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Federal budget uncertainty makes housing officials wary

Many low-income residents already affected by state and local cuts

SEATTLE — March 3, 2011 — Housing authorities across the country are watching carefully as Budget negotiations in Washington, D.C. raise questions about program adjustments that may be necessary if budget cuts to the Department of Housing and Urban Development are enacted.

Here in Seattle and Washington State, housing authority officials are concerned about the cumulative effect on low-income residents of cuts at the federal and state level.

The Seattle Housing Authority is already experiencing extremely low vacancy rates, and Housing Choice Voucher holders are unable to advance economically to the point where they can give up their vouchers and move into unsubsidized housing.

According to Seattle Housing Executive Director Tom Tierney, "The number of new people we are able to serve each month is shrinking. In January, just 74 new households were able to move into our housing or receive a voucher. This number has been as high as 200 over the past five years, but is clearly trending downward. Our vacancy rate in public housing is just 0.2 percent, with only 9 units out of 5,194 currently available to rent."

At the same time, the waiting list for Housing Choice Vouchers remains closed, and the agency is unable to issue new vouchers at all. Nearly all vouchers are in use (99.6 percent), and the 1,552 households still on the waiting list remain stuck there. Total waiting lists exceed 25,000, and 884 new households were added in January alone. At a time when need is growing dramatically, the Seattle Housing Authority is unable to expand to meet that need.

According to Tierney, "We are especially concerned about the cumulative hardships being experienced by low-income residents in both our Housing Choice Voucher and Public Housing programs. Many of these families are experiencing severe economic pressures as a result of cuts at the state level."

The State of Washington faces a $1.1 billion gap in its current budget. Some of the reductions it has implemented are a 15 percent reduction in payments to TANF participants and a 50 percent cut in Disability Lifeline grants, both programs targeted toward the lowest income individuals. Seattle Housing Authority must contribute an additional $1 million in annual housing subsidy to continue to provide housing for these individuals and families whose incomes have been reduced.

Gina Owens, a public housing resident who is supporting her three grandchildren on Social Security and a TANF grant, is concerned about recent reductions to her income. She explained her worry about the changes her family is facing. "Our TANF grant has decreased by about a hundred dollars, and I also lost funding for my prescriptions because of the elimination of the Part D Medicaid funding," Owens said. "That adds up to a $200 difference in my budget every month, and it is making things very difficult."

Lynn Sereda, a Housing Choice Voucher holder, has lived in her apartment for five years with the help of her voucher. She reports that she is feeling the effects of the cutbacks with the elimination of funding for low-income dental care.

"I know that taking care of your teeth really helps to keep you in good health, and having my teeth cleaned every year is something I’ve been really careful about," Sereda said.

While Sereda is hopeful that this funding will be restored, she depends on her voucher for stable housing. Homelessness looms as a real fear.

"I certainly hope I am not on the street next year," she said. "I think that keeping people housed really saves us all money in the long run."

Suggested cuts to the Public Housing Capital Fund are also alarming. At Seattle Housing Authority alone, a 43 percent reduction, as proposed by the House of Representatives, would represent a loss of nearly $6 million. Given the fact that public housing authorities across the country have been operating for years with a $30 billion backlog in capital needs, this cutback could result in further deterioration of the current housing stock.

The Seattle Housing Authority is the recent recipient of a $3 million matching grant from the City of Seattle to perform repairs in our Seattle Senior Housing Program buildings. If the Capital Budget allocation were cut by $6 million, the agency would likely lose this $3 million grant from the City because of an inability to match it, due to other obligations and pressing demands for capital improvements.

Budget measures under consideration also include eliminating HOPE VI and the new Choice Neighborhoods Initiative. The housing authority has submitted a Choice Neighborhoods competitive grant proposal to HUD for $24 million that would enable the first phase of Yesler Terrace Redevelopment. Since the mid-1990’s HOPE VI funds have been the catalyst for mixed finance developments at NewHolly, High Point and Rainier Vista. The Choice Neighborhood funds could play a crucial role in the mix of public and private funding that will be needed to realize the redevelopment and revitalization of Yesler Terrace.

According to Tierney, "It is too early to tell what adjustments we may have to make. We are watching carefully and staying in close touch with our Congressional delegation and our low-income housing colleagues."