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CES In The News

U.S. House of Representatives Housing Subcommittee
July 1, 2003
Housing Subcommittee Considers Section 8 Program

http://financialservices.house.gov/media/pdf/070103lg.pdf

On July 1, 2003, the House Financial Services’ Housing and Community Opportunity Subcommittee held a field hearing at the California Science Center in Los Angeles, entitled Section 8 Housing Assistance Program: Promoting Decent Affordable Housing for Families and Individuals who Rent. CES Executive Director Larry Gross was invited to present testimony to the Subcommittee. The Subcommittee also held another field hearing examining Community Development Block Grant (CDBG) implementation in the Los Angeles area (see article below). Subcommittee Chairman Bob Ney (OH) joined Ranking Member Maxine Waters (Los Angeles) in welcoming witnesses representing mostly local interests. The hearing focused on the Administration’s Housing Assistance for Needy Families Act of 2003 (HANF - H.R. 1841), recent legislative proposals to cap and restrict Section 8 administrative fees, and current implementation of Section 8 Housing Assistance in the Los Angeles area. The Subcommittee also received recommendations from the Los Angeles housing stakeholders with respect to how the Program can be improved.

The Section 8 Housing Assistance Program provides low-income, elderly, and disabled persons with housing assistance vouchers. The Bush Administration recently put forth a HANF proposal that would place Section 8 vouchers in a block grant program for the states and consolidate administration of the program at the state level. The Administration argues that shifting control from the federal government to the states would give states more flexibility in using federal housing dollars and remove some federal rules.

The Subcommittee members heard testimony from the following witnesses: Mr. Matthew O. Franklin, Director, Housing and Community Development, State of California; Mr. Donald J. Smith, Executive Director, Housing Authority of the City of Los Angeles; Mr.  Carlos Jackson, Executive Director, Los Angeles County Community Development Commission; Mr. Larry Triesch, Assistant Deputy Director, Long Beach Housing Authority; Mr. Eugene Burger, President, Eugene Burger Management, appearing on behalf of National Leased Housing Association; Mr. Tom Shelton, CPM, Geystar Real Estate Partners and President of the National Apartment Association, appearing on behalf of the National Multi Housing Council; Mr. Jeff Farber, LA Family Housing Corp.; Mr. Larry Gross, Coalition for Economic Survival; Mr. John Jackson, Head Organizer, ACORN; Ms. Beverly J. Martin, Owner/Landlord, Housing Units, City of Los Angeles; Ms. Chanda C. Peters, Eligibility Interviewer of the Housing Authority, City of Los Angeles; Ms. Ruth Schwartz, Executive Director, Shelter Partnership, Inc.; and Ms. Leona Thompson, Eligibility Interviewer of the Housing Authority of the City of Los Angeles.

All witnesses testified in strong opposition to the HANF proposal, arguing to varying degrees that the current Section 8 Program is functioning efficiently.  Mr. Franklin maintained that: “By wiping out the Congressional commitment to fully fund voucher renewals and account for real program costs and rent, HANF would seriously undermine the federal Housing Choice Voucher Program (HCVP). It would eliminate one of the Program’s most valuable features-its focus on serving extremely low-income families.” He pointed to the statewide utilization rate of 96 percent, which exceeds the U.S. Housing and Urban Development (HUD) requirement of 95 percent utilization, and to the currently very low vacancy rates of below 5 percent, as evidence that the current structure is working well. Mr. Jackson and Mr. Triesch also testified that both Los Angeles County and the City of Long Beach utilization rate was 100 percent. The rest of the participants joined Mr. Franklin in arguing that conversion of the program into a state-administered block grant would result in a lack of local control, loss of input and responsiveness to local market conditions, uncertainty of funding given the state’s dire financial situation, and the addition of a new and costly layer of bureaucracy between the federal government and public housing agencies.

Addressing the issue of several administrative fee proposals, which would limit the Section 8 administrative fees to 10 percent and place restrictions on the use of such fees, several participants expressed reservations. Mr. Jackson contended that limiting the administrative fees would result in an approximate 18 percent reduction in the current funding level. Witnesses urged additional flexibility to public housing authorities to set payment standards on Fair Market Rents (FMRs), more regional collaboration of the voucher program to help address administrative barriers, and increased funding to fund the greatest possible number of incremental vouchers while awarding them to localities on the basis of demonstrated need, not just performance.

California has a growing housing crisis. It is a product of both growing population -- 35 million expected to grow by 60,000 a year through the decade -- and the shortage of new housing supply, which some estimates place at 100,000 fewer units per year than is needed to keep up with population growth. The Los Angeles area is particularly vulnerable with respect to increasing housing costs. According to the California Association of Realtors (CAR), only 29 percent of Los Angeles households could afford the lower April 2003 median home price and 61 percent are renters, even though the latter is not necessarily a cheaper alternative since the average monthly rent in Los Angeles County as of December 2002 was $1299.

To obtain the testimony of CES Executive Director Larry Gross, please visit the Subcommittee’s website at:

http://financialservices.house.gov/media/pdf/070103lg.pdf


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