Shift in
Housing Aid Proposed
Block Grants Would Replace Federal Rent
Vouchers
By Amy Goldstein
Washington Post Staff Writer
Tuesday, April 29, 2003; Page A01
Under the plan, to be introduced today in Congress, states would get a lump
payment for housing vouchers that would carry fewer federal rules but less
predictable increases each year. States could change eligibility rules, combine
housing and welfare policies, or provide shorter subsidies administered by
religious and other nonprofit groups, as well as local housing authorities.
This effort to replace the Section 8 housing program would essentially
import to the government's most common type of rent subsidy the philosophy
behind the welfare overhaul of the 1990s: a shift away from federal control,
combined with an effort to find jobs and other means to wean low-income people
from government help.
The idea, mentioned briefly in the White House's budget for next year, has
attracted less attention than the welfare changes or a current move by the
administration to give states vast new powers over Medicaid, the public health
insurance program for the poor. But the $13 billion initiative, dubbed Housing
Assistance for Needy Families (HANF), represents an equally far-reaching
attempt to redefine the relationship between the government and low-income
Americans. It arrives in a climate in which rents have been rapidly escalating
and waiting lists for housing assistance are long.
Section 8 has been a staple of federal housing policy for nearly three
decades, supplying vouchers that are used by poor families, disabled people and
the elderly to rent apartments or houses. A renter who qualifies obtains a
voucher from a local housing authority and takes it to any private landlord
willing to accept it. The program allows participants to pay no more than 30
percent of their income in rent up to a certain limit, with the government
picking up the rest.
Among conservatives, the program has been favored more than the country's
older and somewhat smaller network of publicly owned housing, because it relies
on the private marketplace. White House budget aides last winter gave it a high
ranking in an assessment of various parts of the government.
In budget documents and interviews, however, President Bush's aides said
that Section 8 is, as one official put it, "fundamentally flawed."
Locally, housing advocates and agencies say the program has been strained to
keep up with the growing demand for affordable housing. Section 8 waiting lists
have been swelling and federal rent limits have not kept pace with market-driven
rents.
In Montgomery County, more than 3,400 families receive Section 8 vouchers,
while about 4,400 are on waiting lists. In Fairfax County, there are 3,400
families with vouchers and an additional 5,100 on a waiting list. In the
District, the number of families receiving vouchers has climbed to more than
10,000 in four years.
Whether the administration's proposal would improve such a situation is
disputed.
But administration officials said it would be simpler for the Department of
Housing and Urban Development to give grants to 50 states than to manage
contracts, as the agency does now, with about 2,500 housing agencies. Officials
said the switch would alleviate a long-standing problem in which about one
voucher in 10 is not used. Moreover, they said, states could mesh housing
programs with welfare services such as job training and child care intended to
help poor families become self-sufficient.
"The idea that you can set rents for the nation, run it from [HUD
headquarters on] Seventh Street here in D.C. is ludicrous," the official,
who spoke on condition of anonymity, said in explaining the thinking behind
HANF. The acronym rhymes with that for the renamed welfare system, Temporary
Assistance for Needy Families (TANF), in an apparent strategy to borrow the
spirit and popularity of that system, which was turned over to the states seven
years ago.
Even before the plan is introduced, its basic contours are drawing
skepticism on Capitol Hill and among some housing policy specialists. For one
thing, critics point out that 17 states have no agency with any experience in
housing vouchers. Others question whether, for a president eager to cut taxes
and federal spending, the plan is a subtle route to shrink HUD by reducing its
work.
Much of the wariness the idea has elicited was reflected in a letter
circulated this month by Virginia's two GOP senators, John W. Warner and George
Allen, who collected signatures from 42 colleagues, including eight other
Republicans. "We believe that such a proposal could seriously undermine
the voucher program and could potentially harm the millions of low-income
people assisted with housing vouchers," according to the letter addressed
to HUD Secretary Mel R. Martinez. It said the plan "will merely add
another layer of administration to the program" because states probably
would contract with local housing authorities.
But according to congressional sources, the pair of senators decided not to
send the letter, at the request of administration officials who asked them to
withhold any critique until they see the full plan.
