By Eugene T. Lowe
February 17, 2003

The Administration's FY2004 budget proposes to convert the Department of Housing and Urban Development Section 8 housing voucher program, which is currently administered at the local level, to a state block grant. The program, "Housing Assistance for Needy Families "(HANF), would be funded at $13.6 billion (including both voucher renewals and incremental vouchers). The budget would also eliminate the popular and effective HOPE VI program which revitalizes severely distressed public housing.

The HUD budget asserts that there "are a number of advantages to providing the voucher funds to the states." States, it is said, would have more flexibility than public housing authorities to address "problems in the underutilization of vouchers that have occurred in certain local markets." The increased flexibility to states, provided through "program laws and rules" would "allow states to better address local needs and to commit vouchers for program uses that would otherwise would go unused." With HANF, the budget concludes, HUD would manage "fewer than 60 grantees compared to approximately 2,600 today."

According to the budget, HOPE VI, which was funded at $574 million in FY2002, is terminated because its purpose has been served with the demolishing of 100,000 of the most severely distressed public housing units. The budget also says that there are funds in the pipeline for HOPE VI which is still available.

In a press release on February 4, the Council of Large Public Housing Authorities (CLPHA) makes several arguments against the block granting of Section 8 vouchers to states:

• Increases administrative costs and reduces funds available to assist needy seniors, persons with disabilities and families with children.
• Adds new layer of bureaucracy between Federal Government and local agencies and their tenants.
• Interferes with local agencies expertise and decision-making in carrying out local housing strategies.
• Jeopardizes increasingly successful housing program based on an unproven and theoretical notion.
• Bases proposal on inappropriate model of the TANF program, a long'standing function of state government.
• Contradicts the experiences of states including California, West Virginia, Virginia and Missouri who have relinquished their Section 8 voucher programs.
• As for the termination of HOPE VI, the CLPHA press release argues the budget:
• Kills award-winning, ambitious and highly successful program that transform severely distressed public housing into healthy and revitalized mixed-income communities.
• Abandons the single most significant new federal housing initiative that has produced dramatic results in some of America's worst neighborhoods.
• Rejects widely hailed model of comprehensive mixed-income, mixed-finance neighborhood revitalization that reduces concentrations of poverty.
• Strands the residents of 48 communities that have already demolished 11,100 homes and await revitalization grants.
• Eliminates opportunities for private investment in affordable housing and job creation reducing the cost to the federal government.

It, of course, remains to be seen what congress will do with these budget proposals. As reported in the February 8 National Journal, Senator Christopher S. Bond (MO), Chair of the Senate VA, HUD and Independent Agencies subcommittee, has always been a strong proponent of HOPE VI. And while Senator Wayne Allard (CO), Chair of The Senate Housing Subcommittee favors the block granting of Section 8 vouchers to states, there is still the experience of several states who have given back their voucher programs to local housing authorities because they didn-t have the administrative system to run them.