Street Spirit June 2004

Stealing From The Poor: The Section 8 Scandal

by Lynda Carson

On July 20, 2004 people organized by the Campaign for Renters Rights held a victory rally outside Alameda City Hall after Alameda Housing Authority Director Michael Pucci managed to persuade HUD to fork over $630,000 that it owed to restore funding for 108 families that had their housing vouchers terminated due to the Section 8 crisis created by HUD.

This alarming crisis in Alameda, California, is just one example of what is happening across the country. Housing and Urban Development (HUD) officials have been scrambling to counter the negative press reports of blind and disabled people all over the nation that are facing homelessness and immediate expulsion from their housing after they recently found out that their Section 8 vouchers no longer cover all of their rent expenses.

While in the midst of a critical struggle to save hundreds of people from being evicted, Alameda Housing Authority Director Pucci said in an interview on July 9, "In the last 20 years, this has been the worst disaster of my career. I had to serve notice to over 1,600 renters lately, and tell them that we may not have been able to pay their rents for the month of June. HUD has not been responding to our pleas for more assistance. There are people calling to ask if their vouchers are being funded next month and I don't know what to tell them. And then there have been protests going on in the streets of Alameda, at City Hall and in front of my home. If not for the help of my staff, I may not have been able to face this crisis situation on my own."

Pucci said that his agency has also been hurt financially by HUD's actions.

"The Alameda Housing Authority has faced a 6 percent loss in administration fees to run the Section 8 program since mid-May, and that does not include the voucher funding shortfalls that also took place since late April," Pucci said.

"I'm really stressed out by what's been happening, and HUD has already postponed several meetings I set up with them to find out what's going on. This has never occurred before, and I'm very concerned. I would not wish to ever relive what I have been going through lately, and if we do not get new funding to hand out new vouchers to the 108 families caught up in this mess, they will be at risk of becoming homeless and will see their quality of life disappear very rapidly."

The crisis developed very rapidly. In early June, 2004, Alameda had about 1,625 families in the Section 8 program; yet by July 9, there were only 1,502 families left in the program after 108 vouchers were terminated due to the results of HUD's funding shortfalls, and after numerous families voluntarily walked away from the program. At least 108 families lost their vouchers in Alameda because they recently accepted money to pay their rents for the month of July from a different funding source that does not allow the money to be used for paying rents for families in the Section 8 program.

Due to Pucci's success in persuading HUD to pay back past money owed to the Alameda Housing Authority, the 108 families are back on the program and safe for now - at least, until the next funding shortfall occurs.

The Times-Union of Northern Indiana reported on June 29 that more than $22 billion dollars in federal money is being diverted to "homeland security," with $2 billion of that amount coming from HUD's much-needed budget that provides funding for public housing, homeless shelters and the poorest renters in America.

From 2002 through 2003, the Homeland Security budget nearly doubled in size. Its budget quickly rose from $19.5 billion to $37 billion on the heels of Bush's $1.35 trillion tax cut for the rich in 2001, which now puts the squeeze on already tight budgets needed by the poor and working class. [For a chilling peek at the development of Police State America, check out Harpers Magazine's frightening and insightful look at Homeland Security-related events at: www.harpers.org/HomelandSecurity.html.]

A Congressional shell game

The coast-to-coast outcry against the Bush Administration's attempt to shred the Section 8 program was so intense that it forced Republican leaders in Congress to try to repair the damage. On July 20, 2004, Congress responded to the serious backlash from across the nation by restoring most of the $1.6 billion that Bush attempted to cut from Section 8.

On July 20, the House VA-HUD appropriations subcommittee voted to restore most of the cuts to Section 8. But a New York Times editorial on July 22 called the vote "little more than a legislative shell game" because Congress then made "odious cuts" to "all of the other important programs in the housing budget, including many that serve the elderly, the disabled and the homeless."

This Congressional con game restores most of the Section 8 funding, but only by cutting the following essential programs that serve the homeless, disabled, elderly and people with AIDS. McKinney-Vento homeless assistance grants were slashed by $54 million; the HOME program by $86 million; housing for persons with AIDS by close to $13 million; housing for persons with disabilities by $11 million; housing for the elderly by over $32 million; public housing operating funds by $153 million; fair housing programs by almost $2 million; and community development block grants by over $200 million. And the list goes on.

Also, the bill still leaves local housing authorities open to more attacks by HUD, in that HUD could arbitrarily change its funding formulas and dole out far less housing money than needed, similar to what occurred on April 22. The New York Times wrote, "That could mean a replay of the disaster that played out earlier this year when HUD cut rental subsidies retroactively, placing tens of thousands of people at risk of losing their homes."

