2005 Federal Budget Proposes Severe Cuts for the Housing Voucher Program

The Administration's new budget proposal would cut funding for the Voucher program in 2005 by more than $1 billion below the 2004 level. The proposal includes even sharper cuts for subsequent years through 2009. The cuts are part of a huge package of reductions to discretionary spending programs including cuts to veterans medical benefits, education/training, the environment, and health.

The Voucher program cuts could leave 10,300 Ohioans without the Voucher benefits they now are receiving, and loom as the most dramatic in the 30-year history of the Voucher program. Nationally, 250,000 people who are now assisted under the Voucher program could lose assistance in 2005.

The budget also would make radical changes in the program's structure. It  would replace the current program with a block grant scenario. The program now funds a housing authority for serving a certain number of families, called a "baseline." Congress has traditionally pledged adequate funding to serve that number of families, and (along with HUD) has been critical of housing authorities who do not maintain lease-up numbers near that baseline. As a result, HA's including this one, have followed lease-up rates closely, and have taken steps to move families through the system as quickly as possible in order to get them "on the street" with a Voucher and
under lease in order to keep lease-up rates maximized. TMHA's current lease-up rate is 99.5%.

The new budget would drastically change that approach. The proposed program is called the "Flexible Voucher Program," and would become "dollar-based" rather than "number-based." HUD would give a housing authority a block of money with a directive to serve as many if not more families than before. The proposal has made clear that HA's should not just serve fewer families with less money.

The proposal includes some regulation concessions to make the program easier to run. For instance, HA's would not have to recertify every family every year, and would not be required to complete an annual inspection on every unit every year.

The regulation concessions are welcomed. Over the years the program has continued to get over-layered with more complex regulations. However, the concessions may go too far from the basic program goals to serve low income families, and the proposed plan slashes administrative fees because of "efficiencies" resulting from the reduced regs. HA's will not be able to effectively run the program and be available to serve all clients and owners.

The new program is not being received positively by housing authorities, landlord associations, and housing groups who provide services to low income clientele. The main complaint is that it repeals basic protections for low-income families that were developed on a bipartisan basis for decades. The block-grant proposal also would leave the program vulnerable to substantial further funding erosions over time, as has been the case with other block grants. The block-grant scenario does not respond to
economic changes like those the country has seen recently. When families lose income, subsidies to owners go up, and the program costs more. Under a block-grant, no supplemental funding would be appropriated to account for that.

Groups opposed to the Flexible Voucher Program point out that the current program has been a HUD success story. In 2001 the Congressionally-mandated Millennial Housing Commission conducted a review of federal housing policy. It concluded that the Voucher program was "flexible, cost-effective, and successful in its mission" and recommended that it continue to serve as the "linchpin" of federal housing policy. Critics of the proposal say if it isn't broken, it doesn't need fixing. The changes to ease regulation burdens could be accomplished without gutting the whole program and
reducing funding.

We at TMHA believe you should be aware of the possible impending changes and the active fight to oppose the changes. What happens at the federal level will affect our funding and services locally.

If you have comments about these changes, we recommend you inform our federal legislators.

Congressman Bob Ney, our representative, is a powerful House member in regard to housing issues.
Phone is 1-202-225-6265 (DC); local 330-364-6380
Fax number is 1-202-225-3394 (DC); local 330-364-7675
E-mail is bobney@mail.house.gov

Senator Michael DeWine:
Phone 1-202-224-2315 (DC); 1-614-469-6774 (Columbus)
Fax 1-202-228-6519 (DC); 1-614-469-2982 (Columbus)
E-mail is dewine@dewine.senate.gov

Your voice will make a difference. Congressmen will want to know the comments and opinions of participating owners.

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