Fallout from Sequestration: Massive Budget Cuts Jeopardize Public Housing

At a time of rising poverty, the huge federal budget cuts known as sequestration will eliminate many units of low-income housing desperately needed by the nation’s poorest people. At the same time, the salaries of nonprofit housing executives continue to rise ever higher, reducing the scant funds available for housing.

by Lynda Carson

 

Poor people in Berkeley are facing tough times in the immediate future. The nation’s housing assistance programs for low-income people have been endangered by the massive federal budget cutbacks known as sequestration. Poor families in Berkeley are already being seriously impacted by reductions in the Section 8 voucher program (now known as the Housing Choice Voucher Program).

At the same time, city housing officials are planning to sell public housing units in Berkeley to out-of-state billionaires, placing additional hardships on low-income households who are being pressured out of their public housing units, and may be driven out of town.

The Berkeley Housing Authority (BHA) recently informed 14 households that their Section 8 vouchers have been suspended until further notice. The households received the vouchers from the BHA on April 12, 2013, and have recently been notified that the BHA will not honor a “Request for Tenancy Approval” for the housing of their choice.

The BHA also has given notice to about 200 additional households in the final stages of being eligible to receive Section 8 vouchers, that their applications for the vouchers have been suspended until further notice. Low-income households in the Section 8 program pay 30 to 40 percent of their income in rent every month, and the rest of the rent is paid to the landlord by the federal program.

On March 1, 2013, approximately $85 billion in federal budget cuts took effect. The cutbacks, collectively known as sequestration, are part of a 10-year plan of catastrophic funding reductions to our nation’s discretionary domestic programs, including the U.S. Department of Housing and Urban Development (HUD).

The impact of sequestration on the BHA has resulted in the loss of more than $1.7 million in annual funding for rental subsidy payments. The BHA has lost an additional $386,000 in administrative fees to operate its programs, including the Section 8 Voucher Program, the Project-Based Voucher Program, and the Public Housing Program.

The BHA’s public housing program still has 39 occupied public housing units, while the BHA is in the transition process of selling its 75 public housing units to out-of-state billionaires that own the Related Companies of California, LLC.

As a direct result of ongoing sequestration budget cuts, the BHA is no longer able to continue utilizing all 1,866 vouchers allocated by HUD to assist eligible low-income families at the current benefit level. Vouchers have been taken back from 14 households in the Section 8 voucher program in Berkeley. Also, vouchers for 200 other households are no longer currently available, and the BHA has suspended indefinitely all plans to award any more Section 8 Project-Based Vouchers in the future.

Recently it was reported that the BHA estimates that an additional 74 households may lose their vouchers during 2014.

It all adds up to some very difficult times for the poor in Berkeley, and for some of the low-income households that were pressured out of their public housing units and given a Section 8 voucher to help relocate elsewhere.

Already, three households have moved into the jurisdiction of the Contra Costa County Housing Authority, and three more households moved into the jurisdiction of the Richmond Housing Authority. Also, two other households have moved out of Berkeley into the jurisdiction of the Alameda County Housing Authority, and two households moved into the jurisdiction of the Oakland Housing Authority.

Indeed, the situation looks very grim for the poor across the nation, according to a report released on May 22 from a survey conducted by the Public Housing Authorities Directors Association involving 300 housing agencies from 41 states.

At least 51 agencies reported that they will terminate housing vouchers during the next six months, and an additional 75 agencies have reported that the budget cuts known as sequestration will result in higher rents for voucher holders.

If the U.S. keeps eliminating low-income housing, public housing for poor people will be as shown here — a sleeping bag on a Berkeley sidewalk. Lydia Gans photo

 

In addition to all the budget cuts affecting the poor in the nation’s federal housing programs, the high salaries and compensation paid to some top executives in local charitable housing organizations are absorbing some of the scant taxpayer funds available to construct low-income housing for poor families.

Recently, a Section 8 tenant in a nonprofit, taxpayer-subsidized housing project in Oakland, reported that her monthly rent was increased by around $100 dollars after the sequestration budget cuts went into effect. Wanting to remain anonymous because the building manager from her nonprofit housing agency told her not to tell anyone of her rent increase, she is very worried that the increase will have to come out of her pocket. She is so poor that she receives food stamps to survive, and it concerned her that the rent increase may be used to subsidize the wages of some overpaid executives running the subsidized housing project she resides in.

Recently, there have been significant increases in salaries and compensation for some top executives in local nonprofit housing organizations in the Bay Area, according to the latest 990 tax forms filed with the federal government.

Bear in mind that the salaries of these nonprofit executives continue to rise even while poverty and homelessness are increasing to crisis levels, and there is an alarming shortfall of low-income housing for poor people. Many tenants in these nonprofit housing projects must survive on only a few hundred dollars a month in income, resulting in a glaring income gap between tenants of these nonprofit agencies and their well-paid executives. A few examples may serve to tell this story:

EAH Housing: In 2012, more than 11 executives at EAH Inc. earned well over $100,000 per year, including two people making well over $200,000 a year. Leading the pack, Mary Murtagh, President, was paid $298,850 in 2012. Laura Hall, Chief Operating Officer, was paid $208,286. Cathy Macy, CFO, was paid $186,709. Stephen Lucas, VP Acquisitions, was paid $182,991.

Bridge Housing: In 2011, the top executive at Bridge Housing took in well over $300,000 that year, with six other executives pulling in well over $200,000 annually. Cynthia Parker was paid $330,249 in compensation in 2011. Rebecca Hiebasko was paid $278,224. Kimberly A. McKay was paid $255,665. Susan Johnson was paid $235,875. D Valentine was paid $235.840. Brad Wiblin was paid $200,887. Ann Silverberg was paid $196,499.

Christian Church Homes: In 2011, Don Stump, President/CEO, was compensated $181,874. Cynthia Lappin, VP Operations & COO, was paid $157,295. Winthrop Marshall, VP Finance & CFO, was paid $151,687.

Eden Housing: In 2011, Linda Mandolini, Executive Director, was paid $188,834. Jan Peters, Chief Operating Officer, was paid $187,538. Terese Mcnamee, CFO, was paid $175,804.

 

Lynda Carson may be reached at tenantsrule@yahoo.com

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