February 28, 1997 in Nation/World

Rent Subsidy Program In Trouble Cuomo Says 4 Million Could Lose Housing Unless Funds Boosted

Chicago Tribune
 

Housing Secretary Andrew Cuomo warned Thursday that more than 4 million low-income people, many of them children or elderly family members, face losing their federally-subsidized housing next year unless Congress agrees to $5.6 billion in additional spending for the rent-assistance program.

Cuomo told a House subcommittee that failure to fund the program could lead to “massive homelessness” as nearly 3 million low-income, so-called Section 8 housing contracts expire over the next few years.

The 1.8 million contracts due to expire next year provide subsidized housing for 4.4 million people nationwide, 39,416 in Chicago, according to the Department of Housing and Urban Development.

As more contracts expire, as many as 6 million people could be affected by the year 2000, HUD said.

Finding money in a tight federal budget to renew the contracts, while reforming a program that has vastly overspent on rent subsidies over the last two decades, will be the “challenge of the decade,” Cuomo said.

As a practical matter, Congress isn’t likely to allow the program to go unfunded. However, Republicans want HUD to address management problems recently identified by the General Accounting Office.

The Section 8 program is a federal housing subsidy for the poor. In some cases, low-income people receive Section 8 vouchers to help them pay rent. In other cases, the federal government signs contracts directly with landlords to subsidize apartments and other rental units.

Many of those Section 8 contracts were signed at the same time 15 and 20 years ago, according to HUD officials. Thousands of five-year contracts are also set to expire. In all, 1.8 million contracts will expire next year, more than have expired in the last five years combined.

The department needs $5.6 billion in new spending authority from Congress to sign new contracts, Cuomo told a House Government Reform subcommittee hearing Thursday.

In response to GOP concerns, Cuomo said he has a reform plan for the Section 8 program that will save $2.4 billion in fiscal year 1998. The chief problem, Cuomo said, has been contracts that were negotiated years ago and that guarantee annual fixed rent increases to Section 8 landlords.

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