The looming problem is a $2.4 billion shortfall at the Department of Housing and Urban Development (HUD), endangering rent payments for low-income renters in the project-based Section 8 program, who pay 30 percent of their adjusted monthly income to landlords and have the balance provided by the federal government. But poor fiscal management by HUD, advocates assert, has left the agency in such straits that it sent letters to some Section 8 landlords telling them payments could end by Sept. 30, 2008, the end of the current fiscal year. They say landlords in turn informed some tenants that they'll soon have to pay regular market rate for their apartments, as much as five or six times their current rent portion.
Michael Kane, executive director of the Boston-based National Alliance of HUD Tenants, sounds a clear note of alarm. "People will be out in the street, and that could be as early as this summer," Kane said.
Representatives of the landlords said to be threatened – while distressed about what they see as HUD's persistent underfunding – anticipate less dire outcomes. The head of an organization of affordable housing owners and agencies says the she's more worried that the apparently insecure funding stream from HUD will cause banks not to back the investments Section 8 building owners want to make in building preservation.
"It's going to have an impact on how long we can keep these properties in the inventory," says Denise Muha, executive director of the National Leased Housing Association (which joined in testimony on the issue before the U.S. Senate Banking Committee this month). Meanwhile Susan Camerata, chief financial officer of the local affordable housing company Wavecrest Management, says she's aware of just one Section 8 building owner in uptown Manhattan who's said she's leaving the program since the HUD letters went out.
Tenants, activists and elected officials spoke out in Greenwich Village last week – in tandem with similar events around the country – to fight for federal funding to fill the gap. At a rally at Judson Memorial Church on Wednesday, residents were joined by local U.S. Reps. Jerrold Nadler, Nydia Velazquez and Yvette Clarke, who voiced frustration with the Bush administration’s handling of the budget. Nadler and Velazquez co-authored a letter, signed by 36 House members, urging the Transportation, Housing and Urban Development subcommittee of the House Appropriations Committee to advocate for full funding of the program in fiscal year 2009, which begins Oct. 1, 2008. Sent last week to subcommittee chairman John Olver, a Massachusetts Democrat, and ranking member Joe Knollenberg, a Michigan Republican, the letter calls for an advanced appropriation and increased discretionary funding to cover the missing $2.4 billion.
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“Bush is saying, ‘subsidized housing, that’s socialism,’” Velázquez told the ralliers, who nearly filled the main sanctuary at Judson. “People are working two, three, four jobs, and still they can not afford to pay rent in New York City. It is okay to go out and rescue Bear Stearns, but not working people.”
