Bush Cuts Section 8, Again

Steven Wishnia Oct 6, 2004

After announcing on Sept. 27 that it was backing off from a proposal that would have significantly reduced rent subsidies for New Yorkers in the Section 8 voucher program, the Bush Administration went ahead and made similar cuts anyway.

The federal Department of Housing and Urban Development (HUD) drew a storm of protest after it announced plans in August to change the formula used to calculate the “fair-market rent” (FMR) for the Housing Choice Voucher Program, which subsidizes rents for 1.9 million low-income households in privately-owned buildings. In the program, commonly known as Section 8, HUD uses local housing costs to set the fair-market rent, tenants pay 30 percent of their income for rent, and the federal government pays the landlord the difference between that and the fair-market rent for the area. The proposed change would have added three counties in northern New Jersey to the data used to set the fair-market rent for New York City, instead of basing the figure on housing costs in the city alone. That would have cut Section 8 subsidies in the city significantly, especially for larger apartments.

On Sept. 27, HUD announced that it would not change the geographical formula for setting Section 8 rents for 2005, that it would only adjust them based on data from the 2000 census. But the actual figures released show dramatic cuts for New York’s 110,000 families on the program. The fairmarket rent for a two-bedroom apartment in the city has been reduced by $55 a month, from $1,073 last year to $1,018. For a onebedroom apartment, it has been cut from $944 to $915; for a three-bedroom home, from $1,342 to $1,252; and for a four-bedroom unit, from $1,504 to $1,288.

“This action could not have come at a worse time for New York City tenants,” Joshua Goldfein of the Legal Aid Society wrote in a Sept. 1 letter to HUD. He noted that this year the federal Bureau of Labor Statistics reported that housing costs rose 4.7 percent in the New York metropolitan area and the city Rent Guidelines Board allowed rent increases of up to 6.5 percent.

“HUD makes no claim that rents in New York have dropped,” Goldfein added. “Instead, it argues that previous years’ FMRs were overstated.” His letter continued, “Families with a greater number of children will bear the brunt of the reductions” and are the tenants most likely to become or remain homeless.

The changes had different effects nationally. The fair-market rent for apartments in Boston and Atlanta will go down, but tenants in Houston and Las Vegas will see more money. Some cities, including New York, may have the option of using the 2004 numbers.

The controversy over this proposal is the latest round in the Bush Administration’s attempts to shrink Section 8. In August, HUD agreed to restore some funds cut from Section 8 in the fiscal 2005 budget. But the administration has proposed even deeper future reductions, by both simple cuts and formula alterations. Its 2005 budget included plans to slash the program by 40 percent by 2009.

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