housing to the lowest-income individuals in the future.
“If [the Section 8 cuts] were to take place, it would be outrageous,” said Jon Rudzinski, senior vice president of WinnDevelopment, a division of the Boston-based WinnCompanies. The WinnCompanies manages about 2,000 apartments in the Boston and Cambridge areas. About 150 of those apartments are occupied by tenants who receive Section 8 rental assistance, according to Rudzinski.
If the Section 8 terminations take place, it will ultimately reduce the faith that developers and lenders have had in the rental assistance program, explained Rudzinski. “It’s more the psychological effect it would have on developers and lenders going forward,” he said.
‘Potential Crisis’
Property owners, particularly owners of smaller apartment buildings, who have relied on the steady stream of Section 8 assistance will be particularly hard hit. Rudzinski said while some property owners who lose the Section 8 assistance will be able to fill vacant apartments, low-income individuals will be displaced and the owners themselves will face turnover costs in the short term.
But some affordable housing developers build the Section 8 assistance into their plans when they seek the necessary financing. With that critical piece missing, such housing projects could be in jeopardy.
“Housing development will suffer as a result of this,” said Julia Kehoe, executive director of the Metropolitan Boston Housing Partnership. “The state has never considered terminating [Section 8] contracts before.”
MBHP, which administers the Section 8 program in Greater Boston, sent letters to all property owners and tenants last week notifying them about the possible cuts. Households in Greater Boston will make up half of the 2,000 cuts, according to Kehoe.
Housing advocates are not only concerned about the funding cuts. They are also worried about the Bush administration’s proposal to “deregulate” the Section 8 program and provide more flexibility to housing authorities over how they administer the program. The administration wants to provide block grants of money to local public housing authorities. Currently, housing authorities receive a set number of vouchers.
At a press conference last Wednesday, Kehoe and other leaders of the state’s nonprofit housing agencies urged tenants and landlords to contact Gov. Mitt Romney, President Bush and the state’s congressional leaders to oppose the cuts and changes.
“This is a disaster that can and absolutely must be avoided,” said Maureen Fitzgerald, executive director of the Massachusetts Nonprofit Housing Association, a network of nine regional nonprofit housing agencies.
Some 67,000 Section 8 vouchers are in use in Massachusetts. DHCD held a hearing last Friday to discuss who will be terminated from the Section 8 program. The hearing also was set to discuss lowering payment standards, or the amount of rent the voucher will cover and the portion that a tenant must pay. DHCD would have to lower the payment standards starting in July unless HUD reverses its funding decision.
Under the Section 8 program, tenants must use 30 percent of their income to pay for rent and the remainder is paid by the government. However, under changes proposed by the Bush administration, local public housing authorities would be able to ask tenants to use more of their income for rent, a step housing advocates fear would harm the poorest families.
Housing authorities are also required to distribute 75 percent of the Section 8 vouchers they receive to households earning 30 percent or less of the area median income, but the proposal seeks to remove that cap.
Romney has sent a letter to HUD Secretary Alphonso R. Jackson and Rep. Michael E. Capuano, D-Mass., urging them to do everything in their “power to prevent this potential crisis from occurring.”
“Without an immediate change in the policy that has been communicated by HUD to our Department of Housing and Community Development, thousands of tenants face disruption of their living situations on extremely short notice,” wrote Romney, in a letter to Jackson dated April 13.
Aglaia Pikounis may be reached at apikounis@thewarrengroup.com.
