HUD has merged the Section 8 certificate and voucher programs into a single ”Housing Choice Voucher” program. Under this program, the method of setting the maximum value of the voucher has also changed. The “Voucher Payment Standard” or VPS, is determined locally by the housing agency issuing vouchers in its jurisdiction (the local Housing Authority). HUD advertises this “Housing Choice Voucher” as a wonderful thing for lower income renters. However, in many communities, the negatives far outweigh the positives:

SETTING THE VOUCHER PAYMENT STANDARD

Every year, HUD publishes a set of “Fair Market Rents” (FMRs) for each metropolitan area in the nation and for the non-metro areas of each state; FMRs are established for various unit sizes based on a survey of recent moves into dwellings in standard condition, i.e., habitable and up to code. HUD determines the 40th percentile rents for various apartment sizes (40% of all units surveyed have rents below this amount, 60% have rents above it); these are the FMRs. Until 1995 the FMR level was the 45th percentile and before that it was 50%.

The term FMR is somewhat misleading because “rent” actually means “housing cost”. Housing cost is the rent plus utility costs (not including phone and cable). Most apartments advertise a rent that does not include the utilities so the actual “housing cost” is higher than what is advertised.

Within limits, the local agencies have the authority to set the maximum amount of rent that a voucher will cover. They can set it anywhere between 90% and 110% of the FMRs. Going above or below these limits requires approval from HUD.

WHAT THE VOUCHER HOLDER PAYS

Using vouchers, tenants pay 30% of income towards the rent; the agency issuing the voucher pays the landlord the rest, up to the Voucher Payment Standard. If the rent exceeds the VPS, the tenant must pay the extra amount out of pocket.

However, a family may not pay more than 40% of income for rent when they first receive one of these new vouchers or any time they move to a new unit. If the rent increases above the 40% of the family’s income after the initial lease period, they may remain, but will have to pay any increase out-of-pocket, pushing their housing cost past 40%.

This provision excludes a large number of low income tenants from many rental units, including units that they have been in for years as certificate holders. (With Section 8 Certificates, the rent could not go over the FMR at all). Housing Authority staff have witnessed the problem that more and more apartment seekers have with this 40% limit as they are unable to lease a unit because the rents are so high. Furthermore, setting a 40% of income limit carries an implication that this cost burden is acceptable. For many fixed income Voucher holders, 40% of their income is just too much to pay (medications can cost as much as a persons rent!).

One wonders how long it will be before 40% of income becomes the new definition of “affordable housing”.

RENT REASONABLENESS?

The local Housing authority may not approve an assisted tenancy (use of a voucher) until it determines that the initial rent as well as any rent increases are reasonable in comparison to rents for other comparable, unassisted units in the sub-market. This means that the local Housing Authority is responsible for seeing that the landlord does not charge the voucher holder more than what he/she could get on the open market.

If the rent is seen as “unreasonable’ then the Housing Authority cannot approve the unit and the voucher holder is out of luck (and out of a home!).

And if, using this new voucher formula, HUD determines that a significant number of the Housing Authorities’ assisted households (voucher holders) are rent burdened (paying an excessive percentage of their income for rent), they are required to try to address the problem.

CHANGING THE NUMBERS IN THE FORMULA

There are two ways that a Housing Authority can ‘make the numbers’ work better for their voucher holders:

1. Ask HUD to increase the FMR (this has been done for the Bay Area). This means that the number which sets the upper limit for what rent the Housing Authority will accept is raised.
2. Increase the percentage of the FMR that is used (from 90% to 110% to 120% or more).

Both of these steps have been taken and approved by HUD for the City of Berkeley.

PORTABILITY

One of the aspects of the Voucher that HUD has bragged about is that it is more ‘portable’ than the Section 8 Certificate. With some limitations, the Section 8 Voucher Holder can move anywhere he/she wants as long as there is a Housing Authority there. While this sounds great, it means that many Voucher Holders will have to move out of the community they want to live in and move elsewhere. Partly because there will be less interest in trying to find landlords to participate in the program and keep the Vouchers in the host community.

MORE HOUSING CHOICE

Another aspect to the Voucher that is being boasted about is that by allowing a Voucher holder to pay up to 40% of their income on the rent (for the first year, who know what the rent will be after that!) there will be more units to chose from. Unfortunately, for the lowest income households, no real choice has been opened up. 40% of their income means not paying utilities or for medicine.

NO VOICE

It seems that with each piece of federal legislation the Section 8 recipient carries a larger and larger burden:

• Decrease in the FMR from 50% to 40% (this means that the allowable rent limit is lower so that there are actually less units for the Voucher holder to chose from). Increase of the ‘rent burden’ (for the Voucher holder) from 30% to 40%.
• Removal of a cap on the rent burden for the second year and beyond (this means that if the rent goes up the after the first year, and the increase is ‘reasonable’ the Voucher holder must pay the difference or lose his/her home.
• Portability can be used to ‘get those people out of here’ and transfer ‘poor’ people to outlying communities. (Local communities have less incentive to try and accommodate all income levels in their housing plans and use of resources.)

Mush of this legislation has been allowed to pass without the benefit of accurate information, “voucher stakeholders are not sufficiently organized as an interest group”( Scarcity and Success: Perspectives on Assisted Housing. Manely and Crowley. 1999.)