HUD
No. 04-013 Jane Goin, Public Affairs (303) 672-5440 |
For
Release Thursday February 12, 2004 |
REFORM TO SECTION 8 AIMS TO HELP FAMILIES ACHIEVE SELF-
SUFFICIENCY
Public Housing Authorities To Gain Local Control to Serve More Families In Montana
WASHINGTON - The sweeping reform of the nation's rental assistance
voucher program announced in HUD's 2005 proposed budget is designed
to help public housing authorities (PHAs) enable more low-income families
to transition
to self-sufficiency while reducing the number of families
on long waiting lists around the country.
"Today families must wait years to receive a voucher," said HUD Assistant Secretary Michael Liu. "Our reforms are intended to create innovative solutions for those Americans in need of housing assistance."
The new Flexible Voucher Program (FVP) will allow PHAs to assist
the 1.9 million families the Section 8 program currently assists
and potentially serve more families. Under FVP, PHAs will continue
to receive direct funding from
HUD to administer the program, but
with added flexibility and less "red tape" to encourage PHAs to
manage
effective programs.
FVP shifts the rental assistance program from a unit-based distribution
system to a dollar-based system to give
PHAs the freedom to adjust
their programs to address the changing needs of their communities
and better control increasing voucher costs. The average cost for
each voucher has increased at an alarming rate - 23% in the last
two years alone.
FVP will allow PHAs to set rents using local rental market data
rather than HUD's Fair Market Rent (FMR) data,
which is estimated,
imprecise and often lags behind market fluctuations. Giving PHAs
the authority and incentive to pay no more than true market rents
will allow PHAs to maximize their funding and serve more families.
Currently HUD gives PHAs a specific number of vouchers they distribute
to qualified families. This puts a cap on the number of families
a PHA can assist. With a dollar-based program, PHAs can use their
funding to design programs to serve
more families based on local
needs - as was done prior to shifting to a unit-based program in
1999.
In addition, the FVP will reward housing authorities that are good managers through performance-based incentives while holding PHAs accountable for poor performance.
Housing authorities that utilize existing self-sufficiency mechanisms,
such as the Voucher Homeownership Program,
or develop others to
promote higher levels of income and employment that will transition
families out of the program will be rewarded with additional fees
for administering the program. Transitioning families off of assistance
will not
only improve their lives, but will also help serve families
currently unassisted on long waiting lists in many
communities.
HUD is the nation's housing agency committed to increasing homeownership,
particularly among minorities, creating affordable housing opportunities
for low-income Americans, supporting the homeless, elderly, people
with disabilities and people living with AIDS. The Department also
promotes economic and community development as well as
enforces
the nation's fair housing laws. More information about HUD and its
programs is available on the Internet
and espanol.hud.gov.
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THE FLEXIBLE VOUCHER PROGRAM RENTAL ASSISTANCE REFORM FOR THE FUTURE
In
its fiscal year 2005 budget, HUD has proposed to Congress sweeping
reform of the Housing Choice Voucher Program, also known as Section
8 assistance. The Flexible Voucher Program (FVP) reforms are designed
to help
Public Housing Authorities (PHAs) transition more low-income
families through the program to self-sufficiency - reducing the
number of families on long waiting lists around the country.
HUD is proposing a new dollar-based grant program that will better manage costs, continue to serve at least 1.9 million families or more and provide the PHAs a more efficient and effective program.
HUD's
current system serves 1.9 million families. However, there are no
incentives for families to move off the
program to self-sufficiency.
FVP will serve at least 1.9 million families or more, and provides
incentives to PHAs
to help more families achieve self-sufficiency.
LOCAL FLEXIBILITY
- PHAs will receive direct funding from HUD to administer the grant.
- PHAs will receive a fixed grant amount, but will have more
flexibility in determining how best to spend their
money. - PHAs will have the authority to determine local fair market rents (FMR) immediately to adapt to local market changes. FMRs are currently set by HUD in Washington and often do not reflect accurate market conditions.
- HUD's Moving to Work program, a successful pilot program, has offered PHAs many of the same flexibilities proposed by FVP.
RESULTS
- HUD's
new FVP will continue to serve at least 1.9 million families,
the same number of families that are
currently being served. - FVP is designed to serve more people by encouraging self-sufficiency and HUD will monitor PHA results.
- HUD will give incentives to PHAs that help transition families out of the program on to self-sufficiency.
CONTROLLING COSTS
- Two-thirds of HUD's current budget goes towards rental assistance.
- The Section 8 program is unsustainable at current growth levels
- per voucher costs have increased
at alarming rates of 23% in the last two years. - The time for reform is now.
- PHA staffs will be relieved of the administrative burden of
the current system thereby allowing them
to focus on helping more residents achieve self-sufficiency.