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Gutting Section 8

Filed under: Imported

The Center on Budget and Policy Priorities released a report this afternoon examining the impact of President Bush's proposed budget on the federal Section 8 voucher program. Section 8 is the country's largest housing assistance program, providing some two million households nationwide with assistance. People with Section 8 vouchers generally pay 30 percent of their income for rent, with the federal government covering the rest of the cost. 

CBPP determined that Section 8 cutbacks in 2005 will likely result in some 80,000 fewer households nationwide receiving rental assistance. In Minnesota, this is expected to translate into the loss of 1,198 housing vouchers.

The prognosis for 2006 is slightly better. Under Bush's proposed budget, there is an additional $1.5 billion in funding for Section 8--or enough money to add back roughly half of the vouchers expected to be eliminated this year. But Robert Greenstein, executive director of CBPP, cautions that Section 8 will likely face greater scrutiny as lawmakers attempt to soften proposed cuts to other popular initiatives. For instance, Bush's plan to gut the Community Development Block Grant program by as much as 50 percent has drawn widespread criticism from legislators of both parties.

"There is a significant possibility that as the fiscal year 2006 appropriations bill moves through Congress over the next six to nine months the funding level for vouchers could be reduced," Greenstein noted in a conference call with reporters this afternoon.

According to CBPP, after 2006 prospects for Section 8 turn decidedly grim. Basing its projections on five-year budget outlays provided by the Bush administration, the nonprofit group estimates that funding for an additional 370,000 vouchers will be eliminated through 2010. In other words, the total number of households likely to lose rental assistance over the next six years is 410,000--or more than 20 percent of the total now enrolled in the program.

"If 370,000 vouchers or anything close to that [are cut] I would think that would be by far the biggest cut in the program's history," says Greenstein.

In Minnesota this would mean that housing assistance would be available to 6,031 fewer households. Not surprisingly, these cuts would hit hardest in the Twin Cities: The three metro-area housing authorities would lose 2,897 vouchers between now and 2010.

Barbara Sard, CBPP's director of housing policy, notes that so far many local housing agencies have been able to blunt the impact of cuts to Section 8 by tapping reserve funds. "This year, while no good data exists, our expectation is that many agencies would have drawn down their reserve funds quite sharply and will have little left," Sard says. This means that housing agencies will have little choice but to cut vouchers.

The foulest reality about Section 8 is that the program is already severely overburdened. Most housing authorities have massive waiting lists of people who qualify for housing assistance. Many agencies have simply stopped bothering to add new names. I detailed some of this in a previous CP story.

Read the whole pathetic CBPP report here.

Posted by Paul Demko at February 18, 2005 5:33 PM

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