New York City Grapples With Housing Voucher Crisis

Seems as if New York City has an affordable housing crisis writ large. The local housing authority is short $45 million and may have to revoke as many as 10,500 already-issued Section 8 housing choice vouchers. Alternatively, it may reduce the value of existing vouchers, leaving landlords, tenants or both to cover the costs.

It’s hard not to see mismanagement here. The U.S. Department of Housing and Urban Development reportedly warned the authority last May that it was in danger of exceeding its annual voucher allotment. But the authority went on issuing vouchers anyway, though at a lower rate.

That said, it’s hard, at least for me, to put all the blame on the housing authority. First off, consider the conditions that led to the crisis. Under the Section 8 program, voucher recipients are generally responsible for paying 30% of their income for rent. The voucher makes up the difference. As recipients lost their jobs or had their hours cut, the authority’s rent liabilities increased. At the same time, rental costs increased, again driving up per voucher costs.

Notwithstanding rising demands for vouchers, Congress provided less voucher funding in 2009 than what agencies would have received under the formula it used for the 2008 appropriation. The New York City housing authority got $58 million less. And, as I wrote before, it didn’t learn of the cut until May because Congress didn’t finished the HUD budget on time. The authority could hardly put its whole voucher program on hold while waiting for its final mark.

And what was the authority to do when it learned of the cut? Good fiscal management would say it should have immediately reduced its voucher commitments to what its budget would cover.

Consider the hardships that would have exacerbated. Blogger Harry Moroz reports that the average income of Section 8 housing vouchers in New York City is $14,706. Last year, the annualized fair market rent on a one-bedroom apartment in the city was only $42 less than that. Balancing the budget would thus obviously have put more people out on the streets or into the city’s emergency shelters.

Ultimately, the authority did act on its voucher crisis. In December, it notified voucher holders who hadn’t yet found an apartment that they wouldn’t receive housing assistance after all. Before that, it apparently restricted new vouchers to victims of domestic violence, families referred by the child welfare agency and certain other emergency cases. As of December, no new housing vouchers for them either.

The New York City voucher crisis is big in part because the city is big and has some of the highest rental costs in the country. But it’s unfortunately not unique. As the New York Times reports, some other housing authorities have terminated vouchers, and some of cut their contributions to rents. Who knows how many have enormous waiting lists–or don’t only because they’ve closed them?

It’s from this perspective that I look at President Obama’s proposed housing assistance budget for Fiscal Year 2011.

For Section 8 vouchers, he’s proposed a modest $875 million (0.5%) increase. The Center on Budget and Policy Priorities estimates this would be just about enough to renew all vouchers in use this year. An additional $85 million would provide about 10,000 new vouchers for individuals and families who are homeless or at risk of homelessness. That’s 10,000 nationwide.

So much for the 124,760 households on New York City’s voucher waiting list–and the emergency cases in the days ahead. So much for the 8.5 million or more U.S. households who are paying more than half their income for rent and utilities.

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