Thousands of Low-Income Tenants at Risk Due to Sequestration

An estimated 140,000 households will lose housing vouchers because of sequestration. The budget cuts also will shred Meals on Wheels for senior citizens, homelessness programs, public housing, and AIDS and HIV services. Thousands of low-income renters now are threatened with higher rent increases, or the possible loss of their vouchers.

by Lynda Carson

Oakland—With the long-lasting effects of the draconian sequestration budget cuts triggering a series of economic hardships, low-income people in Oakland and across the nation are being stepped on.

Due to the ongoing, automatic, across-the-board spending cuts mandated by sequestration ($1.2 trillion in ongoing spending cuts), and the loss of tens of thousands of jobs as a direct result, it has become even more challenging for residents in Oakland to find work. It is very difficult to find employment that pays a living wage, or to receive adequate assistance for food, housing, energy bills, transportation needs, health care, dental work, child care or day care services.

The Section 8 housing choice voucher program is also at risk in Oakland because the Oakland Housing Authority is facing over $11 million in budget cuts since sequestration budget cuts first took effect on March 1, 2013. Thousands of low-income renters now are threatened with higher rent increases, or the possible loss of their vouchers some day.

Low-income families in the Section 8 voucher program pay 30 to 40 percent of their income in rent each month, and the rest of the rent is paid to the landlord by the federal program.

Because Democrats joined with Republicans in allowing the sequestration budgets cuts to continue in the latest political deal known as a “continuing resolution” that ended the government shutdown on October 16, it appears to be a very grim situation for Section 8 voucher holders in Oakland, San Francisco, Berkeley and in cities all across the nation. Housing officials claim that 140,000 voucher holders are at risk of losing their housing vouchers because of the sequestration budget cuts.

These budget cuts are also shredding the Meals on Wheels program that feeds senior citizens, and have triggered massive cutbacks to education, food programs, small business, food safety, mental health programs, emergency responders, Native American programs, public housing, Head Start, homelessness programs, AIDS and HIV treatment services, Community Development Block Grants, and many other vital services.

Local nonprofit developers, including Affordable Housing Associates, Resources for Community Development, and East Bay Asian Local Development Corporation, have teamed up with local and national organizations that are pushing for Rental Assistance Reform legislation to be passed in the House and Senate. Many housing advocates charge that this legislation is harmful to the poor.

The nonprofit organizations are pushing for Rental Assistance Reform (RAR) legislation that will result in fewer Section 8 housing choice vouchers for the poor, higher rents for public housing residents, and the acceleration of the privatization of conventional public housing projects into privatized, mixed-income, residential housing developments for higher income renters. These developments are being promoted by nonprofit and for-profit affordable housing developers who want to get their hands on public housing properties locally, and across the nation.

In California alone, when Gov. Jerry Brown put more than 400 redevelopment agencies out of business in 2011, the multi-billion-dollar affordable housing industry began looking for other funding sources to continue its empire building. The industry decided on grabbing as much conventional public housing property as possible, and wants to exploit the Section 8 housing choice voucher program for more project-based vouchers. The affordable housing industry is pushing for RAR legislation to be passed in the House and Senate as soon as possible and it may be tucked away inside legislation heading for Congress as soon as December 13, 2013.

The impact of RAR legislation will result in more Section 8 housing choice vouchers being taken away from low-income renters in Oakland and all across the nation, so that they can be converted into project-based vouchers to fund so-called affordable housing projects.

Currently, under federal law, each Public Housing Authority (there are about 3,300 PHAs nationwide) is allowed to grab as much as 20 percent of the funding granted to them that is meant to be used for Section 8 housing choice vouchers for low-income renters, and convert the funding for use as project-based vouchers. Project-based vouchers are not given to individual renters, but instead are used by nonprofit and for-profit housing developers to fund their projects.

The so-called affordable housing industry wants RAR legislation to be passed that would allow all 3,300 PHAs to convert 25 percent of their Section 8 housing choice vouchers into project-based vouchers so highly paid executive directors of housing agencies can expand their housing empires. This is more than what is currently allowed under federal law, and would be a hardship on low-income housing choice voucher holders.