In the face of all the negative publicity from around the nation, recently appointed HUD Secretary Alphonso Jackson jumped into the spotlight by doing an interview on June 16 for the National Press Club. When Jackson was asked if the nation can expect any relief to assist those that now face eviction because of his changes on April 22 to the HUD guidelines that have redirected funding away from the Section 8 program, the following exchange took place:

Interviewer: "News reports from around the country have recently surfaced revealing that families are now receiving eviction notices or facing rent increases. Does the department have plans to allay this crisis?

HUD Secretary Jackson: "Well, let me say this because that's another myth, and I like to debunk these myths. Nobody is facing evictions."

With his background as a CEO from a large Houston energy corporation and friend of George W. Bush, Alphonso Jackson is the perfect corporate pitchman ruthless enough to gut the Section 8 program as he smiles and claims that the latest stories coming from victims of his policies are merely a myth that needs to be debunked.

On May 20, in a remark that was widely condemned, HUD Secretary Jackson said he believed that "being poor is a state of mind, not a condition," while he was being grilled by a Congressional Finance Committee about the funding shortfalls that have savaged the Section 8 program.

The recent attempt by the White House to plunder the Section 8 program has led to a nationwide outcry from poor, elderly and disabled tenants, and from many housing authority officials. The Section 8 program was originally created back in 1975 to offer market-based housing assistance to the poorest of the poor. Until recently, it served nearly two million low-income families around the country.

The Section 8 program has had its critics and shortcomings through the years, but has been a very successful program over all in assisting the sick, elderly, disabled and the very poor to keep a roof over their head for the last 30 years.

Recent protests in Massachusetts are an indicator of what may happen across the nation. Massachusetts would have been forced to rescind vouchers from 3,700 families because HUD's new policy caused a $3.1 million gap in Section 8 funding. In response, more than 2,000 angry people showed up at the Massachusetts State House on April 16, for a hearing to determine how to deal with the funding crisis intentionally created by HUD. 

The outcry of poor people and mom and pop landlords affected by the Section 8 crisis foreshadows the impending catastrophe looming in the future.

The April 22nd HUD announcement that changed the guidelines on how the Section 8 program is being funded, already has created hundreds of millions of dollars in funding shortfalls across the nation, resulting in nearly 90,000 families with vouchers in fiscal year 2004 that are being terminated by local housing authorities across the nation, according to the Center on Budget and Policy Priorities.

In mid-May, angry Los Angeles officials joined a crowd of protesters in denouncing recent proposals to change the Section 8 program, which they said could result in at least 13,000 low-income Los Angeles families being displaced from their housing in the very near future.

On May 14, the Dallas Housing Authority posted a notice on its website stating it has closed the application list for Section 8 vouchers. Dallas officials also announced that they regret the need to terminate nearly 500 vouchers by the end of fiscal year 2004 to balance the books.

The Boston Globe reported on April 27 that 650 eviction notices were sent to Section 8 tenants due to the HUD-created crisis. More than 60 percent of the notices went to people saddled with disabilities, according to local housing officials.

This is a life-and-death matter to the AIDS patients that came out recently by the hundreds in Salt Lake City to protest the funding shortfalls taking place that now threaten to leave them without a roof over their heads along the foothills of the Rocky Mountains.

Nor is it a mere inconvenience to the more than 400 families in Tacoma, Washington, that are also on the verge of losing their housing vouchers since the program was sabotaged. These are real families feeling as though their lives have been shredded and that they are soon to be sold out and thrown away. 

At least 90,000 families across the country are suddenly facing the threat of homelessness, and as many as 20 percent of those facing this plight may be blind, disabled or elderly. These families are wondering how to go on, now that they are confronted with the cold-hearted reality of losing their much-needed housing. They have nowhere else to go.

A Los Angeles Times story in early June placed the figure much closer to about 100,000 low-income families now at risk of losing vouchers or suffering rent increases because of the new HUD formula for deciding how much local housing authorities are reimbursed for the voucher program, according to a new analysis by the National Association of Housing and Redevelopment Officials.

HUD Deputy Secretary Michael Liu said, "The present regulations keep the poor from seeking higher paying jobs, and by allowing them to pay more than 40 percent of their income for rent, the new regulations offer an incentive to motivate the poor into finding higher paying jobs."

Lynda Carson may be reached at tenantsrule@yahoo.com or (510) 763-1085.

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