Bush Housing Plan Stirs Anxiety Over New York's
Share of Aid
NY
Times, New York Region, By David W. Chen, February 20, 2004
In pure numbers, President Bush's 2005 budget proposes to increase spending
on the Department of Housing and Urban Development by 3 percent. But
in terms of philosophy, many housing experts say, the administration
is actually moving strongly to reduce the federal government's role
in the kind of subsidized housing that many New Yorkers depend on, applying
market principles and the tenets of the welfare overhaul of the 1990's
with a renewed eagerness.
The administration, for example, is proposing to shift from the federal
to the local level the Section 8 voucher program, the government's primary
effort to help the poorest Americans find and pay for their own housing.
It wants to loosen the eligibility rules for Section 8, allowing a larger
group of families to apply without guaranteeing a portion for the poorest
families. And it has proposed giving incentives to housing agencies
that shrink the rolls of subsidized tenants.
If enacted, New York City officials estimate, the Bush plan could reduce
the number of households receiving vouchers in 2005 by 7,000, or almost
7 percent of the current total. That number could triple by 2009, they
say.
The Bush administration says the budget represents the latest incarnation
of a flexible but tough-love approach to subsidized housing that began
to germinate during the Clinton administration. It also reinforces the
original premise that subsidized housing should be a springboard to
self-sufficiency, not a permanent entitlement, department officials
say.
"It's an evolution which has been accelerated because we have
pushed the envelope," said Michael Liu, assistant secretary for
public and Indian housing at HUD. "Similar to the concepts which
were approved back in the mid-90's regarding welfare reform, we are
moving on the same tack."
To some critics, though, the proposals are an exercise in reckless
budget-cutting, a sop to suburban homeowners at the expense of urban
renters. And the place that could be hurt the most is New York City,
which, according to a coming study from New York University, receives
as much as $3.5 billion in federal housing aid each year, far more than
any other city.
"It has a very strong political underpinning: demonizing folks
on welfare and folks in public housing," said City Councilman Bill
de Blasio, a Brooklyn Democrat, who was HUD's regional director in New
York from 1997-99. "And it puts New York in a very, very difficult
spot because we're past the point of any reasonable expectation that
a better hand of cards will be dealt."
Many housing groups say they were preparing for major overhauls after
the Bush administration tried last year to turn Section 8 into a block
grant program for state governments, using a complicated formula to
determine aid instead of basing it solely on the number of needy people.
The program was called Housing Assistance for Needy Families; the nation's
welfare program is called Temporary Assistance for Needy Families.
Congress said no. But in this year's $31.3 billion budget, HUD proposes,
under a Flexible Voucher Program, to transfer Section 8 to local agencies
instead of to the states, and to relax eligibility criteria.
Currently, 75 percent of all vouchers are reserved for people who earn
up to 30 percent of the local median income, or about $15,000 a year
in New York. But under the Bush plan, local housing agencies could hand
out vouchers to anyone making up to 80 percent of the median income,
or about $41,500 in New York.
Public housing would undergo changes, as well, paralleling the ideas
that transformed welfare, like time limits and privatization, as well
as other concepts, like bonuses for housing authorities based on financial
aptitude. Among other experiments, HUD is pushing for a $15 million
"voluntary graduation" program to encourage, though not require,
residents to leave public housing.
"We come from a basic notion of accountability, and again, from
a common sense understanding of what the program should be promoting,
which is self-sufficiency," said Mr. Liu of HUD.
The budget has been heralded by conservatives like Howard Husock, a
Harvard scholar whose 2003 book, "America's Trillion-Dollar Housing
Mistake," has been popular with administration officials. Local
governments and housing agencies, meanwhile, have applauded the notion
of greater autonomy, but are worried about the amount of money.
Local control could make it easier for the New York City Housing Authority
to move people from homeless shelters to housing more quickly, and to
inspect buildings and to recertify residents for aid every two or three
years, rather than each year.
"N.Y.C.H.A. is interested in many of the concepts contained in
the president's budget, and we would encourage that there is a dialogue
about those reforms, as long as we get full funding," said Tino
Hernandez, the housing authority's commissioner.
But liberal critics, like the National Low Income Housing Coalition
and the Center on Budget and Policy Priorities, estimate that the budget
falls at least $1 billion short of the amount necessary to finance the
program at the current level. That could mean that up to 250,000 households
nationwide would lose their vouchers in 2005, and 800,000, or 40 percent
of the entire pool, by 2009.
Just as troubling, they warn, the eligibility changes could give landlords
justification for choosing higher-income Section 8 tenants, thereby
leaving the poorest more vulnerable.
"There are virtually no protections for tenants in this year's
proposals," said Barbara Sard, director of housing policy at the
Center on Budget and Policy Priorities.
Even some Congressional Republicans say they are skittish that Section
8, which takes more than half of HUD's budget, may suffer a fate common
to many other block-grant programs: being capped or cut. "It's
a radical policy change,'' said one senior Republican Congressional
aide. "Why do we need to rush into this?"
But HUD officials scoff at such suggestions. They say local autonomy,
and efforts to streamline bureaucracy, will enable them to serve the
same number of people, and eventually to reduce costs. Mr. Liu said
anyone who does not appreciate that HUD is "finding and unlocking
new financial tools" may be "stuck in the time warp of 10
years ago."
Either way, any changes in HUD's budget, however small the percentages,
will be magnified in New York, which has more public housing and vouchers
than anywhere else, and the highest percentage of renters among major
cities. The coming study by the Furman Center for Real Estate and Urban
Policy at the N.Y.U. School of Law says that 400,000 housing units,
or almost one-fifth of all rental apartments, receive some federal subsidy.
The plan would also end enhanced vouchers, which help tenants cover
the rent in buildings that leave the Section 8 program to test the open
market. After one year, those enhanced vouchers would be replaced by
conventional Section 8 vouchers that would not necessarily be able to
cover a higher, market-based rent on the same unit, a prospect that
housing groups say would force out many families.
About 1,200 households in New York now receive enhanced vouchers; 500
more are in the pipeline.
Despite proposed cuts to other programs affecting homelessness, derelict
public housing and the redevelopment of brownfields, which are contaminated
industrial sites, city officials do not believe that the budget will
severely hamper Mayor Michael R. Bloomberg's plan to build or rehabilitate
65,000 housing units.
But Molly Wasow Park, a budget and policy analyst for the city's Independent
Budget Office, cautions that because some of the low-income units in
the mayor's plan depend on vouchers to cover operating costs, they could
be harder to support if the vouchers become harder to obtain.
Regardless of the budget's final shape, two themes may ultimately stand
out, said Bruce Katz, director of the Center on Urban and Metropolitan
Policy at the Brookings Institution, who was chief of staff to Housing
Secretary Henry G. Cisneros under President Bill Clinton.
The first, he said, is that "the message to the New Yorks of the
world is, 'You're on your own, because Uncle Sam is going to be reducing
our contribution.' '' The second, he said, is that housing policy is
driven almost entirely by the budget process, not by a grander vision.
It is enough to make him nostalgic for a former nemesis, Jack Kemp,
HUD secretary under the first President Bush.
"At least with Kemp, they were putting forward policy reforms,
and there was a competition over ideas," he said. "This is
really a competition over what the federal government does at the most
basic level. It's a very different debate, and housing is just a victim
of broader decisions being made.''