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By Howard Husock

America’s Trillion-Dollar Housing Mistake: The Failure of American Housing Policy.

Eye on the News

Howard Husock
Reining in Housing Vouchers
New York at last takes steps to reform its dependency fostering public housing system.
26 October 2004

Mark down Tuesday, October 22, as a banner day in the history of New York City public housing—and in the history of American public assistance for the poor. For decades, homeless advocates have argued that the thousands of people living in New York’s shelter systems proved the need for an ever-increasing supply of subsidized rental apartments. But now the city’s Department of Homeless Services has said publicly what its employees have long admitted privately: giving those in the shelters top priority to get one of the city’s federal Section 8 housing vouchers—they cap a family’s rent at 30 percent of its income and come with no time limit—has become “an incentive in many ways to enter the shelter system.” That is, they’ve become an open invitation to dependency, including for households that aren’t homeless at all.

In the past, a young woman who’s just had an out-of-wedlock child but who still lived at home with her mother or grandmother could qualify for her own virtually rent-free apartment simply by showing up at a shelter and declaring herself “homeless.” All that term meant is that her living arrangements had become too cramped. No surprise that almost none of the 4,600-plus households that Homeless Services placed in rent-subsidized apartments last year—up from 1,700 just three years ago—were actually living on the street, as the term “homeless” implies. Instead, lured by the promise of cheap rent in perpetuity, individuals flooded into the shelters from apartments where they were paying, or helping to pay, the rent. “For a long time,” says a DHS spokesman, “we’ve known that Section 8 is seen as the pot of gold that you can get by declaring yourself homeless. We’ve heard it all the time—that people are coming in order to get an apartment.”

Incredibly, the department announced last week that it’s doing something about the problem. Starting immediately, new families coming to the city’s Emergency Assistance Unit not only will be unable to move to the head of the list for housing vouchers, as has been the case hitherto, but in fact will not be eligible for the vouchers at all. Henceforward, a young mother will have to continue to live with her mother or grandmother if she can’t afford to live on her own.

The city’s new approach doubtless has much to do with the Bush administration’s push to stop the wild growth of the Section 8 program, the cost of which has exploded from $5 billion a year in 1997 to $16 billion today—matching expenditures on federal cash welfare payments under the far-better known Temporary Assistance to Needy Families (the former AFDC). The Bush housing team has asked Congress not to increase the Section 8 budget—a first for HUD. As a result, New York City’s allotment of federal vouchers—rising from 70,000 to 114,000 over the past six years and creating large Section 8 ghettos in the Bronx and Brooklyn—won’t increase. The city can thus no longer promise a federally subsidized apartment to those arriving in the shelter system, since the supply of new subsidies has gone dry.

This being New York, the city could not announce its tough new policy without also supplying the fig leaf of a new welfare program. Homeless Services Commissioner Linda Gibbs has accordingly said that she will seek assistance from the state’s Office of Temporary and Disability Assistance to provide state-funded housing vouchers to chronically homeless single parents—actual street people—seeking to “reunify” with their children placed in foster care.

But even this so-called Housing Stability Plus program would carry a five-year time limit, with the subsidy declining 20 percent every year from the outset until it hits zero. This is the first proposal for a major new housing program in New York that includes a time limit, similar to the one that has attached to cash public assistance since welfare reform passed in 1996.

The obvious question arises: Why not time limit the whole Section 8 program, in which the median household now spends eight years, or, for that matter, public housing, in which the New York City participant now spends more than 17 years? Temporary assistance that is not. Even short of that step, however, we can now expect the surge of those entering the city’s shelter system to slow, as the message goes out that the Section 8 pot of gold is now empty, and that the time has come to make good life decisions, including paying the rent rather than depending on Uncle Sam do it.

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