Looming Changes in Government Housing Benefits

From an article in the Wall Street Journal on changes being considered to government housing benefits:

Currently, government housing benefits are generally open ended. Unlike welfare—which has a five-year limit—federal housing programs allow low-income Americans to receive rent vouchers or live in government complexes for decades.

The result is that people endure long waits to qualify for the program and sometimes celebrate almost like lottery winners when they get the word. In New York City, the average person stays in public housing for 20.7 years.

But President Barack Obama‘s fiscal year 2014 budget calls for “substantial expansion” of a 1996 demonstration project that allows select housing authorities to set restrictions on residents, or try other strategies to promote self-sufficiency. Only 39 housing authorities out of 3,200 nationally have this power currently. Congressional approval was required for each one.

This comes at a time when the number of households in need of housing assistance is exploding:

Meanwhile, HUD reported in February that a record 8.5 million low-income households without government housing assistance either paid more than half their monthly income in rent, lived in “severely substandard housing”—or both in 2011. That was up from 7.1 million such families in 2009.

“Nobody is representing those families; they don’t really have an organization looking out for them,” says Dan Nackerman, executive director of San Bernardino’s housing authority, which adopted five-year-time limits last year after finding that people were holding on to vouchers for eight years on average, while 45,000 people sat on the waiting list…

The recession and mortgage crisis swelled the ranks seeking federal rental assistance and led those with benefits to hold on to them longer. Well-publicized instances of fights and mayhem broke out in January near Detroit and New Orleans as people scrambled for scarce vouchers.

While there is agreement the current system is broken, not everyone approves of President Obama’s fix. The National Low Income Housing Coalition, an advocacy group, said the change would force people off housing assistance before they are ready.

“You are just cycling these families back to the end of these waiting lists,” says Linda Couch of the coalition. “The answer is more affordable housing; it’s not moving the deck chairs on the Titanic.”

Others feel differently:

Many who work with low-income families say that current housing policies provide little incentive to move on. Ideally, the government should tell residents, “Your housing is stable. Congrats, take a deep breath. What’s next?” says Sherry Riva, founder of Compass Working Capital, a Massachusetts nonprofit working with the Cambridge Housing Authority to help residents save money and set goals.