Gilroy
– Housing advocates are worried that a series of policy changes
proposed by the federal Department of Housing and Urban Development
threaten to put affordable housing out of the reach of the county’s
poorest residents, including some of the more than 800 Gilroy
families residing in Section 8 housi
ng.
Gilroy – Housing advocates are worried that a series of policy changes proposed by the federal Department of Housing and Urban Development threaten to put affordable housing out of the reach of the county’s poorest residents, including some of the more than 800 Gilroy families residing in Section 8 housing.
“No one knows exactly what’s going to happen, but there are enough moving pieces that we’re uncomfortable,” said Candy Capogrossi, the deputy executive director of housing programs for the Housing Authority of Santa Clara County. “Advocates want to make sure that the lowest-income people get help, but when housing authority funds get cut that translates into helping fewer people.”
At issue are changes to three funding mechanisms HUD uses to disburse money to local agencies. Sometime this week, HUD will propose to change the formula it uses to fund day-to-day operating costs for housing authorities. It is trying to hand off a community grant program to the Department of Commerce, and it is in the process of transforming Section 8 housing into a block grant rather than a need-based program.
“What they’re doing is saying, ‘here’s the money, you figure out how to make it work’ ” Capogrossi said. “In a market where the rent is soft, we’re OK, but when rents go back up we will have to make a choice of either not reissuing [vouchers] when people move out or taking people out of the program.”
There are 15,978 county families living in Section 8 housing, which allows residents to pay just 30 percent of their income in rent, with the rest subsidized with vouchers from the federal government. Of those, 831 live in Gilroy, 324 in Morgan Hill and 23 in San Martin. There are a total of 193 South County families on the Section 8 waiting list. Because the voucher system is tied to income, any increase in rent or decrease in a person’s income must be covered by the housing authority.
In theory, when one Section 8 tenant earns enough to pay full rent, the voucher is passed along to someone on the waiting list. Marilyn Roaf, Gilroy’s housing and community development coordinator, said the changes may result in Gilroy having to freeze its waiting list because the city may not be able to afford to honor all of its subsidies.
Currently, 75 percent of the vouchers issued in any city must be given to families who earn less than 30 percent of the county’s median income, which is about $96,000 for a family of four. One change proposed by HUD would require that 90 percent of vouchers go to families earning up to 60 percent of the median income.
HUD spokeswoman Donna White said she could not comment on the policy changes because they are not official, but she did say the agency wanted to add about $1 billion to the money it provides for rent subsidies.
“We see it as a reform to the Section 8 program to make it more effective and more efficient,” White said.
But Capogrossi said that if the housing authority loses funding, or if the economy boosts rents and other costs of living, vouchers will be more likely to go to higher income applicants who meet the new eligibility requirements.
“We have a charge to serve as many people as possible, and if we decide to help just very low income people, we’ll be able to help fewer people,” she said.
Linda Couch, deputy director of the National Low Income Housing Coalition in Washington D.C., said that Congress may appropriate enough money for vouchers, but that HUD does a poor job of apportioning the funds.
Until 2003, HUD distributed voucher money based on the actual costs of subsidizing vouchers. It is now releasing funds based on assumptions of how the economy and rental market will perform in the upcoming year.
“Some [housing authorities] are fine and will get what they need,” Couch said. “Others will not have enough funds. If things change a lot, then Gilroy will have to make some choices about what happens. One choice they could make is to serve a higher income group of people. The most frequent choice is to freeze the waiting list so that when someone is done with a voucher it doesn’t go to the next family.”
The changes in policy come shortly after the federal Interagency Council on Homelessness, which includes HUD, kicked off an ambitious program to end homelessness in the country over the next 10 years.
“How do these changes jibe with the program to end homelessness? They don’t,” Couch said. “It’s just one more place HUD is hypocritical between what it says it wants to accomplish and the tools it sends to local communities.”
Capogrossi said that the current market means that the county housing authority will likely not have to kick people out of the Section 8 program, but her agency is expecting to lose operating funds in the federal budget that takes effect next year.
“HUD keeps decreasing the operating funds,” she said, “what we use to maintain operations, pay staff, do normal wear and tear repairs.”
Also at risk are funds known as Community Based Block Grants, which are discretionary funds issued directly to cities to be used in a variety of programs for homeless, seniors, youth and disabled people.
The changes would take effect in the fiscal year beginning July 1, 2006. Gilroy will receive $553,000 in block grants in the upcoming fiscal year, which is $30,000 less than it received in the current year. Under new rules, Roaf said, Gilroy might see next year’s total cut in half the following year.
“A loss of that much funding is a real big loss for a small city,” she said.
Dennis Lalor, executive director of South County Housing, said cuts to block grants could jeopardize many community programs. He said those cuts are the natural consequences of the Bush Administration’s policy priorities.
“The war and social security are taking a great deal of money,” he said. “One way to solve that is to stem the flow of discretionary items that are critical to our community. The long-term downside of cutting these funds is something that’s much more important that the political short-term. People need to be aware and visualize what life would be like without them.”
