The federal sequester chops $13 million from Oregon’s social-service network, leaving housing and homeless programs bracing to absorb the hit
By Jake Thomas and
Joanne Zuhl, Staff Writers
By now, every
American is probably familiar with the term and concept —— if not the reasoning
behind —— the national budget sequester.
As of March 1,
evidence of its fallout nationally has been trickling in, from international
airline delays to local job furloughs. But the impact on some of the poorest
populations remains a slow burn. The Department of Housing and Urban
Development is taking a 5 percent cut across the board, with its primary
programs —— Section 8 vouchers, homeless assistance, housing loan services ——
impacting millions of low-income citizens.
“A 5 percent cut
may not seem like a big deal, but to a family it’s 100 percent,” said Leland
Jones, HUD’s regional spokesperson based in Seattle. Jones said that the
sequester will mean fewer services for fewer families.
One of the largest
single casualties is Section 8 Housing Choice Vouchers, which provides rental
subsidies for the elderly, disabled and impoverished. Prior to this sequester,
Congress had traditionally protected funding for the actual Section 8 vouchers,
regardless of cuts elsewhere in the program budget. The wholesale nature of
sequestration changes all that. According to a report by the Center on Budget
and Policy Priorities, the voucher program will lose an estimated $938 million
from 2013. (Read the complete report from the Center here.)
HUD Secretary Shaun
Donovan has said these cuts could put 125,000 individuals and families at risk
of losing their Section 8 Housing Choice Vouchers, resulting in more than 100,000
formerly homeless people becoming at risk of returning to the streets. It could
also result in 75,000 fewer households receiving foreclosure prevention or
other counseling, in addition to deferred maintenance to public housing among
other effects.
HUD estimates that
Oregon will see a $13 million reduction in funding for HUD programs for the
upcoming fiscal year. The bulk of that is $11 million in cuts to tenant-based
rental assistance, a HUD subsidy to help households rent market-rate units,
impacting nearly 2,000 families. According to HUD, Oregon will see a $641,000
reduction in HOME funds, which are used to create affordable housing, resulting
in fewer units being produced. Funding for HUD homeless programs will be
reduced by $1.2 million. Another HUD program helping people with AIDS find
housing will see a $73,000 reduction in Oregon as well.
In Portland,
government and social-service agencies that rely on HUD funding, are expecting
the cuts to be painful, even if their precise damage is to be determined.
For Portland’s
housing authority —— Home Forward —— sequestration means between $4 million and
$5 million in funding reductions.
HUD provides about
three-quarters of Home Forward’s annual budget, which this year was adopted at
nearly $121 million.
The cuts come in
myriad tiers —— applied to administration, operating funds and capital. But by
far, the bulk of the cut from HUD, more than $4 million, will hit rent
assistance funds that come through the housing authority and go directly to
landlords to pay rent for low-income residents. The sequestration took a
hatchet to a sacred budgetary cow by chopping 5 percent of reimbursements to
Section 8 Housing Choice Vouchers, which means that HUD will only pay Home
Forward 95 percent of what it pays out in Section 8. This means some cuts at
the administration level, along with possible increases in the amount renters’
pay for their housing.
“The housing
authority system in this country is in as much jeopardy as it has been ——
ever,” says Steve Rudman, Home Forward’s executive director, who described it
as far worse than the war on welfare during the Reagan administration. Rudman
put the blame squarely on a Congressional game of chicken that is
“nickel-and-diming” the most vulnerable.
“These are just
easy little cuts to people who don’t have any power,” Rudman said. “We’re like
pawns in their game.”
Home Forward
anticipates that much of the $4 million sequestration dent can be absorbed by
its own reforms in Section 8. Years of budget constraints had prompted Home Forward
to revamp its payment structure for the approximately 10,000 very low-income
households it serves, adding incentives for people to transition back to work
and off assistance. In some cases, renters could see the percentage they
contribute to rent increase. That revenue had been intended to meet the growing
demand for Section 8 vouchers: Last year 3,000 people joined the waiting list
out of 21,000 who applied. They will be waiting another year before any more
vouchers are released.
“We might be able to
skate through, but there’s going to be an impact longer term,” says Rudman.
“That money could have been put into all kinds of useful things, instead of
backfilling the federal government on the backs of the poor people.”
In addition to the
cuts, the Portland rental market is nearly sealed up with vacancy rates at less
than 4 percent. That rate drives rents higher. So costs are going up while the
federal government is pulling out.
Northwest Oregon
Housing Authority manages Section 8 vouchers for nearly 1,100 families in
Columbia, Tillamook and Clatsop counties, providing about 20 to 30 new vouchers
every month. The cut there mean no new recipients for the vouchers beyond
attrition, or about six to eight vouchers a month, according to NOHA Executive
Director Todd Johnston.
“I think for the
short-term, it’s sustainable —— six months at the most. But I think long-term,
it’s going to affect our staff and that’s ultimately going to affect our
clients and our ability to respond and get things up in a timely matter,”
Johnston said.
