Federal Budget proposes cuts for housing
Commitment to low-income programs continues
to wane
SEATTLE—April 12, 2004—Once
President Bush announced his administration's plans for the 2005
Federal Budget, housing authorities across the country began to
calculate the potential cuts to housing programs across the board.
The proposed budget makes cuts in
virtually every low-income housing program, including $1 billion in
cuts to the Section 8 voucher program. These cuts would rise to more
than $4 billion by 2009, which represents a 30 percent cut in the
program. The proposed budget also
continues the trend of under-funding both the public housing
operating and capital fund.
The administration proposes sweeping changes to
the current voucher program, replacing it with a new "Flexible
Voucher Program." Under the new program, the federal government
would block grant subsidy to local housing authorities and would
reduce some of the regulatory demands of the program. Officials with
the U.S. Department of Housing and Urban Development have suggested
that with less regulation, housing authorities should be able to
provide more subsidy to renters even though the funding from HUD is
reduced. Housing authority leaders, on the other hand, have
criticized the proposal as "a budget cut in search of a policy," noting
that such a severe reduction would put many low-income families at
risk of losing their housing.
The proposed program would provide funding as a
block grant to housing authorities, rather than providing funding
for a specific number of housing units. Housing authorities would
then have to chose between reducing the amount of subsidy to
low-income households, serving fewer households overall, or serving
higher income households. Nationwide, the Section 8
program provides $14.949 billion in housing subsidies to 2 million
households, 40 percent of which are made up of the elderly and
people with disabilities. In the President's budget request, that
subsidy is cut to $13.176 billion. Other changes
include the elimination of the HOPE VI program, which would mean
that no new HOPE VI grants would be awarded. Seattle's HOPE VI
projects would not be affected. Cuts of $6
million from public housing operating subsidy and $22 million from
the capital fund are also proposed. In
Seattle, the housing authority would feel the effects of these cuts
beginning in October of 2005. SHA's financial analysts project an 8
percent decrease in Section 8 funds (from $61.7 million to $56.8
million). Another potential impact to SHA's budget is the likely
adoption of new regulations that control how much public housing
subsidy each housing authority is entitled to. It is still unclear
whether SHA would gain slightly under new rules, or lose up to 5
percent. Check back in the Newsroom section
of SHA's Web site for budget updates as they become available.
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