HUD limits aid to low-income renters in area
Date: 1 October, 2004
The Bush administration today will begin cutting aid to subsidized low-income renters in the Portland area by as much as 10 percent, a move that housing advocates fear could force some renters from their homes and create pockets of poverty in the region.
The cut results from an annual review of rents paid by the Department of Housing and Urban Development through its Section 8 voucher program. Until today, HUD paid as much as $795 a month for rent and utilities at a two-bedroom apartment in the six-county region. The new limit is $717.
Area housing officials who administer the Section 8 program said the new limits come as demand continues unabated for affordable housing. The officials said they probably will reduce assistance to current voucher holders, even as waiting lists grow longer.
The cuts ultimately could affect more than 14,500 voucher holders in the region, which includes Multnomah, Washington, Clackamas, Yamhill and Columbia counties in Oregon, and Clark County in Washington. Officials from Washington and Clackamas counties said they aren’t yet sure of the potential impact of the new limits.
The greatest impact will be to Section 8 voucher holders who live in close-in, core areas where rents tend to be higher. The cuts could displace low-income people into lower rent areas, concentrating poverty in areas that are farther from employment and educational opportunities, said Ian Slingerland, director of the Community Alliance of Tenants, a renters’ rights organization.
The primary culprit that has forced a downward adjustment, according to HUD officials, is the region’s soft rental market. Agency surveys show that rents have dropped in sync with the sluggish economy of recent years, as well as a strong home sales market that has turned some renters into homeowners.
HUD will boost or hold steady its benchmark limit for a two-bedroom apartment in 139 of the nation’s 193 largest metropolitan areas, The Oregonian has found. But of the 54 scheduled for cuts, only five fared worse than the Portland, Salem and Seattle areas. HUD also cut limits for one-bedroom and three-bedroom units in the three Northwest metropolitan areas.
Changes affect landlords
The changes affect landlords as well as renters, housing advocates said. For landlords, the new limit will mean lower payments from HUD, if rent and utilities are greater than $717 a month. For renters, the change could mean higher monthly costs or, in the worst-case scenario, an eviction notice from a landlord who chooses to quit the program rather than reduce rent.
HUD is required to update its “fair market rent” limits by Oct. 1, the start of the federal fiscal year. Limits typically grow each year, and yearly increases in the Portland area have averaged about 4 percent over the past 20 years, according to HUD data.
HUD uses local market surveys to make its annual adjustments. But every 10 years, it also incorporates new Census data, which tend to produce greater swings. Nevertheless, the cuts imposed by HUD — in the Portland area and across the country — appear to be unprecedented, according to The Oregonian’s analysis.
The last time new Census data were incorporated, under the Clinton administration in 1995, five metropolitan areas saw cuts of more than 5 percent — the benchmark limit for a two-bedroom apartment. This time, 27 areas will see similarly steep cuts.
Some advocates for low-income housing suspect that the cuts in HUD rent limits are part of a Bush administration plan to gut the Section 8 program. The White House budget office has proposed spending $18.5 billion in 2005, down from $19.3 billion, and converting the program into a block grant.
But local housing advocates argue that HUD’s method is skewed to reflect trends for middle-income and upper-income renters. The market for low-income housing has been tight all along, they said.
Source: Jim Barnett