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Sequestration Stalls Federal Assistance for Low-Income Renters

“Section 8 is not going to see any new funding.” For many, a Section 8 rental is potentially the difference between housing and homelessness.

September 5, 2013
Tom Blackburn-Rodriguez , Maui Weekly

Section 8, Maui County's federal housing assistance program for low-income renters, has 3,000 applicants in a queue that was closed last year. This is an increase of 2,000 applicants since 2008, when the waiting list was at 1,000.

Jo-Ann Ridao, Maui County's director of Housing and Human Concerns, told the Maui Weekly, "Section 8 is not going to see any new funding."

This news comes as Maui Realtors report a shortage of rentals and rising rent prices, as the economy continues to slowly recover from the Great Recession of 2008-09. That shortage and increase in rents hits low-income families especially hard. For many, a Section 8 rental is potentially the difference between housing and homelessness.

Article Photos

This sign greets visitors to the Section 8 Program office in Kahului

Households approved for a Section 8 rental voucher pay 30 percent of their income toward rent, with the federal voucher paying the difference to the landlord. Those who are eligible for the program must be low-income. A household must earn less than 50 percent of the county median income to be eligible for Section 8 assistance.

Section 8 rental units are required to pass a physical inspection and be affordable as defined under program pricing guidelines.

According to Milton Ito, County Section 8 Program supervisor, "The sequestration budget cuts will force state and local housing agencies to cut the number of low-income families using Housing Choice Vouchers to afford housing by roughly 140,000 by early 2014."

The cuts come at a time when the number of low-income families that need housing assistance has been rising sharply nationwide. There are long waiting lists for vouchers in almost every community, and homelessness remains a persistent problem.

Nationally, affordable housing advocates contend that the sequestration will cut more than $2 billion from this year's federal housing assistance and U.S. Department of Housing and Urban Development community-development programs.

The effects of the sequestration are already here. Almost all housing authorities have stopped issuing vouchers to new families, even as other families move off the program. Facing large shortfalls from the sequestration, agencies have been forced to take steps to reduce program costs quickly, even as they spend down reserves. Some housing agencies have not been able to close budget gaps through attrition alone, and were forced to terminate housing contracts for families that were already in place.

Further exacerbating the problem is the fact that since future funding is based in part on actual expenditures, any cuts today will result in a contraction of an agency's program in the future.

"As a result of the sequestration cuts that took effect on March 1, the County of Maui's Section 8 Program budget was reduced by approximately $700,000," Ito said in a written response to questions about the program.

The new funding amount of approximately $15.5 million in annual housing assistance will be able to assist approximately 1,300 families.

"This amounts to a reduction of program size equivalent to approximately 60 families," Ito said.

"Through the county's normal attrition rate, the county will be at that level by the end of the calendar year 2013, and the program reserves are more than adequate to cover any budget shortfalls," he added.

The County of Maui reduced its Section 8 Program Payment Standards in October 2011 and again in October 2012. Department officials said that substantial savings have already been realized as a result of the reductions and will continue until October 2014.

Over the course of this period, savings to the county will be approximately $1 million, which in itself is expected to nullify the effects of the sequestration for the County of Maui. However, that does not offer much hope to the 3,000 families that will still have to wait for rental assistance.

While calling up families from the program's waiting list and assisting them is currently on hold, the County of Maui does not anticipate having any families dropped from the Section 8 Housing Choice Voucher Program as a result of the sequester, and does not expect shortfalls for the coming year and the foreseeable future.

For more information about the Section 8 program, call (808) 270-7751 or email housing.hhc@co.maui.hi.us.

 
 
 

 

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