Further Action By HUD Needed to Halt Cuts In Housing Assistance for Low-income Families

Publication Date: July 2004

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Barbara Sard; Will Fischer

Research Area: Social conditions

Keywords: Section 8; Housing assistance; Housing subsidies; Economic projections

Type: Report

Abstract:

On April 22, the Department of Housing and Urban Development announced a farreaching change in its policy for funding “Section 8” housing vouchers. The new HUD policy will result in many state and local housing agencies failing to receive sufficient funding to continue supporting all vouchers now in use. In testimony before the House Financial Services Committee on May 20, HUD Secretary Alphonso Jackson announced steps HUD will take to mitigate the harmful effects of the new policy. These steps are not sufficient, however, to prevent cuts in housing assistance this year. HUD’s new fiscal year 2004 funding policy (which is distinct from an Administration budget proposal to cut voucher funding sharply in fiscal year 2005 and to convert the program to a block grant) is compelling state and local housing agencies to institute cuts in assistance that will cause significant hardship among low-income families. The actions that Secretary Jackson announced on May 20 — correcting an error in the method that HUD initially used to calculate funding levels for some agencies and providing added funds for reserve accounts that agencies can use to cover shortfalls — reduced the magnitude of the required reductions, but have not eliminated the need for harsh cuts in some communities.