August 24, 2005

Senate Bill’s Proposed Funding Policy Would Distribute
Funding More Efficiently and Restore Program Stability
By Barbara Sard, Douglas Rice and Will Fischer

Executive Summary 

Press Release: HTM | PDF
Report: HTM | PDF
State-by-State Fact Sheets
Summary Appendix: HTM | PDF
National Summary Table
   "How Would Your Housing Agency Fare"
NLHA Sign-on Letter
Highlights Package, 7pp.

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Since 2002, Congress and HUD have implemented a series of substantial changes in funding policy for the “Section 8” Housing Choice Voucher Program.  These changes have been driven in part by concerns over the rising costs of the program.  Those concerns have been overblown, according to an analysis of HUD’s recent voucher cost data.  Moreover, the year-to-year changes in funding policy, along with a funding shortfall in 2005 and, at times, poor implementation by HUD, have produced a series of troublesome effects: funding instability and shortages among state and local housing agencies, a decline in the number of vouchers leased, and growing fears among landlords that the program is unreliable.  The results have been damaging to the voucher program, as well as to the two million low-income families that rely on voucher assistance.

Congress’ challenge for fiscal year 2006 is to restore stability to the voucher program.  This challenge includes two major goals: first, to restore funding for vouchers that have been lost in 2004 and 2005; and second, to implement a stable voucher funding policy that will distribute funding to public housing agencies equitably and efficiently over the long term.

To their credit, both the House and Senate Appropriations Committees have acknowledged these challenges, and have attempted to meet them in their HUD funding bills for 2006.  Both bills would provide a sizeable increase in voucher funding in 2006, with the goal of restoring at least some of the voucher funding that was lost in 2005.  In addition, each bill proposes modifications of funding policy for 2006 that aim, at least in part, at improving upon the shortcomings of the past few years.

Our analysis of recent HUD data shows that, while the House bill falls far short of these goals, the Senate bill – and, in particular, the Senate-proposed voucher funding policy – would provide a solid foundation for the efficient distribution of voucher funding in coming years.  Our key findings are as follows:

A table comparing the key provisions of the two bills and the final fiscal year 2005 appropriations bill is included as Appendix 1.

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