SECTION 8 CUTS WILL LIKELY INCREASE HOMELESSNESS FOR SAN FRANCISCO’S LOW INCOME RENTERS
In the long line of social programs being targeted from every angle and with every means by the Republican controlled congress and the administration, the Department of Housing and Urban Development (HUD) remains steadily at the top of the list. While it is undoubtedly the ultimate intention of conservative lawmakers to dismantle HUD altogether, certain programs are bearing the brunt of the scapegoat and poor-blaming axe more than others.
While HUD itself is on a swift path towards extinction, programs that promote homeownership and housing for more moderate income renters have been kept relatively safe from the budget bullets, while those which aim to serve the neediest and very lowest income citizens, specifically the Section 8 program, are suffering a most dreadful fate. It is no coincidence that the program’s constituency represents the highest percentage of people of color, immigrants, disabled and single parent families. They’re not likely to be Republican voters, high donors or influential beltway players. Nor do they have a well-organized or highly feared base of support.
What is Section 8?
The Section 8 program was created by the Federal government in the early 1970’s as a way to introduce housing subsidies into the private market. Rather than the original “public housing” model, where the government owned, operated and provided rent subsidies, the Section 8 program allowed for tenants to find affordable housing within the existing private housing stock by providing vouchers to assist with the cost of private market rents. The program was also meant to encourage large housing developers to build and manage housing for the poor.
Today, there are two types of Section 8 subsidy programs that take the form of rent assistance vouchers. “Project Based” Section 8 provides funding directly to private owners who, in turn, subsidize the rents on each unit in their building. Under this program, whenever a tenant moves in their rent is based on their income. When they move out, the rent subsidy stays with the unit and the next person to move in can benefit. The second type of voucher is a “tenant-based” voucher, which allows a tenant to rent from any landlord that accepts it and the difference between what they can afford and the market rent is made up by the Housing Authority, who administers the program locally.
What Is Affordable?
The Golden Rule of the Section 8 program is reflected by the Brooke Amendment, a federal regulation that maintains that a tenant should pay no more than 30% of their income for rent in order to guarantee affordability. Historically, this 30% of income calculation has been the formula for Section 8 rents and has become so established that renters in all markets tend to use the same rule of thumb. The idea is that 70% of one’s income is necessary to provide for all other basic needs and rent costs rising above the threshold would compromise those other family needs. The average Section 8 family in San Francisco earns $15,000 annually, thus the typical rent amount is around $ 4500 per year or $375 a month.
Anyone familiar with San Francisco’s sky-high rental costs understands that this leaves a sizable gap between what market rate rents are and what a tenant can actually afford. The gap between income and rents is the amount that the federal government uses to ensure that low-income renters can afford a unit. If an average two-bedroom unit is $1800, for instance, HUD is required to pay a difference of $1425.
Given that there are over 7,000 “tenant-based” Section 8 tenants in San Francisco, the costs for subsidies alone (not including administrative costs) is roughly one million dollars. Considering the reality of San Francisco’s rents as compared to the amount affordable to low income families it is no wonder that there are over 25,000 families on the almost-stagnant waiting list for Section 8 today—which has been closed to new applicants for over two years. It is also no wonder that the homeless population continues to swell and the exodus of low-income families rises. It takes extraordinary resources to provide truly affordable housing to our neediest families.
Housing Choice Vouchers
Recently, HUD renamed the “tenant-based” Section voucher program the “Housing Choice Voucher” (HCV). In the same vein as school choice vouchers, the name was meant to invoke free marketplace notions of competition as the driving force behind quality and affordability. If we give people the ability to “shop with their feet,” goes the thinking, then landlords will be forced to provide good quality housing at reasonable rates so as to gain the customer over their competition.
Conveniently, this concept could be sold to the more compassionate public and liberal politicians alike by using a compelling fair housing argument. If we open up the options for tenants to rent wherever they choose, then we will decrease concentration of poor people of color in the historical pockets of poverty, high crime and government neglect.
