Section 8 program may run out of money

From the NY Times:

Because of a $45 million budget gap, the New York City Housing Authority may have to revoke rental-assistance vouchers from more than 10,000 low-income tenants, a drastic move that could cause families to lose their apartments.

The federal government gave the housing authority less money for the voucher program, known as Section 8, than the authority expected. But the authority made matters worse by continuing to issue new vouchers until December, eight months after the government warned it to stop doing so because the program was likely to run a deficit.

Michael P. Kelly, the authority’s general manager, said that terminating vouchers would be a last resort. The authority has not decided who might lose their vouchers, but if the deficit is not closed, the cuts could begin this summer.

The agency is seeking federal and state funding to avert the voucher cuts. But the state is facing a huge deficit. Sandra Henriquez, an assistant secretary of the Department of Housing and Urban Development, said that HUD would review the housing authority’s books, but she added that “they cannot and should not expect that the federal government will cover the shortfall.”

As an alternative, the housing authority is considering reducing the value of each voucher, meaning that landlords, tenants or both would have to absorb the cost.

Under Section 8, residents typically pay 30 percent of their income toward rent, and the voucher covers the balance. In New York City, about 102,000 families now have vouchers, which are administered by the authority and allow families to live in units where private landlords accept Section 8 benefits. An additional 178,000 or so families live in public housing complexes owned by the authority.

After the authority voided 2,600 outstanding vouchers in December, prompting an outcry from affected families, it urged people to apply for public housing, although the waiting list is years long.

HUD provides money for the Section 8 vouchers and tells housing authorities the maximum number they can use. In May, HUD told the New York City Housing Authority it was in danger of exceeding its allotted number.