HUD’s Reliance on Rent Trends for High-End Apartments to Criticize the Housing Voucher Program is Mistaken

Publication Date: March 2004

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

Author(s):

Research Area: Social conditions

Keywords: Economic inequality; Economic projections; Section 8; Affordable rental

Type: Report

Abstract:

The Administration’s fiscal year 2005 budget requests an appropriation for the Section 8 housing voucher program that is $1 billion less than Congress appropriated in fiscal year 2004 and more than $1.6 billion — or about 12 percent — less than would be needed to maintain services at their current level. The cuts then rise to about $4.6 billion by fiscal year 2009.

HUD officials claim these funding cuts will not lead to a reduction in the number of families served because the budget also proposes to convert the voucher program to a block grant (labeled the “Flexible Voucher Program”) and give local housing agencies greater discretion to set program policies, including the maximum subsidy levels for apartments that voucher-holders occupy. They claim that local housing agencies are better positioned than HUD to set maximum subsidy levels and that the increased flexibility provided under the Administration’s proposal will cause per-unit costs to drop. To support this assertion, they point to data in a November 29, 2003 New York Times article showing that market rents declined in ten metropolitan areas between 2002 and 2003. HUD asserts that rents in the Section 8 housing voucher program increased in each of these areas over the same time period.