For the most part, housing advocates would probably agree that strides have been made through the implementation of this program. While many San Franciscans may have the impression that “the projects” are found in neighborhoods such as Hunters Point and Western Addition, there are as many Section 8 voucher tenants living in the Sunset, the Richmond, the Castro and downtown as anywhere else.
Why the War on Vouchers?
Despite the actual truth of the claims of removing fair housing barriers, as the war on federal housing programs intensifies, it is the “housing choice” Section 8 program that has been slated for the quickest and most painful death. There are many reasons why this is true but the most obvious include:
- The lack of an organized constituency: Section 8 renters tend not to have beltway connections or to donate large amounts to parties or candidates. They also are so commonly bogged down with basic survival tasks and under-resourced in every imaginable way, that they are counted upon not to mobilize a great deal of political clout or create any real threat to officeholders who vote for program cuts;
- The unpopularity of program participants: The media and conservative politicians have spent years’ worth of time and energy ensuring that low-incoming housing residents are consistently painted as a thoroughly unsympathetic lot. Middle America may indeed be concerned when learning of the loss of housing options for hard-working families, disabled adults and frail seniors. Unfortunately, many instead view HUD housing as inhabited by “welfare queens,” “gang bangers,” “illegal aliens,” and generally lazy, unproductive “drains on the system,” and so are not inclined to scream for justice when their housing is threatened.
- The smoke and mirrors of funding: The language of the Section 8 program is framed in terms of individual households served. This allows for budget cuts to happen that don’t necessarily change the overall numbers. It is far too easy to starve the program under the radar of the American voting public. Rents can be raised, income guidelines can change to serve more higher income families, and it still can appear from the outside that the same number of households are being served. Ruthless political decision-makers find it easy to play a shell game by giving less assistance to more households, thus disguising the real harm done.
The Damage Done
San Francisco’s Section 8 renters have suffered some serious blows already this year, some of which are more reversible than others. It’s important to note that the damage has been caused not solely by funding shortfalls but by important administrative decisions and policy changes as well. And the harm we have seen is not only a result of Congress but just as much by the Bush Administration under the auspices of HUD. This “double teaming” means that Section 8 renters are faced with a two-headed monster.
- 2005 Funding Cuts: The most blatant attack on Section 8 came this year from Congress, which cut overall HUD funding by 11.6 percent this year. This translated into 4% budget shortfalls for local housing authorities across the country and an expected loss of 80,000 Section 8 vouchers. For San Francisco, this has meant a loss of $5.7 million to the Housing Authority’s budget, representing 300 vouchers.
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Fair Market Rents: Each year, HUD is legally required to paint a portrait of local market rents, which is known as the “Fair Market Rents” (FMR). The calculation, supposed to reflect general housing costs in a region or metro area, sets the standard upon which Housing Authorities base the amount of housing assistance to given to each voucher holder. Local rent assistance amounts must be between 90% and 110% of what HUD determines as the “FMRs” for an area.
This year, in November, HUD got it seriously wrong for San Francisco. Based on phone surveys and census data for the tri-county area including San Mateo and Marin, HUD decided that rents have gone down, in some cases by 16%. The unfortunate reality for Section 8 residents is that landlords are still charging sky high rents, many of which haven’t been adjusted since the dot-com boom. What this miscalculation has meant is that tenant’s voucher amounts have been substantially reduced leaving them to make up the difference between what is covered and the actual rent charged. In effect, these are rent increases. Seniors and disabled renters, along with struggling families, are seeing raises in their rents of between $50-$300 dollars a month. Many have faced increases of 100%, unaffordable to most anyone but in this case the difference between housing and homelessness.
- HUD Funding Formula: In April of 2004, HUD re-interpreted the funding formula originally authorized by Congress for the Section 8 program. The result has been devastating. Rather than allocating dollars to local housing authorities based on actual need, the new interpretation relies on a somewhat arbitrary formula that attempts to predict the future based on an inaccurate portrait of the past. Prior to this change, local Housing Authorities’ funding was based on actual need with annual renewal funding guaranteed. Now allocations are made based on the average cost of vouchers in use at specific time. Not only is there simply no room for the unexpected, but also those Housing Authorities who might choose the more compassionate route and fully fund households, rather than spread the money thin over larger numbers of renters, will suffer. The larger actual numbers of vouchers they have covered, the more money they will receive the next year. Thus, there is an incentive to reduce assistance amounts to households in order to re-distribute the money to more households.
