HUD
RESPONSE TO CENTER REPORT FAILS TO REFUTE FINDING THAT
ADMINISTRATION’S BUDGET REQUEST WOULD RESULT IN LARGE REDUCTION IN NUMBER
OF LOW-INCOME FAMILIES WITH HOUSING VOUCHERS
By
Barbara Sard and
Will Fischer
On
July 11, 2003, the Center on Budget and Policy Priorities (CBPP) issued an
analysis estimating that, if additional funds do not become available, the
Administration’s fiscal year 2004 budget request for the housing voucher
program would result in a shortfall of $1.26 billion dollars and fail to
fund approximately 184,000 vouchers expected to be in use at the beginning
of the fiscal year. Such a reduction would fall primarily on working
families and elderly and disabled people, who together make up 70 percent
of the population that the voucher program serves. On July 14, the
Department of Housing and Urban Development issued a statement to
reporters entitled “Housing and Urban Development Says Center’s Report on
Housing Choice Vouchers (Section 8) Funding Erroneous.” The text of the
statement in its entirety reads as follows:
The Center’s report uses incomplete data to
draw erroneous conclusions.
Over the past two years Housing and Urban
Development has substantially increased funding for the Housing Choice
Voucher Program to assist families in need. In fact, the Department’s FY
2004 budget requests $990 million more than is currently being funded for
the program that houses more than 1.9 million families.
The Department remains
committed to ensuring the Housing Choice Voucher program serves low-income
families across
America.
The statements in HUD’s response are both
misleading and essentially irrelevant to the central points and findings
of the CBPP analysis. Moreover, HUD fails to provide any facts or
analysis substantively contesting the CBPP analysis.
-
The CBPP analysis is based
on HUD data that are the most complete and timely data available.
The
CBPP analysis used data on the number of vouchers in use, and the
average cost of these vouchers, that were collected by HUD itself in
March and April 2003 from housing agencies across the country that
administer nearly all federal housing vouchers. These are the same data
that HUD uses to determine the amount of funding to be distributed from
the federal treasury to housing agencies to administer their voucher
programs. These data, which are the most recent HUD has made
available, cover the period from August 2002 through January 2003.
(HUD has since collected data on voucher use and costs for the period
from February through April 2003, but HUD has neither provided these
more recent data to Congress nor issued any analysis of their
implications for the voucher program’s funding needs.) By comparison,
the Administration’s budget request, submitted in February 2003 and
developed last fall, relied on the cost and utilization data available
at that time, which are now quite outdated and are from as far back as
fiscal year 2001.
- The funding that would
be made available to renew existing vouchers under the Administration’s
budget request would exceed the amount provided for this purpose in fiscal
year 2003 by $170 million — an increase of about 1.4 percent — rather than
by the $990 million claimed in the HUD statement. This 1.4 percent
increase is insufficient to cover increases in rental charges and in the
proportion of vouchers Congress has authorized that actually are in use.
The $990 million increase cited by HUD evidently compares the total of
$13.61 billion requested by the Administration for the voucher program
account in fiscal year 2004 with the $12.69 provided by Congress in fiscal
year 2003. The use of this comparison in the HUD statement is misleading
in several respects.
–– The $13.61 billion requested by the
Administration includes $500 million in program funding from previous
years that the Administration counted upon being available in 2004 when it
developed its budget request but that was rescinded in late February,
after the budget was submitted, and thus is no longer available. (Congressional
action to rescind these funds was based on assumptions at that time that
the funds would not be needed.) It is possible that additional funds from
previous fiscal years could become available, but the Administration has
given no indication that this is likely to be the case.
–– In addition, the Administration’s budget
included $560 million requested for purposes other than renewal of
existing vouchers, such as capacity building grants for states and new
tenant protection vouchers for families that lose housing assistance under
other HUD programs.
–– When these funds are set to the side, the
amount available to renew existing vouchers under the Administration’s
request would be $12.55 billion, compared to $12.38 billion provided for
this purpose in fiscal year 2003. This is an increase of $170 million, or
1.4 percent.
-
HUD’s response does not
indicate whether the Administration intends to seek funding for all
vouchers in use and, if so, what amount of funding that requires.
The key question is not whether the level of funding in 2004 is
higher than the level in 2003, but whether sufficient funding is provided to
maintain the federal government’s longstanding commitment to continue
support for all vouchers in use. Both the number of vouchers in use
and the average cost of these vouchers will be higher in fiscal year 2004
than in fiscal year 2003. HUD has not provided any analysis, based on more
current data than the now-outdated data it used when developing its budget
request last fall, that indicates how much funding will be needed in fiscal
year 2004 to support vouchers in use, despite the fact that HUD and OMB now
have data that are much more up-to-date than the data available at the time
the 2004 budget was submitted.
