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HUD wants out of the public housing business

BRATTLEBORO—Brattleboro Housing Authority executive director Christine Hart said she recently learned from HUD that the agency will not provide funds to shore up the Section 8 program unless a housing authority has “zero reserves.”

And that puts BHA and its stakeholders in a real bind, she said, asking rhetorically, “Would a viable business run without a financial buffer?”

According to Hart, the BHA had about $1.7 million in reserve before 2011’s Tropical Storm Irene’s disaster costs “ate them.”

HUD has also said a housing authority should have only a week’s worth of reserves on a regular basis.

Uncertainty about funding is “not good for the people we serve,” Hart said. “If the bottom falls out, it’ll hurt a lot of people.”

The BHA delivers multiple HUD programs beyond the Section 8 housing vouchers. One program, with 22 participants, depends on monthly federal payments, she explained. But by end of May, HUD still had not cut its April check. Unless HUD comes through with that money, BHA will have to figure out how to close the gap, she said.

Hart said she worries about funding for the Section 8 housing vouchers. Under the voucher system, voucher holders rent from private landlords. The renter pays a portion of the rent, and HUD picks up the rest through the BHA.

On average, the BHA delivers $65,000 to private local landlords renting to Section 8 voucher holders.

That money feeds the local economy and houses community members, she said.

“If HUD goofs up, which they do a lot lately, I really don’t want to be the one making that call [to landlords],” Hart said. “It’s a very bad time in terms of HUD.”

She described HUD as having “danced on the edge” of financial disaster for years. With federal budget sequestration in effect, she said, the agency has gone over that edge.

Brattleboro depends on about 155 Section 8 vouchers. About eight years ago, HUD awarded the housing authority 187 vouchers as a benchmark for what the town needed to serve qualifying renters.

The BHA has effectively lost 32 vouchers as rents have increased and HUD has gone through a variety of rule changes. With the share of rent that the BHA can afford, the number of vouchers has dropped to 155. That number will fall further should HUD continue cutting its funds.

According to Hart, HUD has made no secret of the fact it “wants out” of the public housing business. Part of the issue with public housing for Brattleboro also hinges on HUD’s basic orientation toward urban areas.

Rural communities tend to suffer with HUD’s mindset of “one size fits all,” said Hart.

The BHA has about 149 public housing units, yet HUD lumps them into the same bucket as cities such as Milwaukee, Kansas City, or Hartford, Conn.

Hart said she believes HUD is attempting to force the defunding of public housing. In that event, non-profit housing organizations would have to fill the gap, she said.

Public housing is the deepest subsidy available to people, said Hart, as it “takes the people with the greatest risk.”

Losing public housing would prove “a very, very bad societal impact on low-income people. They just won’t have a place to live, basically,” Hart said.

Asked which entity would — or could — pick up the slack should the federal government effectively drop its support for public housing programs, Hart was at a loss. It wouldn’t be the state of Vermont, she said.

“[Sequestration] really hurts the poorest of people Like the elderly and families who are one flat tire away from homelessness,” she said.

HUD manages related programs, such as grant making and multi-family housing, but public housing is the biggest slice of the pie.

“I don’t know if there’s a plan,” said Hart of HUD’s actions. “I’d feel a whole lot better if there was a plan.”

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Originally published in The Commons issue #206 (Wednesday, June 5, 2013).

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