Report Criticizes Proposed Reductions in Section 8 Housing Program -- June 11, 2004 -- California Capitol Hill Bulletin -- Volume 11, Bulletin 19

More than 35,000 low-income families in California could lose their federal housing assistance in 2005 and up to 86,000 by 2009 under the Administration's proposed budget cuts to the Section 8 program, reports the California Budget Project (CBP) in a recent Budget Brief. Released in April 2004, the brief is based on a March report by the Center on Budget and Policy Priorities (CBPP) and focuses on the reported impact of federal budget cuts on housing in the state.

The Housing Choice Voucher Program, otherwise known as Section 8, is the principal federal low-income housing assistance program administered by state, local, and regional housing agencies. Currently, Section 8 supports more than 2 million low-income households nationwide. The program requires agencies to ensure that 75 percent of recipients each year have incomes at or below 30 percent of the area median income, which is $18,750 in California and $17,250 nationally. Recipients are required to contribute 30 percent of their income toward rent and utilities, with the voucher, up to a specified limit that is set by the housing agency, paying the remaining share of costs.

The President's FY 2005 Budget proposal proposes to decrease funding for Section 8 housing vouchers by more than $1 billion below the FY04 level and replace the current housing voucher program with a block grant to local housing agencies called Housing Assistance for Needy Families (HANF). The report argues that implementing the Administration's proposal could result in 250,000 low-income families nationwide losing their federal housing assistance in FY05 (of which 35,700 live in California), and a total of more than 600,000 losing their assistance nationwide over the next five years (of which 85,700 live in California).

As a result of the proposed measure, the report asserts, housing agencies would each have to cut the number of families receiving vouchers by about 12 percent by 2005 and by 29 percent by 2009 (California's housing agencies currently administer a total of 294,708 vouchers throughout the state). The report predicts that housing agencies could raise recipients' annual share of rental costs by more than $1,000 by 2005, and by nearly $2,700 by 2009, in order to deal with the proposed cuts. CBPP predicts that the change would reduce California's Section 8 voucher funding by $316 million in 2005 and by $843 million in 2009.

The CBP report also contains a county-by-county breakdown of its assessment of the impact of the Administration's housing cuts. A larger CBPP report includes a state-by-state list on the predicted impact of the proposed changes as well as the methodology used to determine its expected results.

To view the CBPP report, please visit http://www.cbpp.org/2-12-04hous.htm , and to obtain a copy of the CBP Budget Brief, please visit http://www.cbp.org .

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