Voucher Funding Issues

2010

Some PHAs are reporting funding shortfalls or have taken actions to reduce costs.

Congress again in the annual appropriations for FY 2010 set forth the voucher funding formula. (The formula has not yet been included in the authorizing legislation for the voucher program; but the Section Eight Voucher Renewal Act (SEVRA) proposes to remedy that issue.) The FY 2010 funding formula was based upon leasing and cost data from FY 2009, with a HUD-established cost adjustment factor for 2010. As with prior years, no PHA can fund more vouchers than authorized by HUD. In contrast to the formula used in FY 2008 and 2009, HUD is not authorized to reduce renewal funding eligibility for PHAs with “excess” balances of reserve funding.

2009

Some public housing agencies (PHAs) have experienced significant voucher funding problems in fiscal year 2009. These problems can be attributed to a number of reasons including:

• Congress underfunded voucher renewals by $250 million;
• the final FY 2009 appropriations was delayed from October 2008 to March 2009 and PHAs did not learn from HUD of their funding levels until May of 2009;
• some PHAs’ reserves were lower than what HUD had anticipated;
• families have lost jobs and income due to the current economic crisis;
• rents continue to increase thereby increasing the required subsidies;
• HUD data, on which it based the individual funding levels for some PHAs for FY 2009, was not accurate;
• vouchers are not turning over as rapidly as in prior years due to the current economic situation.

HUD is working with individual PHAs to address the current voucher problem. Suggested strategies include the use of program and administrative fee reserves, the use of non-voucher funds, and the adoption of policies to cut costs.

HUD published a notice on October 23, 2009, which outlines steps that a PHA may take to reduce costs. Other steps are set forth below in the document created in 2005 to respond to the short falls experienced in that year.

2001 and 2005

In 2004 and 2005, PHAs faced a voucher funding shortfall for different reasons than are forcing the current voucher shortfall. At that time, the Center on Budget and Policy Priorities and NHLP developed a chart setting forth options that PHAs could adopt to cut costs. The alternatives set out in that chart are still useful today.

Cases

(Redacted) v. Woodbridge Housing Authority

Voucher tenants sued the Woodbridge Housing Authority because it terminated their leases due, in part, to overleasing, prior to a HUD analysis of the PHAs finances, in violation of the Section 8 Administrative Plan and in violation of due process.

Scott v. U.S. Department

Voucher tenants sue HUD and public housing agency to enjoin decrease in payment standard to 90% of Fair Market Rents.

(Redacted) v. Elgin Housing Authority

Voucher tenants, who were terminated from the voucher program, sued the Elgin Housing Authority for promissory estoppel, equitable estoppel, violation of due process and various statutory violations.