Johnston said the
impact is not just the sequester itself but the ripple effect of falling behind
on meeting families’ needs, overburdening fewer staff to meet the myriad HUD
requirements with landlords. Landlords unhappy with inspection schedules and
agency services are more inclined to disallow Section 8 renters altogether.
There is also the
expected shift in caseloads to other social services as people fall through the
cracks into homelessness. It is especially difficult in the rural communities
of Northwest Oregon, where people rely on seasonal, self-employment and
low-income service jobs to get by, Johnston says.
“The safety net
just isn’t here,” Johnston says of his region.
“If this goes on for the long term, the effects are just going to be
compounded. If this becomes a trend, or a long-term proposition, people are
going to have to start looking at other options.”
Those options are
bleak —— including people living out of cars or outside, Johnston said.
In the Clackamas
County Housing Authority, interim director Dan Potter says they will have to
cut back in staff, but they hope to absorb most of the loss in voucher payments
with financial reserves. In addition to public housing, the county serves more
than 1,600 recipients on vouchers for the elderly, disabled and families with
children.
While the
state-directed funding is distributed to various smaller municipalities and
agencies across Oregon, the Portland Housing Bureau receives its own pool of
HUD funds. This year, PHB is anticipating a 10 percent reduction to its
programs due to HUD’s sequestration, including a projected loss of $770,178 in
Community Development Block Grants and $292,039 in HOME funds, respectively.
The PHB also projects a $78,216 reduction to its Emergency Solutions Grant,
which is used for homelessness-relief programs. Additionally, the PHB projects
a $109,072 reduction to Housing Opportunities for People with HIV/AIDS.
As a result of
these cuts, the PHB anticipates that 65 households will not receive short-term
rent assistance, 14 households with HIV/AIDS will not receive rent assistance
and 130 households from communities of color will not receive homeownership
education and counseling.
“Short-term rental
assistance and affordable rental housing, both of which utilize federal funds,
are two effective tools in keeping people off the streets and in homes,” said
Portland Housing Bureau Director Traci Manning in a statement to Street Roots.
“We’re still operating on the assumption of our budget forecast, which would
mean a $1,249,505 reduction in federal funds, because we have not received
allocations or new information from HUD.”
Multnomah County’s,
safety net services, including aging and disability programs, domestic violence
services, and mental health and addiction treatment, are anticipating a $4.3
million hit. This includes funding for direct services for homeless families,
the disabled and the elderly through a variety of organizations. (Multnomah
County’s HUD funds are recieved through federal, state and local streams.)
For Mary Li, the
director of the Community Services division of the Department of Multnomah
County Human Services, the cuts leave her sad and frustrated with lawmakers in
Washington D.C.
“In many ways, it’s
a very cynical calculation that in no way takes into account the real harm that
is going to befall communities as a result of this gamesmanship,” Li said. “I
expect better.
“I have great faith
and belief that we in the county can figure how to best help ourselves,” Li
says. “We can’t do that without the resources, and the federal government must
come to the table. ... The citizens of Multnomah County will save the citizens
of Multnomah County before the government does, but the federal government
needs to send the resources to us.”
Oregon Opportunity
Network represents nonprofit and low-income housing developers that house more
than 72,000 families across the state. The financial blow from the HUD cuts are
among many they have been dealt from local, state and federal sources.
“Our members are working
hard on the front lines to help struggling Oregonians, and these cuts are on
top of previous cuts and continued disinvestment at the federal level,” says
Ruth Adkins, policy director for Oregon ON. “They’re working in an extremely
complex and challenging regulatory environment, as well as facing an
overwhelming human need.”
Adkins says it’s
still too soon to see how this will play out among families, but that the
wholesale nature of the sequester leaves few services untouched.
“We’re all
interconnected,” Adkins said, referring to not only housing cuts but also cuts
to education, infrastructure and other programs that help vulnerable and
middle-class populations. “It’s really discouraging. To succeed you need a
place to call home.”
Tony Bernal,
development director at Transition Projects, said that at this point it’s
unclear how the cuts will play out. Transition Projects gets part of its
funding from multiple federal sources, some of which pass through local
governments, making it difficult to anticipate exactly how his organization
will be impacted.
“HUD is a
particularly complicated story,” he says.
However, he does
say that the cuts to Home Forward will have ripple effects because
organizations like his direct clients to it as a housing resource.
“For all the mainstream providers, that’s
going to be a real problem because that’s a major source of low-income
housing,” he says of the cuts to Home Forward. “It’s really ripping holes into
the social safety net.”
He says that the
one bit of good news in the budget is that Transition Projects will see an
increase in a HUD rent-assistance grant for the upcoming fiscal year.
Jean DeMaster is
the executive director of Human Solutions, which like Transition Projects, gets
its funding from a variety of government sources. The details of the direct
impact aren’t yet known, she says. However, she is preparing for at least a 10
percent cut, which will mean fewer services for fewer people, said DeMaster.
“I can’t say that
one thing is going to hurt the most,” said DeMaster. But she added that the
cuts to HUD’s Community Development Block Grants and federal heating assistance
programs will be significant.
