Bush seeks to remove housing voucher cap

[Ron Burgundy]

AP - Up to 180,000 additional low-income families could get housing assistance under a proposal by President Bush to remove caps on the number of housing vouchers distributed by local agencies, Housing Secretary Aphonso Jackson said Thursday.

Bush, as part of his 2008 budget proposal, will offer a plan to free up unspent money already in the hands of local housing authorities by encouraging them to issue more vouchers that low-income families use to pay rent. Bush administration officials estimated that housing authorities across the country are sitting on more than $1 billion that they cannot spend because they have already issued the maximum number of Section 8 housing vouchers that they are allowed.

"The reforms proposed in the president's upcoming budget will create innovative solutions that could help 180,000 more families receive the housing assistance they need," said Jackson, secretary of the Department of Housing and Urban Development. "Because many housing authorities around the nation have been good stewards of the taxpayers dollars, we will be able to put a roof over the heads of more people in those communities."

Many housing authorities have built up reserves by negotiating favorable rents with private landlords.

However, housing authorities that spend down their reserves on additional vouchers would not necessarily be guaranteed more money in future years to continue funding those vouchers.

Democrats in Congress have complained for years that the Section 8 program relies on an outdated formula that sends money to housing authorities that don't spend it while shortchanging those that need it, said Steve Adamske, spokesman for Rep. Barney Frank (news, bio, voting record), D-Mass., chairman of the House Committee on Financial Services, which has jurisdiction over housing matters.

Adamske said the cap on housing vouchers is only part of a bigger problem with the overall spending formula.

New York City Housing Commissioner Sean Donovan said the proposed changes would enable him to issue up to 3,500 new housing vouchers. Donovan said his agency, which issues only a portion of the housing vouchers in New York, is currently capped at about 27,000 vouchers.

"We have been actively encouraging the administration to lift this cap," Donovan said. "We do have money that we could spend if this cap is removed."

The Bush proposal would encourage local housing authorities to issue more vouchers by reducing their budgets in future years if they don't spend down reserves. Also, federal funding for the administrative budgets of local housing authorities would be based in part on the number of vouchers they issue, a senior HUD official said on condition of anonymity. The official requested anonymity because he was not authorized to speak on the record.

HUD's Section 8 housing program funds housing vouchers for more than 2 million low-income families. The vouchers are distributed by the nation's 2,400 local housing agencies.

Bush is scheduled to unveil his budget proposal for fiscal year 2008 on Feb. 5. It will be the first time he proposes a budget to a Democratic-controlled Congress.

Bush will propose a $16 billion budget for the Section 8 program in the 2008 budget year, which begins Oct. 1, the HUD official said. Current spending on the program is about $15.1 billion.

source: http://news.yahoo.com/s/ap/20070126/ap_on_go_pr_wh/hud_budget [link]