Housing Assistance Corporation Blog

Editorial: What Sequester? Here's What.

Posted by Laura Reckford on Mon, Aug 12, 2013 @ 10:00 AM

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By Rick Presbrey

Many will say, “so what is the big deal with the federal sequester?’ It hasn’t made any difference to me!”

We work hard at HAC to carefully manage our financial resources and to balance our budget each year. Each year we make our best estimate of what we expect our agency
income will be for the next twelve months and then adjust, or try to, our
expenses for the year. Our budget year begins on July 1.

This past year, beginning in January of 2013 we eliminated over $500,000 in salaries in
anticipation of what we were seeing happening in the current year and expected
to happen in the coming year. Not fun.

The federal sequester has been hanging over our heads and we recently got the news that our
Section 8 administrative reimbursement would be cut about 15% for the year and
that the payment to property owners would be reduced by 6%.  We pay property owners each month the difference between what the tenant pays ($30% of their income) and the total
rent. The average annual income for a person receiving Section 8 assistance is
$15,700 per year. A typical property owner receives about $830 per month from
us under the program. About 7% of the people leave the program each year but
our reductions are in addition to that.

Since we receive our federal funding for this program through the state which operates
the program statewide, how we reduce the cost of our payments to property
owners is their decision and they have been discussing it with us.

One way is to reduce the rent payments to property owners; the other way is to increase
what tenants pay towards the rent. Some of the units rented are in projects
financed with the help of the state. Cutting rents to property owners would
likely mean that some or many might leave the program causing the tenants to
lose their housing. If rents were reduced in state aided developments the
budgets in those developments would go out of balance.

So guess what: it looks like the decision will be to raise the amount that tenants have
to pay. Maybe we should call it “less affordable” housing. The problem is, of
course, that those who will pay more as a result of the sequester, in this
case, are the ones who can least afford it.  And the ones that have the least voice in our
system.  So their suffering will go
unrecognized. 

And next year, and for the next nine years, there will be equivalent additional
reductions each year making whatever is cut less sustainable.

As administration is cut, agencies like ours will do a poorer and poorer job
keeping track of the quality of the units rented, the punctuality of paperwork,
the rechecking of calculations to determine rents, etc. and there will be the
ensuing scandals about how bad the program is being run and how the government
can’t do anything well.

And tenants will gradually pay a larger and larger share of their meager income with more
evictions for nonpayment, more credit card debt, more unpaid utility, health
care and car repair bills and on and on all in the name of the sequester where
the wealthiest are hurt least.

And when we figure out what happened, if we ever do in our world of conflicting opinions,
the damage will have been done.

Tags: housing, Affordable Housing on Cape Cod, HAC, housing assistance corporation, MA Rental Voucher Program