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Slashing Section 8



(Photo illustration by Julie Barnett)

Reductions in a key housing program could hurt the city's poor

A change in the way the federal government calculates Section 8 payments could hurt San Antonio residents who participate in the federal housing program.

The San Antonio Housing Authority, which is receiving fewer federal dollars under the new payment methodology, is confronting a Hobson's choice: SAHA can pay a smaller percentage of Section 8 rents, which allows it to serve more of the city's poor. Or it can pay a larger portion of the rents, but serve fewer people. Either way, San Antonio's most vulnerable people will feel the pinch.

Nationwide, nearly 2 million families participate in Section 8. In San Antonio, 11,521 families live in Section 8 housing. However, three times that many people - 35,000 - are on the waiting list, and SAHA hasn't accepted new applications for 18 months.

Last month, the Department of Housing and Urban Development released its controversial revised Fair Market Rents.

FMRs are gross rent estimates, which include not only the rent but also the cost of all utilities, except telephones. They provide a benchmark for local housing authorities to determine the eligibility of rental housing units for Section 8; participants cannot rent units whose rents exceed the FMRs.

At issue is the fact HUD based its 2005 fair market rents on the 2000 census and used a new methodology that averages a city's rent with that of its suburbs, where rental housing is often cheaper.

As a result, HUD's new FMRs are significantly lower than in 2004, but in many cases, the department's figures don't reflect the true market rent. Faced with higher rents than HUD has calculated, many poor families will have to pay more for their housing.

Looking at the FMRs, one might get the impression that where the effects were drastic for others, they were fairly negligible for San Antonio. For example, San Francisco was hit hard when its FMR for a four-bedroom house dropped drastically, compelling renters to find an extra $405 a month. Yet, San Antonio's FMR for a four-bedroom increased from $1,044 to $1,139. In spite of that, San Antonio's Section 8 families will still pay more for rent because of reductions in federal funding for the program.

Previously, Section 8 tenants have contributed 30 percent of their income toward rent and utilities; the federal government covered the rest of the cost. Under the new system, HUD looked at the average cost per voucher in August 2003 - which in San Antonio was $477 - and presented SAHA with a lump sum based on the number of Section 8 recipients. Subsequently, the SAHA's Section 8 funding decreased from $80 million to $72 million. SAHA appealed to HUD and received an additional $1.9 million, but the amount is still short of what the local housing authority needs to pay for Section 8 vouchers.

As federal funding to SAHA decreases, San Antonio's poorest families have fewer housing choices. SAHA is going to pay less money and the family is going to have to pay the difference.
Thus, SAHA must choose whether to help more people by giving them less money, or fewer people by giving them more money.

"Our goal is to continue to serve the same number of folks that we have right now," says Deborah Flach, SAHA's vice president of assisted housing programs. "It's just a matter of how much are we going to be able to support that voucher."

What does that mean to a Section 8 tenant? This year, the Fair Market Rent on an efficiency apartment is $425. Because of the budget cuts, SAHA has reduced its payment standard - or the percentage of the FMR it can pay - to 90 percent or $383, leaving the tenant to pay the $103 difference. Previously, SAHA paid $486 on that same efficiency.

To add to the confusion, until two recertification cycles have passed, the new payment standards can only be applied to new admissions or to those residents who move or renegotiate their rental agreement. So, SAHA is not likely to feel the budgetary relief for another two years.

On Capitol Hill, proponents of the Section 8 cuts justify the decrease by saying the program accounts for nearly half of HUD's budget. Section 8, they claim, siphons funds from other programs, due in part because Section 8 property owners demand rents higher than the fair market - a charge SAHA is quick to dismiss.

Critics of the funding reductions claim that HUD is using the cuts to reduce the number of participants. By placing more of the funding burden on local housing authorities, HUD might be taking the first step in abandoning Section 8 altogether.

As federal funding to SAHA decreases, San Antonio's poorest families have fewer housing choices. SAHA is going to pay less money and the family is going to have to pay the difference, Flach says. "And they'll have to decide: 'Can I afford to stay in the house I've been in for five years, or do I need to move into an area where rents are more affordable?'"

So far, San Antonians haven't felt the brunt of the funding shortage because the rental market is soft; according to the San Antonio Board of Realtors, there is a 19 percent increase in rental vacancy rates over last year.

And, according to Flach, most landlords who accept Section 8 aren't raising the rents. "They are riding the wave with us to see what next year brings," Flach says. "If it gets any worse, then they are going to have to make a business decision."

By Susan Pagani

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