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HUD Archives: News Releases

HUD No. 99-79
Further Information:For Release
In the Washington, DC area: 202/708-0685Thursday
Or contact your local HUD officeApril 29, 1999


WASHINGTON - In a move that drew bipartisan Congressional support, Housing and Urban Development Secretary Andrew Cuomo today announced actions to preserve affordable housing for thousands of poor families around the country.

Among those joining Cuomo for the Capitol Hill announcement were: Congressman James A. Leach (IA), Chairman of the Committee on Banking and Financial Services; Congressman John J. LaFalce (NY), Ranking Member of the Committee on Banking and Financial Services; Senator John F. Kerry (MA), Ranking Member of the Banking Subcommittee on Housing and Transportation; Congressman Barney Frank (MA), Ranking Member of the Banking Subcommittee on Housing and Community Opportunity; Congressman Alan Mollohan (WV), Ranking Member of the House Appropriations Subcommittee on VA, HUD and Independent Agencies; House Banking Committee Members Bruce F. Vento (MN) and Michael E. Capuano (MA); and House Appropriations Committee Member Nancy Pelosi (CA).

"This is an important reform that will help protect families who need and deserve decent housing, at a fair cost to the American taxpayer," Cuomo said.

Cuomo also released a report that documents the magnitude of the risk to the Project-Based Section 8 Rental Assistance Program and lays out a set of principles to guide a more permanent, comprehensive solution to the problem. Titled Opting In: Renewing America's Commitment to Affordable Housing, the report quantifies the number and locations of subsidized units that are threatened by impending contract expirations.

Cuomo's announcements cover a two-pronged strategy:

  • HUD will take immediate steps to adjust its rental assistance payments to landlords under the Project-Based Section 8 Program. The Department will adjust outdated payment levels set 20 years ago that are below current market rents with new levels that reflect today's market conditions. The adjustments will be targeted to well-maintained and well-managed apartments that provide good housing for low-income families, giving landlords an incentive for remaining in the Section 8 Program.

  • HUD will work with Congress to develop a long-term, comprehensive solution to preserve Section 8 properties. Key elements of the long-term solution proposed by HUD will include: 1) Adequate resources to preserve the best Section 8 properties. 2) Reforming Section 8 contract renewals to remove uncertainties about the future of subsidies for particular developments. 3) Ensuring greater resident protection through the availability of enhanced vouchers to enable more poor families to remain in their homes when landlords withdraw properties from the Section 8 Program.

The report released today points out that the Project-Based Section 8 Program now helps 1.4 million families around the nation afford good, safe housing. During the next five years, however, two-thirds of all Project-Based Section 8 contracts will expire, totaling almost 14,000 properties that contain 1 million subsidized housing units.

When contracts expire, both HUD and the owner can choose not to renew. The majority of properties remain in the program, but the latest data show that about 10 percent of owners "opt-out" and convert their developments into unsubsidized housing.

The report points out that 44 states have more than 50 percent of their Project-Based Section 8 units expiring in the next five years, and every state has more than 1,000 units expiring in the period.

The Section 8 Program includes two forms of subsidy: Tenant-Based and Project-Based. Both help low-income households rent privately owned housing units. Residents pay about 30 percent of their income for rent and HUD pays the rest.

The Tenant-Based Program provides vouchers that remain with the households that use them. Families can take the subsidies to new rental housing if they decide to move. The Project-Based Program, on the other hand, provides subsidies that are tied to specific rental housing units.

Content Archived: January 20, 2009

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