President's Proposed FY 2006 Housing Budget Cuts Hurt Illinois Families

In a time of rising housing costs, declining wages, and high unemployment, providing affordable and stable housing for those in need should be the hallmark of any sound national agenda. Instead President Bush’s proposed 2006 fiscal year budget for federal housing programs, combined with the deep cuts those programs suffered in the 2005 fiscal year, may signal the end of the Housing Choice Voucher Program as a reliable anchor for needy families.

The struggles faced by Illinois families and the agencies trying to provide decent, affordable housing to them are emblematic of the housing difficulties nationally. According to a study by the Center on Budget and Policy Priorities, 3,415 Housing Choice Vouchers in Illinois will be lost because of federal cuts this year. By 2010 nearly 16,000 eligible Illinois families will be without housing assistance. Nationally approximately 80,000 vouchers were eliminated with the 2005 budget cuts. By 2010 as many as 370,000 vouchers, of the two million total, could be eliminated with the 2006 cuts.

In light of the 2005–2006 cuts, large and small housing authorities are struggling with the loss of funding. Nearly all of the Illinois housing authorities will shelve their waiting lists for now. According to a study conducted two years ago by the Mid-American Institute on Poverty, 133,458 families are on the Housing Choice Voucher and Public Housing waiting lists in Illinois, and nearly one-third of the waiting lists were already closed.

Some housing authorities may have to make the ultimate decision—whether to terminate families from the program. The McClean County Housing Authority plans to terminate 64 families from the program by April 30, 2005. Until last year, the housing authority managed only 22 Housing Choice Vouchers and no public housing. When the subsidized property Landcaster Heights in Normal, Illinois, opted out of its contract, 198 vouchers were added to McClean’s supply in December 2003. Many of the same families who lost their housing at Landcaster Heights will now lose the only thing that the end of the Project-based Section 8 contract gave them—a Housing Choice Voucher.

The Ford County Housing Authority will terminate five families from its voucher program but is offering apartments in the county’s public housing as an alternative. Woodford County Housing Authority will decrease by 4 vouchers to 236.

The Oak Park Housing Authority estimates that it will have to terminate 14 families from the program unless it can avail of local or private resources. It has requested $150,000 in emergency funding from the Oak Park Village Board.

Some authorities are trying to reduce cost with measures other than voucher termination. Like many other housing authorities in Illinois, the Elgin Housing Authority has reduced its payment standard, from 110 percent to 90 percent, making it next to impossible for families to compete for rental units with private market renters. The Springfield Housing Authority announced plans to reduce the number of vouchers available by more than 100, but likely through attrition and not termination of current program participants. Other housing authorities will deny all landlord requests for rent increases and increase tenant rent burdens where appropriate.

The Chicago Housing Authority, the largest Housing Choice Voucher administrator in the state, has already imposed a minimum rent for voucher recipients and has increased its criminal histories review of participants and applicants from two to three years.

Other Illinois housing authorities say that they will deny portability moves, often the main way families access economically thriving, job-rich areas of the state, as well as moves within the housing authority jurisdiction, if they do not have enough money to subsidize families who want to move to a higher-cost area or unit. The U.S. Department of Housing and Urban Development (HUD) is allowing housing authorities to deny these moves if based on insufficient funding from 2005 and after they confirm that the receiving housing authority will not absorb the voucher. HUD will not require the denying public housing authority to seek a waiver from HUD.

Senate Rejects Community Development Block Grant Cuts

Earlier this month the U.S. Senate rejected efforts by the Bush administration to cut the Community Development Block Grant (CDBG) program by $2 billion and move it to the Commerce Department. The Senate amendment would maintain CDBG spending levels and keep the program with HUD. Advocates are still concerned that other needed programs would be cut to make up the difference.

The program, aimed primarily at assisting low-income neighborhoods, also indirectly funds nonprofit institutions working on behalf of families in those neighborhoods. In Chicago low-income renter and fair housing advocacy organizations such as the Lawyers’ Committee for Better Housing, the Metropolitan Tenants Organization, and the Leadership Council for Metropolitan Open Communities could be affected by the projected cuts.

For more information, contact Kate Walz at 312.263.3830 ext. 232.