Revised August 7, 1998 Mandatory Delay in Reissuance of Vouchers
Results in up to 40,000 Fewer Families
Receiving Housing Assistance Each Year
For the past three years, the appropriations bills that contain the HUD programs have included a measure that reduces the number of low-income families provided housing assistance. This year, the Senate appropriations bill would eliminate the three-month delay, while the House bill would retain it.
In the absence of new funding for incremental assistance, housing assistance only becomes available to new families as others leave the program; as former recipients leave the program, rental subsidies are made available to new families. Under the provisions of the annual appropriation legislation, however, housing authorities are required to delay the reissuance of these turnover housing vouchers and certificates for a period of three months. The three-month delay means that about one-fourth of all turnover vouchers and certificates are pulled out of circulation each month. As a result, up to 40,000 fewer low-income families are provided housing assistance each year.
Although sometimes pictured as merely an administrative matter, continuation of the delay would extend a cutback in the number of families provided tenant-based assistance at the same time that low-income housing needs in the United States have reached an all-time high.
- Tenant-based vouchers and certificates are used by families to rent apartments in the private market (as distinguished from units in housing projects). They can be particularly valuable to poor families moving from welfare to work as they can enable families to move closer to a work site or to an area with better job opportunities and transportation networks. By improving the housing choices for low-income families, these vouchers also can promote the deconcentration of poverty.
- Nationally, approximately 165,000 Section 8 certificates and vouchers become available each year due to participant turnover.(1) These newly available subsidies do not represent an increase in the number of housing subsidies but rather the transfer of an existing subsidy from one family to another. Turnover occurs when a family leaves the program, which can happen when a family's income rises above the program's eligibility limit, when a change in a family's situation such as a marriage removes the need for the subsidy, when a family is removed for non-compliance with program rules, or for other reasons.
- About two-thirds of these available vouchers are issued to poor or near-poor families with children. Many of these families are currently making the transition from welfare to work.
- The other one-third of these available vouchers are issued to elderly or disabled individuals or couples.
- Some of these subsidies are provided to families that have become homeless due to domestic violence or natural disasters. Victims of such crises are provided housing vouchers so they can move out of temporary shelters. Scarce shelter spaces are opened up for other homeless or endangered persons. Victims of domestic violence can move into housing of their own and achieve independence from their abuser.
The current three-month delay in reissuing certificates and vouchers means in effect that for one-fourth of the year, turnover subsidies are not used by any family. This is equivalent to reducing by about one-fourth approximately 40,000 the number of families receiving housing subsidies at any given point in time. Such a reduction in the number of certificates and vouchers is not limited to specific areas, but affects housing authorities and needy families across the nation.
- The reduction in the number of Section 8 certificates and vouchers increases waiting times for receipt of housing assistance for families with pressing housing needs. As of 1996, families receiving tenant-based assistance waited an average of 25 months for tenant-based housing assistance.(2)
- The reduction in the number of Section 8 certificates and vouchers in use at any time means that fewer working poor families and fewer families making the transition from welfare to work are provided housing assistance. Similarly, a reduction in the number of newly available Section 8 certificates and vouchers means that families in temporary shelters must wait longer before they are provided housing assistance.
This places increased strains on costly emergency shelter programs and means victims of crises may experience prolonged homelessness.
Impact of the Three-Month Delay on Three Public Housing Authorities
In Los Angeles, the three-month delay policy has resulted in the loss of 700 certificates and vouchers at any given point in time. As a result, the Los Angeles housing authority has had to scale back significantly its assistance for homeless families. The housing authority estimates that the number of homeless persons provided housing vouchers fell from 1,000 to 600, largely due to the implementation of the three-month delay. In addition, the housing authority estimates a loss of about $500,000 a year due to the reduced administrative fees resulting from the delay.
About 300 fewer families are provided vouchers and certificates at any given time by the New Jersey housing authority. Even before the delay was implemented, the average wait for families receiving assistance was close to three years in New Jersey. The New Jersey housing authority estimates that the delay also costs it about $250,000 a year due to the loss of administrative fees.
The Portland, Oregon housing authority estimates that approximately 180 fewer families are provided vouchers and certificates each month, due to the three month delay. This further limits its ability to serve the 3,200 families on its waiting list. The housing authority estimates a loss over of more than $70,000 a year in administration fees.
- Despite a growing economy, the number of poor and near-poor renters with "worst case" housing needs (those who pay more than 50 percent of income for rent or living in severely inadequate housing) is 5.3 million, an all-time high. Although more people have jobs, more working families face severe rent burdens, as rental costs have generally risen faster than wages.(3) Reductions in federal housing assistance limits the nation's ability to address these growing housing needs.
The three-month delay also places undue burdens on public housing authorities. Under the Section 8 program, housing authorities receive administrative fees from the federal government for families that rent housing with a tenant-based voucher or certificate. As housing authorities are prohibited from promptly re-issuing available housing vouchers and certificates, they lose thousands of dollars in administrative fees. This may force housing authorities to scale back their services, such as housing search assistance to families looking for housing and services to help families improve their chances of gaining employment and self-sufficiency.
Until 1995, the supply of tenant-based Section 8 subsidies had been increased every year since the program's inception. In 1995, there was no expansion of the certificate and voucher programs as a result of budget constraints. The annual HUD appropriations acts from fiscal years 1996 through 1998 mandated a three-month delay in the re-issuance of turnover vouchers and certificates. This provision of these appropriations acts effectively reduces assistance at a time when the shortage of affordable housing is at an all-time high and the need for low-cost housing on the private market that is accessible to job opportunities has increased. A continuation of the three-month delay is inadvisable.
1. Based on HUD data, there are approximately 1.5 million households receiving tenant-based Section 8 rental assistance. HUD estimates that 11 percent of the tenant-based certificates and vouchers turn over each year. CBO estimates that 10 percent of tenant-based certificates and vouchers turn over each year.
2. Office of Policy Development and Research. U.S. Department of Housing and Urban Development. A Picture of Subsidized Housing. Volume 11:16.
3. Office of Policy Development and Research, U.S. Department of Housing and Urban Development, Rental Housing Assistance The Crisis Continues: The 1997 Report to Congress on Worst Case Housing Needs, April 1998.
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