Rental Assistance Reform is a Trojan horse — a piece of stealth legislation that was created under the guise of helping the poor, but will actually help the housing industry. RAR legislation will promote higher rents for poor people in public housing and the Section 8 housing choice voucher program, and it will scale back itemized deductions for medical and child care used by the poor for rent reductions in those programs.

In total, the Congressional Budget Office (CBO) estimates that poor people in public housing and the Section 8 voucher program would pay about $1.75 billion more in rent over a five-year period because of the loss of itemized deductions for medical and child care, in addition to the major rent increases that would be imposed on public housing tenants.

Another aspect of RAR, if passed into law, would change federal law so that higher income families would be assisted by the nation’s federal housing programs.

At present, 75 percent of housing vouchers and 40 percent of project-based Section 8 and public housing units must be allocated to households with incomes at or below 30 percent of the local median income when they enter the program. RAR would instead require that those vouchers and units go to households with incomes at or below 30 percent of the local median or the federal poverty line, whichever is higher.

Young protesters call for an end to evictions at Oakland City Hall. Lydia Gans photo

 

By subsidizing the rents of higher income renters instead of low-income renters, the CBO estimates that the change would raise rent revenues and cut program costs by $1.12 billion over five years, because families admitted into the programs could afford somewhat higher rents.

RAR also supports the Rental Assistance Demonstration program (RAD) that accelerates the privatization of conventional public housing, and tests the conversion of public housing and Section 8 moderate rehabilitation units to project-based vouchers or Section 8 project-based rental assistance, and allows similar conversions of units from the Rent Supplement and Rental Assistance Payment programs.

On Sept. 24, 2013, in San Francisco, the Western Regional Advocacy Project, Poor Magazine, the San Francisco Bay View newspaper, Causa Justa/Just Cause, and POWER united for an emergency press conference on the steps of City Hall in protest against RAD. Their message was: “Stop The Illegal Selling Of Our Housing Equity, Stop The RAD.”

Mayor Ed Lee and the San Francisco Housing Authority want to privatize as many as 3,000 public housing units out of a total of 6,054 public housing units, and hand over their day-to-day operations to some very eager nonprofit housing developers. The so-called affordable housing developers are drooling at the thought of grabbing as many public housing units as possible for privatization, while displacing the poor with their major renovation projects that eventually will result in new, gentrified housing projects for higher income and middle-class renters.

HUD Secretary Shaun Donovan was in San Francisco on September 24 to promote RAD while people protested against RAD at City Hall, and Donovan signed off on Mayor Lee’s scheme to privatize San Francisco’s public housing projects.

Rental Assistance Reform also seeks to create more Moving-To-Work (MTW)  PHAs, and seeks to give some of the 33 existing MTWs more flexibility.

Authorized by Congress in 1996, the Moving To Work (MTW) demonstration program was created for a limited number of PHAs to try out new and different ways to save money, and find cheaper methods to deliver housing services. However, MTWs have morphed into agencies that are becoming notorious for abusing the funding from Congress — funding that was meant to assist the poor.

In April 2012, HUD was under fire by the Government Accounting Office (GAO). The GAO criticized any assertions by HUD that the activities of MTWs activities can be evaluated properly. The GAO is an investigative arm of Congress with the power to examine matters related to the receipt and use of funding by Congress. The GAO believes that MTWs are not regulated enough to properly evaluate how they are operating.

The latest continuing resolution that President Barack Obama signed that ended the government shutdown on October 16, only funds the federal government through January 15, 2014, and only extends the debt limit until February 7, 2014. Another government shutdown may occur again in a few months if the budget battles in Congress continue.

The House and Senate also passed a measure that requires a conference committee of 29 members to come up with a spending plan, and to return a budget agreement to both chambers by December 13.

It is up to the public at large to speak up immediately and pressure the politicians to enact new legislation that will make the rich pay their fair share of taxes to do business in America, and to persuade the lawmakers to reverse the sequestration budget cuts that have shredded the nation’s safety-net.

Lynda Carson may be reached at tenantsrule@yahoo.com

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