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Bush administration budget plans put...
Affordable housing on the chopping block

By Aaron Hess and Elizabeth Schulte | October 1, 2004 | Page 12

HE'S THE most recognizable real-estate tycoon in the country--his name chiseled on luxury high rises and casinos, his face plastered on billboards celebrating his TV catchphrase "You're fired!" This week, Donald Trump is in the news again--once again making Forbes magazine's list of the 400 richest Americans.

Trump's whopping net worth of $2.6 billion was accumulated largely through his "talent" at buying and selling prime New York City real estate. But there's another housing story in New York that's getting less attention. As "The Donald" celebrates his success in his home overlooking Central Park, the Bush administration is getting ready to throw low-income New Yorkers out of theirs.

Section 8 is the nation's largest affordable housing program for the poor. The federally funded program provides rental assistance subsidies to some 2 million low-income families. If cutbacks proposed by the Bush administration--in a little publicized revision of rules for the Department of Housing and Urban Development (HUD)--go through, they will have a devastating impact on the lives of hundreds of thousands of poor families.

"Like hurricanes in the Atlantic, assaults on the housing voucher program by the Bush administration have been unrelenting," Sheila Crowley, president of the National Low Income Housing Coalition, an advocacy organization for Section 8 tenants, wrote in the group's recent newsletter. Any program will break apart if battered hard and often enough. If the program can be so destabilized that landlords, lenders and developers will give up on it, it will much easier to cut down."

With a Section 8 voucher, eligible residents pay 30 percent of their income in rent, and the federal government's HUD department kicks in the rest. Section 8 was established in 1974 as part of the government's response to the urban rebellions of the late 1960s and early '70s, as well as grassroots organizing by low-income tenants across the country. The program has been under constant attack ever since.

Millions of poor families are legally eligible for Section 8 and other forms of housing assistance, but are shut out by a maze of restrictions and endless waiting lists--and, of course, the bottom line of inadequate funding. Last year, the average wait for a Section 8 housing voucher was 27 months.

However, most Section 8 applicants are disqualified automatically because of income restrictions, a record of convictions--including misdemeanors--or other bureaucratic rules. Over the past few months, the Bush administration has been seeking to cut Section 8 by as much $1 billion for the next fiscal year, and by as much as $4.6 billion through 2009, according to the Center on Budget and Policy Priorities.

HUD officials justify the cuts by claiming that they have devised a fairer system of determining what is known as "fair market rent"--the median rental amount for apartments of a given bedroom size, within a certain geographic region. Fair market rents, which are tabulated for the bottom 40 percent of a region's housing market, are used to determine the amount of money the government contributes to a household's subsidy.

HUD's new system, however, redraws the geographic boundaries within which fair market rents are set. The net effect would be to drastically reduce subsidies for tenants in big cities, where rents tend to be much higher. Low-income tenants will be forced to make up the difference.

So, for example, HUD's new "fuzzy math" will reduce the fair market rent for a four-bedroom apartment in New York City from $1,504 a month to $1,286. The Section 8 recipient would have to find the extra $218 to stay in their apartment--or move out.

For many low-income families, that's the difference between having a place to live--and being thrown out in the streets. In New York City, where some 110,000 people rely on Section 8 vouchers, the cuts could price thousands of tenants out of their current apartments.

"With rents going sky high, I don't know if I'm even going to be able to keep my voucher next year," said Section 8 recipient Cindy Klumb, a housing rights activist and socialist in Brooklyn. "The cuts are going to increase the epidemic of homelessness. They're going to force more of the working poor into the shelters. This is a disaster for low-income tenants that we need to stop."

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