More Than 40,000 Low-Income Families Could Lose Housing Vouchers

Nearly 650,000 people were homeless last January, according to the U.S. Department of Housing and Urban Development’s Annual Homelessness Assessment report.

As I’ve noted before, this is undoubtedly an undercount. Still, it indicates a rising trend — one that will probably continue at least until the labor market generates many millions of new decent-paying jobs.

Now whatever the real homelessness number is seems likely to rise more than it would have otherwise, thanks to budget cuts pending in Congress.

Several pots of money are at issue, including Tenant-Based Rental Assistance and the Public Housing Capital Fund. I’ll deal with the first here and the other in a followup posting.

What the federal budget refers to as Tenant-Based Rental Assistance funds several kinds of housing vouchers, plus some employment services for participating families.

By far and away the largest portion goes to fund Housing Choice vouchers — the kind that recipients use to rent housing in the private market. Vouchers generally cover whatever portion of the rent is more than 30% of their income.

Anyone who’s ever rented an apartment on a year-to-year basis knows that rents go up. Vouchers thus always cost somewhat more than they did the year before — even if recipients don’t experience income losses, as many probably have.

For the past two fiscal years, the President proposed increases just large enough to cover the estimated costs of renewing existing vouchers — even though waiting lists for housing assistance were long many years before the foreclosure and jobs crises boosted need.

Again this year, he proposed what HUD estimated it would cost to renew the 2.1 million or so vouchers now in use.

He also asked for a no-cost contingency policy that would essentially allow HUD to shift some funds so that housing authorities with scant reserves could renew all the vouchers they’ve issued if the estimated renewal cost proved too low.

The House Appropriations Subcommittee for Transportation/HUD cut the proposed renewal funds by about $100 million and rejected the contingency proposal.

In the Senate, which is further along, the full Appropriations Committee approved what the President proposed for voucher renewals.

But, as the Center on Budget and Policy Priorities explains, its appropriation includes $750 million for the contingency fund rather than treating it separately.

So the Senate Committee’s bill, like the House Subcommittee’s bill, doesn’t provide nearly enough new funding to renew all existing vouchers.

CBPP estimates that more than 40,000 low-income households would lose their vouchers under the House Subcommittee’s bill. More than 25,000 would lose them under the Senate Committee’s bill.

No way these households would be able to cover the full costs of the units they’re renting.

Their annual incomes average only $12,600 — well below the federal poverty line for a family of two. Without vouchers, says CBPP, their housing costs would double or triple.

See what I mean about prospects for an increase in homelessness?

More bad news on the HUD budget in this table from the National Low Income Housing Coalition — and, as promised, in another posting.

One Response to More Than 40,000 Low-Income Families Could Lose Housing Vouchers

  1. […] series on Fiscal Year 2012 HUD appropriations. The first — on housing voucher cuts — is here. Like this:LikeBe the first to like this […]

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