Federal Bill to Reform Voucher Program Introduced

H.R. 1851, the Section 8 Voucher Reform Act of 2007 (commonly referred to as “SEVRA”), was introduced in the U.S. Congress last month. Rep. Maxine Waters (D-CA), with cosponsorship from Illinois’s own Rep. Judy Biggert (R) and others, based this year’s bill on a similar bill from the 109th Congress aimed at reforming and improving the voucher program. The bill is currently before the House Financial Services Committee. The Sargent Shriver National Center on Poverty Law, Metropolitan Tenants Organization, Chicago Area Fair Housing Alliance, and Housing Action Illinois are meeting with Rep. Luis Gutierrez (D-IL), who sits on the House Financial Services Committee, to discuss how he can support this important bill.

SEVRA proposes several improvements on the Housing Choice Voucher Program, a housing subsidy hard hit by budget cuts and disastrous funding formulas over the last few years. SEVRA proposes a new funding formula for the voucher program by basing funding on the actual costs of administering vouchers for the prior calendar year. This proposed change builds off and makes permanent Congress’ 2007 fiscal year funding resolution, which determined voucher funding based on the cost—adjusted for inflation—of vouchers in use for the most recent 12 months.

SEVRA would allow housing authorities or agencies administering the voucher program to keep up to one month of reserve funding (fund balances accrued over the last two years) for use in 2008. After that time, agencies may keep up to 2 percent of their annual funding as reserves. This change in reserve funding should enable housing authorities to cover unexpected costs that are unavoidable in the voucher program in part due to its reliance on the ever-changing private rental market.

This change in the reserve funding should help promote portability, or the right of a Housing Choice Voucher recipient to move from one housing authority jurisdiction to another. The U.S. Department of Housing and Urban Development’s recapture of excess dollars would then be dispersed to housing authorities experiencing financial needs as a result of costs related to portability or in certain cases the Family Self-Sufficiency Program. By simplifying the currently complicated billing system, SEVRA should provide voucher recipients with a better chance to move to communities with economic and social opportunities. Advocates for portability, however, would still like to see language included in SEVRA requiring that receiving agencies (where the voucher holder is moving to) absorb the voucher rather than force the sending agency to bill for payment.

Tenant protection vouchers, issued to replace lost public or federal subsidized housing units, would see improvements under H.R. 1851. Tenant protection vouchers currently replace only occupied housing units. SEVRA would replace all lost federal subsidized or public units, whether occupied or not, necessary to make a community whole for the permanent loss of hard units of affordable housing.

SEVRA would simplify the rules determining tenant rent payments for the voucher, public housing, and federally subsidized housing programs. While tenants would still be required to pay generally 30 percent of their income toward rent, SEVRA would streamline and increase certain deductions and simplify the rent determination process overall for families. These measures could mean substantial cost savings for housing authorities.

SEVRA would make changes in housing quality inspection rules, which require housing authorities initially to inspect prospective voucher units, and thereafter annually inspect the housing, to ensure it meet federal housing quality standards. SEVRA would require inspections only every two years after the initial inspection and would allow housing authorities to initiate payments to property owners for new units even if the housing technically fails the inspection, as long as the failure is not of a life-threatening nature. This change could ease administrative and delay complaints commonly associated with the Housing Choice Voucher Program and encourage more property owner participation in the program.

Advocates are relieved that H.R. 1851 would not propose an expansion of the Moving to Work (MTW) demonstration program, an initiative which provides certain housing authorities with broad waivers with respect to certain housing policies, rules, and laws. In last year’s incarnation of the bill, the MTW demonstration program would have expanded MTW from 24 housing authorities nationally, including the Chicago Housing Authority in Illinois, to 40 housing authorities. While some MTW-designated housing authorities have used this flexibility to enact programs to support their low-income tenants, anecdotal evidence reveals that this flexibility has also diverted funds from housing assistance for needy families to non-housing-related housing authority needs.

For more information, contact Kate Walz at katewalz@povertylaw.org or go to www.cbpp.org or www.nlihc.org.