Democrats almost uniformly oppose the plan. A few GOP governors and members
of Congress have praised the idea publicly, yet some key Republicans have
withheld support or criticized the plan outright.
Rep. James T. Walsh (R-N.Y.), chairman of the House Appropriations
subcommittee that deals with housing, said that Congress last year took steps
to curb the waste of unused vouchers -- one of the administration's
justifications for block grants. "I think we need to give that a chance
before we make another substantial change," Walsh said. Besides, in
determining how vouchers are allotted to communities, "I'm not prepared to
make the leap of faith that states will handle this as fairly as HUD," he
said.
A senior Republican Senate appropriations aide said the plan could produce
an unfunded mandate and "an extra layer of bureaucracy and administrative
costs."
Until now, partisan disagreements over Section 8 have involved whether the
country could afford to expand the supply of vouchers -- because only one of
four eligible families currently can get help -- not whether the program should
be fundamentally recast.
But a few outside conservatives have persuaded the White House that Section
8 is out of sync with other social policies for the poor. Howard Husock, a
researcher at Harvard's Kennedy School of Government who is affiliated with the
conservative Manhattan Institute, called it the "last redoubt of
non-time-limited public assistance."
Michael Liu, HUD's assistant secretary for public and Indian housing, said
the proposal would not compel states to adopt the main features of the revamped
welfare system -- time limits and requirements that poor parents get a job --
although states could create such rules if they chose.
Liberals say the analogy of housing aid to welfare is misguided. They note
that recent HUD figures show that just 13 percent of the households with
Section 8 vouchers depend on welfare, while 35 percent get most of their income
from jobs and the largest group relies on disability or retirement benefits.
"The notion there is this group of people they have to force off of
assistance into the workforce is erroneous," said Sheila Crowley,
president of the National Low Income Housing Coalition. "These are people
who have income, but it's insufficient to be able to afford housing in
America."
She and other critics predict one of the program's essential features -- an
emphasis on help to the truly poor -- could be undermined. Liu, of HUD, said
that the proposal would keep a rule that 75 percent of the vouchers must go to
the "extremely poor" but that states could ask for permission to
reduce that to as low as 55 percent.
Perhaps the biggest fear, however, involves whether block grants would keep
pace with escalating rents. Barbara Sard, of the Center on Budget and Policy
Priorities, predicted that states eventually could be forced to choose between
giving vouchers to fewer people or to those with somewhat higher incomes, who
are less expensive to subsidize.
Administration officials counter that, in a still-unspecified way, they
would take housing costs into account in asking Congress for appropriations
each year and that the grants would improve subsidies by giving states freedom
to provide different amounts in different neighborhoods of the same city.
In the Washington area, Maryland Gov. Robert L. Ehrlich Jr. (R) said,
"It's a new federalism, and . . . I would love that. We would accept the
challenge." On the other hand, the deputy press secretary to Virginia Gov.
Mark R. Warner (D), Kevin Hall, said: "We're concerned about the cost of
administering the program at the state level. . . . Medicaid springs to mind as
an example of the feds making big promises at the front end, but not following
through with promised resources."
A preview of the changes the administration envisions already is evident in
several communities across the country, which were given freedom in the late
1990s from many Section 8 rules.
One of the farthest reaching such experiments is taking place in the two
southern counties of Delaware, where the Delaware State Housing Authority four
years ago combined its waiting lists for housing vouchers and public housing
and gave each family that gets assistance a deadline for getting off -- first
three years, later extended to five. The program, with 650 families, refers
recipients to services like those for people on welfare, including
transportation, child care and job training. And it requires that adults who
are not elderly or disabled go to school or hold a job.
In the only rule of its kind in the country, families are penalized for
failing to follow the rules.
Ken Smith, a director of a statewide low-income housing advocacy group, said
the changes have been "a nightmare for residents." He said that some families
have dropped out or quit waiting lists, while others have found jobs, but not
enough income to afford unsubsidized rents. But Cathy Gregory, the housing
authority's chief operating officer said, "I think that people are
genuinely excited. They think there is hope."
Staff writer Fredrick Kunkle contributed to this report.
© 2003
The Washington Post Company