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Threat to Section 8 Program Continues

November 8, 2004

Congress is currently considering changes to the HUD Section 8 rental voucher program – a critical affordable housing resource for low-income people with severe mental illnesses – as part of final deliberations on the FY 2005 HUD budget. Members of the House and Senate VA-HUD Subcommittees will be meeting as early as the week of November 15 to resolve differences over the final FY 2005 VA-HUD Appropriations bill (HR 5041/S 2825) – the bill that includes funding for all HUD programs.

Action Needed

It is likely that discussion over the Section 8 program will be critical to debate over the VA-HUD bill for FY 2005. While both the House and Senate draft VA-HUD bills reject efforts to convert the program to a dollar-based "block grant," it is likely that major elements of this proposal could be revived. NAMI advocates are strongly encouraged to contact their members of Congress and urge them to reject the "Flexible Voucher" proposal and work to ensure that adequate funding is made available to renew all vouchers currently in use for FY 2005.

FY 2005 Draft Senate Bill Rejects the Bush Administration’s "Flexible Voucher" Proposal

The good news is that the Senate VA-HUD Appropriations bill (S 2825) completely restores the $1.6 billion in cuts to the Section 8 rental voucher program that had been proposed by the Bush Administration. The President’s proposed budget for Section 8 would have left HUD and local housing agencies as much as $2.2 billion short of funding needed to renew every voucher under lease. Additionally, the Senate rejected the President’s "Flexible Voucher" proposal to "block grant" the Section 8 program. This proposal that would have eliminated requirements for housing agencies to target rental vouchers to extremely low-income households (those at 30% of median income and below) and allowed agencies to impose time limits on rental assistance.

Section 8 is a critically important housing resource for individuals with severe mental illnesses who depend on Supplemental Security Income (SSI) for basic needs. According to the most recent Priced Out report from the Technical Assistance Collaborative and Consortium for Citizens With Disabilities (CCD), SSI beneficiaries are (on average) at only 18.5% of median income and SSI beneficiaries must pay (on average) 105% of their monthly income to rent a modest 1-bedroom apartment. Access to a Section 8 voucher – which pays the difference between actual rental costs and 30% of the recipient’s income – is critically important to getting, and keeping, housing in the community.

In rejecting the Bush Administration’s "Flexible Voucher" proposal, the Senate Appropriations Committee legislative report characterized it as "so flawed that it cannot be corrected" and that inadequate funding would result in "a shrinking commitment to housing resources for those with the greatest need." The report goes on to note that the proposed elimination of the current "extremely low-income" targeting requirement (30% of median income and below) would result in people with disabilities being forced into substandard housing or being at risk of homelessness.

Specifically, the Senate VA-HUD bill funds the Section 8 program at $20.7 billion, including $19.04 billion for renewal of all vouchers under lease in FY 2005. This is as much as $2.2 billion more than the President’s request. This represents an enormous victory in the effort to maintain access to decent, safe and affordable housing for adults with severe mental illnesses, especially SSI beneficiaries. NAMI is extremely grateful for the bipartisan leadership of Senators Kit Bond (R-MO) and Barbara Mikulski (D-MD) in rejecting this effort to "block grant" Section 8.

Background on Current Threats to Section 8

Section 8 FY 2005 Flexible Voucher Proposal – The Bush Administration’s FY 2005 budget contains a proposal to cut Section 8 $1.6 billion below the amount needed to renew all current vouchers under lease. The budget also includes a radical "Flexible Voucher Proposal" that would cap future payments to housing agencies, while granting them unprecedented flexibility to raise tenant contributions and time limit rental assistance. NAMI and dozens of national disability organizations and other groups representing housing agencies, elected officials and low-income housing advocates are opposing this misguided proposal. By limiting future Section 8 funding, and delinking federal funding from the actual per voucher costs of providing rental assistance, state and local housing agencies will have enormous incentives to avoid serving extremely low-income households (those at 30% of area median income and below) whose per voucher costs are higher. Likewise, time limits on assistance and higher tenant contributions imposed by housing agencies will fall hardest on people with disabilities living on SSI. NAMI urges Congress to reject the Administration’s "Flexible Voucher" proposal for FY 2005.

The following documents provide more information on the current threats to the Section 8 program:

Administration Proposal Will Harm People with Disabilities

Low Income Housing Information

FY 2005 Funding for Other HUD Programs

Section 811 – The Senate VA-HUD bill proposes $250 million for the Section 811 program, $908,000 above the current FY 2004 level of $249.1 million, and $1.3 million above the President’s request of $248.7 million. More importantly, the recommended funding level in the Senate bill rejects a $11.09 million (4.3%) cut to Section 811 that was included in the House bill. Both the House and Senate bill also include funding for renewal of existing rent subsidies under both the 811 tenant-based program (also known as the "mainstream" program) and the project-based program (known as PRACs). For FY 2005, this is projected to be $28.89 million for tenant-based, and $2.349 million for project-based. This funding is taken off the top of the overall Section 811 appropriation and further restricts funding for development of new 811 units in FY 2005. Without additional funding for "mainstream" voucher and PRAC renewals, overall Section 811 funding will continue to be squeezed.

Homeless Assistance – The Senate VA-HUD bill proposes to fund programs under the McKinney Homeless Assistance Act at $1.26 billion, $458,000 above the FY 2004 level and $22.4 million below the President’s request for FY 2005. Among the programs funded under the McKinney Act are Emergency Shelter Grants, Supportive Housing (SHP), Section 8 moderate rehabilitation (SRO) and Shelter Plus Care – all critical resources serving homeless individuals with severe mental illnesses and co-occurring substance abuse disorders. As in past years, the Senate bill fully funds renewal of all expiring Shelter Plus Care rental subsidies, projected to cost $186 million in FY 2005.

For more information, please contact Andrew Sperling of the NAMI Policy Staff at andrew@nami.org

 

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