Fed Sequester On Subsidized Housing Affecting Thousands Of City Residents

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City tells families in Section 8 program to downsize apartments or pay more rent

By Stephen Witt

The sequester in Washington has forced the city’s Department of Housing Preservation and Development (HPD) to adopt new regulations on residents living in Section 8 subsidized housing to downsize to smaller apartments or risk paying more money.

Section 8 vouchers is a federal program administered by HPD, in which low-income residents pay a third of their income for rent and the rest of the money is paid by the program.

Among those facing downsizing are seniors living alone who must move from a one-bedroom to a studio, single parents with one child from a two-bedroom to a one-bedroom, and parents with two children from a three-bedroom to a two-bedroom apartment.

HPD’s Section 8 program is the fifth-largest in the United States and administers roughly 33,000 Section 8 vouchers in all five boroughs. Over 9,000 landlords currently participate in the program.

According to an HPD source, the federal sequester slashed HPD’s Section 8 budget by about $35 million this year. Even after spending down all of the agencies existing Section 8 reserves to try and offset the effects, HPD will still have a significant deficit for this calendar year.

The agency projects the federal government to cut about $40 million for 2014 and for every subsequent year if Congress does not end the sequester.

The initial $35 million cut for 2013 equates to roughly 2,900 voucher-holding families, but will not affect any of them this year as HPD spends down its reserves.

However, HPD expressed grave concerns about 2014 and beyond after the reserves are spent. If the sequestration continues unabated by Congress, the loss of funding for HPD will equal about 3,300 households annually that will not be able to get Section 8.

So the HPD source said to stretch the Section 8 budget going forward and not be forced to rescind vouchers from about 2,900 families this year, and 3,300 families going forward they have adopted the new regulations.

“These measures of asking people to relocate to smaller apartments with less expensive rent, or if they choose to stay in the larger apartment to pay more rent, are part of the steps we are taking to reduce the risk of terminating vouchers currently received by these families,” said an HPD spokesperson in an e-mail. “Terminating vouchers is the last thing we want to do and we are resolute in trying to avoid that.”

In the face of the new regulations, some seniors, disabled and low-income tenants participating in the Section 8 program formed the Housing  Coalition Against Downsizing (H-CAD), which charges HPD can utilize other ways to close the federal shortfall instead of focusing on downsizing the old, ill and vulnerable.

 

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