HUD plays Grinch with its poorest tenants

A single mother with two children in Texas is potentially eligible to receive $260 per month from Temporary Assistance for Needy Families (TANF). She might be able to get Food Stamps to help feed the kids. But the $260 per month has to cover the other living expenses.

There is basically no option except to apply for the Section 8 or public housing waiting list to afford the rent. If she can get housing assistance, and the waiting lists are often five years or longer, she will pay 30 percent of her income for rent and utilities. Under a law passed a few years back public housing authorities, at their option, can charge tenants a minimum rent for public housing of up to $50. Seventy-three percent of public housing authorities charge a minimum rent of between $25 and $50. Housing authorities are required to offer a hardship exemption from the minimum rents (although whether they do and  how well this is made known to tenants is a subject of debate).

Project Based Section 8 tenants are all charged a minimum rent of $25. Certain other programs for the elderly poor and the poor with disabilities have no minimum rent.

To someone who is not trying to budget for a family of three with $260 per month $50 rent might seem like a really good deal. But $50 paid to the housing authority means having $210 a month to buy clothes, furniture, transportation, etc.

That’s why the Obama Administration’s proposed HUD budget has people like the National Low Income Housing Coalition worried. HUD proposes to require housing authorities to raise rents on public housing, Housing Choice Vouchers (Section 8), Project Based Section 8, Section 202 elderly housing and Section 811 housing for persons with disabilities to a minimum monthly rent of at least $75. That means that mother with two children will have only $185 per month after paying the housing authority.

Interestingly, House Republicans on the Financial Services Committee that oversees HUD could not top the Obama Administration in this area. Their proposal was to only increase the minimum rents to $69 per month.

The Obama Administration proposes to hang something of a safety net under the elderly and disabled living in a Section 202 or Section 811 funded development by saying that families living in developments funded under those HUD programs should never be evicted if they cannot pay the rent. Protections for families living in public housing and paying rent with Housing Choice Vouchers don’t get the same level of protection.

Distinctions based on the funding source used to build the housing will be lost on most residents. Someone try explaining to an elderly HUD tenant that while they are now required to pay an extra $75 from their social security check to the landlord that they should not worry because they are old and live in a Section 202 funded apartment and therefore no one is really going to throw them out on the street.

Shaking an extra $25 or $50 a month out of the pockets of the poorest people in the country is bad policy. HUD will be reaching into a lot of those pockets, According to the Center for Budget and Policy Priorities this would raise the rent of 46,609 of the poorest families in Texas alone.

It is hard for me to see the reason for this except it plays well to people who think the poor have it too easy. That type of pandering should be beneath the Administration. The estimate is the rent collected will result in a savings of $150 million to HUD, which is .003% of the total department budget. If someone was working to dream up a regressive budget policy this initiative would come out on top. On the one hand HUD proposes to increase funding for homeless programs while pursuing this policy that will cause families to lose their existing HUD housing and become homeless.

This is bad policy. It is going to make families homeless and scare the poor elderly. HUD and President Obama should reconsider.

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