August 18, 2013 4:14 pm

Budget cuts put low-income Americans in homes squeeze

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A homeless man walks down the street on June 20, 2011 in New York City©Getty

When Krystal Bearden returned home from hospital after emergency surgery in June, she was greeted by a letter informing her that the rent on her government-subsidised dwelling would increase by almost $1,000 a month.

“It was definitely shocking because the amount is not feasible for me,” said Ms Bearden, a 28-year-old single mother of two from San Jose, California. “Here I am with six weeks to move into a smaller unit in a less-fortunate part of town, or I can pay my entire month’s income to keep my son stable in his school.”

Similar dilemmas are being faced by low-income families across the US as public housing programmes try to absorb the costs of sequestration – the across-the-board budget cuts in Washington, imposed amid political wrangling in Congress, that have slashed $930m from federal housing assistance programmes. The squeeze will affect 125,000 families.

“The direct impact is on the families who are on the waiting list, who in a normal year would have received a voucher when the voucher became available, but in the current year are not receiving assistance at all,” said Douglas Rice, a policy analyst at the Center on Budget and Policy Priorities.

The voucher programme, passed under the 1937 Housing Act, subsidises rent for low-income families. But sequestration has forced federally funded housing authorities to freeze new vouchers, push families into smaller homes and cut back on how much rent they are willing to subsidise – leaving the families to foot the rest of the bill.

Vouchers for subsidised housing generally become available after families leave the public housing programme: their old vouchers can be distributed to others on the waiting list. But at present, most housing authorities cannot afford to reissue the vouchers.

In Oakland, California, less than an hour north of Ms Bearden’s home, the number of people leaving the programme every month has fallen to 30, from an average of 70 during the period before the recession, said Eric Johnson, the executive director for the Oakland Housing Authority.

Alongside fewer resources, “you have more people needing the assistance longer”, he said. This had created “a perfect storm for us”, he added. “It’s historically low federal funding and sequestration. You’re dealing with a double hit.”

Mr Johnson says 900 families in Oakland would have been assisted this year were it not for sequestration. But these families will remain on the waiting list due to his agency’s $9.1m budget cut. Not only will vouchers remain unissued, but supplemental programmes – including one that places homeless people residing under the Bay Bridge in temporary shelters – will be cut as well.

“The other people on the wait list – what are they doing? We have absolutely no idea other than they are probably overhoused; they are probably moving in very, very precarious situations, if indeed they are housed,” said Mr Johnson. “It could be that they are with family moving place to place, or it could be they are in shelters. I think it’s a whole mix of that.”

The Department of Housing and Urban Development, which oversees more than 3,400 local housing authorities across the country, set aside more than $100m in March for authorities with the most severe budget shortfalls – those at risk of having to terminate assistance to families.

To qualify for the emergency funds, local housing authorities were required to freeze their waiting lists and stop issuing any new vouchers by April 1. More than 230 at-risk authorities – including ones in Santa Clara County, California, and St Louis, Missouri – have expressed interest in applying for emergency funds.

“The folks that have been on the waiting list for years and years and years will have to wait even longer now because the money for their rent was cut,” said Richard Monocchio, executive director of the Housing Authority of Cook County in Chicago, which had its budget cut by $8m, and has 500 to 700 additional families on its waiting list.

As Congress prepares to negotiate a federal budget for the next fiscal year, directors of local housing authorities are worried that more cuts will come.

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