The Damage to Come?
This year, the Section 8 program has fared no better. While the president’s proposed 2006 HUD budget restores funding for about half of the vouchers lost in the 2005 budget battle, this still leaves us 40,000 vouchers short. Also, according to the budget formula proposed, the axe will fall again in the 2010 budget, leaving an even larger hole of 1200 unfunded vouchers for San Francisco alone. Section 8 program supporters in the House, including Tom Lantos and Nancy Pelosi representing San Francisco, voted to add $100 million dollars to the Section 8 funding in June but it is uncertain as to whether this will survive the Senate floor.
One of the biggest threats to the security and well being of Section 8 tenants is the mean-spirited, Republican-backed “State and Local Housing Voucher Flexibility Act of 2006.” This proposed bill would allow local housing authorities to seek drastic solutions to the funding crises created. The bill loosens restrictions on a range of actions and allows housing authorities for the first time to raise rents far above resident’s 30% of income, rent to larger numbers of higher income tenants, restrict the ability of resident’s to move to other jurisdictions among other things.
What We Can Do
There are three crucial areas on the Federal level that require extreme vigilance in order to minimize harm for San Francisco’s Section 8 residents.
- We must ensure that the added funding for Section 8 remain in the final HUD bill as it makes its way through the Congressional budget process. Senators Boxer and Feinstein will be key players, and need to hear from us about the urgency of the issue.
- The Voucher Flexibility Act must be vehemently opposed. The precedent set by the passage of this bill creates a slippery slope of the most dangerous kind. Once federal standards are dismantled there will be slim chance of turning back to ensure some measure of compassion from local agencies that are squeezed by ever increasing budget crunches.
- The Fair Market Rents will be re-determined for next year in October. Proposed FMRs have already been posted and they are mostly unchanged. The public has the opportunity to comment on the FMR process until August 1 and we are organizing input from community members and elected officials. Comments submitted last year by the Housing Authority, Bay Area Legal Aid, and Congress members Pelosi and Lantos were blatantly disregarded. We need to mobilize around sending HUD a clear message that we know our local housing market best and we will not tolerate a continuation of the resulting rent increases which are bound to lead to displacement and homelessness.
Locally, it is important that elected officials and agency heads understand that the federal government has relinquished their responsibility to provide housing for the poor. The Bush administration has made it abundantly clear that they do not believe low-income housing is their problem anymore. While we must fight this notion in any way we can, we must also face the sad reality that we are left to pick up the pieces of this housing mess locally. San Francisco must create ways to provide housing affordable to those at the very lowest income levels.
Section 8 renters, who earn an average of $15,000 annually, will undoubtedly be finding their rents unaffordable and many will start to lose their homes. The City needs to start thinking now about the damage to come and develop creative solutions to the problem which may include implementing rent subsidies locally, developing new low-income housing and administering a fund for emergency assistance. It should also look at innovative ideas such as community land trusts and ways to encourage more private owners to rent to Section 8 renters as well as ways to regulate the private rental market so as to ensure affordability for Section 8 renters.
A year ago, the Housing Rights Committee initiated the Save Section 8! San Francisco project in response to the vast increase in Section 8 renters who were coming through our doors at risk of losing their housing. We are organizing a coalition of community organizations, tenants and advocacy groups to fight federal funding cuts and to mobilize for local solutions to the crisis.
For more information or to get involved, contact Sara at 415-703-8634 or via email at sara_shortt@hotmail.com. For more information about renter’s rights for Section 8 tenants, visit our website at www.hrcsf.org. To learn more about federal housing policy visit the National Low Income Housing Coalition’s website at www.nlihc.org. For more info on the federal budget see Center for Budget and Policy Priorities.
Sara
