Federal Housing Policy Shift and Local Challenges Chip Halbach Minnesota Housing Partnership Septemb

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Federal Housing Policy Shift and Local
ChallengesChip HalbachMinnesota Housing
PartnershipSeptember 23, 2005
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HousingMinnesota

• Housing Minnesota is a statewide multi-year
  public education and public policy campaign
  bringing together diverse constituencies to
  promote and achieve Homes for All
• HousingMinnesota operates as a program of
  Minnesota Housing Partnership

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Minneapolis Foundation ProjectMinnesota Where
Are We Going?

• HousingMinnesotas Project
• Public policy work on the issue of proposed cuts
  to Section 8 Housing Choice Voucher program
• HousingMinnesotas work focuses on
• Media placement
• Constituent organizing work

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What are Housing Choice Vouchers?

• Vouchers pay the difference between a 30 of a
  households income and their rent
• Vouchers provide flexibility because voucher
  holders choose their own privately-owned unit
• Vouchers are targeted for households earning 30
  of area median income or below
• In Minnesota, this translates to households
  earning below 23,100 -- 16,300 for Minnesota
  households

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Federal Housing Programs

• Housing Choice Vouchers
• Approximately 2.1 million authorized vouchers
  nearly 2 million vouchers currently utilized.
• 30,668 authorized vouchers in Minnesota housing
  authorities are funded to issue 29,470 vouchers.
• Public Housing
• 1.2 million households
• 22,065 households in Minnesota
• Project-based units
• 1.4 million households
• 33,307 households in Minnesota

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Who Is Helped by Housing Vouchers?
Source Center on Budget and Policy Priorities
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Housing Need

• Only about 1 in 4 households that are eligible
  for vouchers receive any form of federal housing
  assistance
• In Minnesota, there are 81,230 extremely low
  income renter households paying more than 50 of
  their income toward their housing costs

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Section 8 Budget Authority as a Percentage of HUD
Discretionary Total, Fiscal Year1996-2004
Source CBPP
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Context for ReformVoucher Program Costs
Increasing

• Hot housing market and cooling economy over the
  last several years resulted in a temporary
  increase in voucher costs
• Congress chose to expand the program but few new
  vouchers have been added since 2002
• Successful efforts to reduce the number of
  vouchers left unused
• Vouchers have taken an increasing portion of the
  HUD budget because other programs have been cut
  while voucher funding remained constant

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Voucher Program Under Assault

• 2003 Housing Assistance for Needy Families
• 2004 Flexible Voucher Program
• 2004 Retroactive Funding Cut
• 2005 State and Local Housing Flexibility Act
• 2005 Appropriations for FY 2006

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2003 Housing Assistance for Needy Families

• Convert voucher program to a state-run block
  grant
• Eliminate existing funding structure where
  housing authorities are funded based on actual
  program cost
• Risks to program
• Reduce number of families assisted
• Shift housing assistance to higher-income
  families
• Shift rental burdens to families

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2004 Flexible Voucher Program

• Block grants provided to housing authorities
• Housing authorities able to set rents using local
  rental market data
• Risks to program
• Reduce number of families assisted
• Shift housing assistance to higher-income
  families
• Shift rental burdens to families

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2004 Retroactive Funding Cut

• Housing authorities absorbed cuts by
• Reducing payment standards
• Limiting portability
• Attrition
• Funding from other sources
• Raising minimum rents
• Restricting portability

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2005 State and Local Housing Flexibility Act

• Housing authorities authorized to
• Shift targeting to higher income families
• Simplify rent structure
• Create time limits
• Restrict portability
• Curtail enhanced vouchers
• Simplify income certification
• Institute budget based funding approach
• Institute Moving to Work

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HousingMinnesota Position

• Principles for reform of the federal rental
  voucher program
• Maintain program targeting to those with
  extremely low incomes
• Provide administrative flexibility that reduces
  program administration costs but does not harm
  tenants or program goals
• Provide funding in amounts sufficient to fund all
  authorized vouchers

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2006 Appropriations Vouchers

• Presidents request
• 11.5 reduction to overall HUD budget
• 15.85 billion for Section 8
• Restores half of voucher lost in last years cuts

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2006 AppropriationsVouchers
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Minnesota Impact2006 Appropriations

• House voucher budget calculation would cause
  Minnesota to lose 181 vouchers
• House bill calculates voucher cost based on
  3-month average
• Senate voucher budget calculation would cause
  Minnesota to lose 82 vouchers
• Senate bill calculates voucher cost based on
  12-month average

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Where things now stand

• Amendment passed Senate Sept. 14 provides 3.5
  billion in emergency vouchers to assist survivors
  of the Katrina disaster
• HUD budget will possibly be inserted in omnibus
  spending bill in the Senate

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Where things now stand

• HUD Fair Market Rents
• August 25 HUD notice Twin Cities no longer
  qualify for 50th percentile rents.
• Twin Cities FMRs will be set at 40th percentile
  (The dollar amount below which 40 of standard
  quality rental housing falls.)
• 0 bedroom reduced from 619 to 598
• 1 bedroom reduced from 725 to 705
• 2 bedroom reduced from 882 to 855
• 3 bedroom reduced from 1,168 to 1,119
• 4 bedroom reduced from 1,318 to 1,258

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For more information

• www.cbpp.org
• www.nlihc.org
• www.housinglink.org
• www.homelinemn.org
• www.housingminnesota.org