WASHINGTON -- The Bush administration wants to give states control of federal vouchers that help nearly 2-million families pay the rent, a major shakeup for one of the government's largest housing programs.
Administration officials say states could more efficiently manage the vast Section 8 rental program covering 2,600 local housing authorities. About $1-billion in vouchers went unused last year, roughly 8 percent of the program budget.
"Section 8 is sort of broke" and in need of repair, Housing and Urban Development Secretary Mel Martinez told a Senate subcommittee recently.
Critics of the proposed shift -- mainly Democrats and low-income housing advocates -- worry that states would establish a variety of different standards governing who could qualify for the housing subsidies. They also say the change would further burden states, many of which already are struggling with budget problems.
"The voucher program could use some improving," said Irene Basloe Saraf, legislative director for the National Low Income Housing Coalition. "But not to the extent and the type of change that the Bush administration is proposing."
The Section 8 program was started in 1976 to help low-income residents afford housing. Families that make less than 50 percent of an area's median income are eligible for vouchers, with some exemptions available for the elderly and disabled.
People apply for vouchers locally and recipients can use the money to rent private housing. Typically, participants pay no more than 30 percent of their monthly income in rent, with vouchers covering the rest. Nationally, a voucher on average covers $500, though that varies among cities.
The proposal could improve the Section 8 program if there is limited federal regulation and adequate funding to the states, said Barbara Thompson, executive director of the National Council of State Housing Agencies.
Some cities have long waiting lists for vouchers. Federal regulations require that three-fourths of those families who do get vouchers after being wait-listed be from the lowest income brackets.
Critics fear states wouldn't be required to abide by that regulation if HUD makes the switch. Additionally, the administration isn't proposing enough money as it is to keep pace with rising rents, said Beth Cooper, a policy analyst with the National Association of Housing and Redevelopment Officials.
Full details of a planned shift have yet to be released, but critics also fear states may be allowed to limit the time someone is on vouchers, as with welfare programs.
President Bush proposed the switch in his 2004 budget plan, which includes about $13.6-billion for the vouchers, roughly $1-billion more than this year. That would fund the 1.8-million families on vouchers now, plus a reserve of 100,000 that housing officials can apply for from HUD if needed.
Under the plan, which must be passed by Congress, money would go to the states in one lump sum each year and states would then distribute the vouchers to local housing agencies that apply for them.
Congress last year gave HUD the power, for the first time, to fund only those vouchers that are used. Previously, local authorities were given money for all vouchers allocated the previous year leading to the more than $1-billion a year in unused vouchers.
Martinez said the revised program would be more efficient because HUD would oversee only the states instead of thousands of local authorities.
Opponents contend vouchers also go unused because recipients in tight housing markets can't find an affordable apartment even with the help. They say that new funding guidelines installed this year already help HUD reduce the number of unused vouchers, so switching oversight is unnecessary.