SEATTLE—January 23, 2003—The Seattle Housing Authority is bracing for possible budget cuts as a result of miscalculations by the U.S. Department of Housing and Urban Development. Subsidies essential for operations and maintenance might be cut by as much as 20 to 25 percent in HUD’s next budget year.
Years of faulty projections and poor accounting practices by HUD regarding how much money the federal government would have available to support public housing authorities has led to a $250 million shortfall in public housing funds across the country this year.
In early January, HUD warned local housing authorities that because of the shortfall they would receive only 70 percent of the subsidy they got in 2002. Housing authorities were already struggling to maintain housing and provide needed services after the $310 million Drug Elimination Program grant was cut last year.
Housing authorities around the nation registered public dismay at such a far-reaching budget cut. The King County and Seattle Housing Authorities joined with the Tacoma Housing Authority to appeal for more funding at a news conference at Capitol Park in Seattle on January 15.
"Public housing comprises just four percent of annual federal support for housing," said Harry Thomas, executive director of the Seattle Housing Authority. "This cut would make it harder for local housing authorities to do a good job of maintaining our valuable inventory of public housing. The administration needs to protect funding for these programs, not reduce it."
There is evidence that the public concern expressed is making a difference in Washington, D.C. On Jan. 15, the day after the Seattle news conference, HUD announced that subsidies in 2003 may only be cut by 10 percent rather than 30 percent.
But because the administrators at HUD have not requested additional funds from Congress, it remains unclear how the shortfall would be restored. Housing authorities may not know the final amount of HUD subsidy they will receive for next year until May or June. Although the Senate just passed an appropriations bill for the current federal year, it still must be reconciled with the House bill, and action has not yet been taken on next year’s budget.
Most public housing developments are more than 35 years old and are in need of ongoing capital replacements, say both housing authority directors. Operating costs such as utilities and property insurance continue to rise.
Despite the fact that funding for public housing has been under stress for years, public housing developments in the Northwest have been managed well and represent community assets worth billions of dollars.
Housing authorities rely on the HUD subsidy for 60 percent of the cost of operating public housing. The balance of their budgets comes from rents from tenants who pay 30 percent of their incomes. Because the average income of a public housing tenant is less than $12,000 per year, housing authorities cannot raise rents because residents, often working in minimum wage jobs, simply can’t afford to pay more.
Do these possible cuts mean that residents of SHA are facing the loss of their housing? No; at least not in the immediate future. But maintenance cutbacks, layoffs and the loss of important services to residents could be a result. The housing authority is committed to doing its best to keep serving our current residents.
Supporters of public housing have been diligent in letting HUD, Congress and the President know that on-going subsidy is important. Several members of Washington's Congressional delegation have urged full funding of the HUD budget. These include Rep. Jim McDermott, Senator Maria Cantwell and Rep. Adam Smith. Also, Seattle's City Council, with the support of Mayor Greg Nickels, has passed a resolution asking appropriators to reconsider their proposed actions. Councilmember Nick Licata has agreed to push for additional support. Gov. Gary Locke has also spoken out on the issue.