Sequester cuts into Section 8 funding

If the federal sequester remains in place, families in Section 8 housing in Howard County might have to begin paying more by mid-2014.

The Howard County Housing Commission has been informed by the U.S. Department of Housing and Urban Development (HUD) that it will immediately see a six percent cut in subsidy funding for the program, also known as Section 8, according to Tom Carbo, executive director of the Housing Commission.


Largely due to rising rental costs, Carbo said the commission already has closed its waiting list for housing vouchers, while ceasing to give out new vouchers once someone leaves the program.

"We've already shut off the spigot and now we're just trying to maintain," he said.

But the sequester figures to complicate funding for the voucher program. The housing commission currently has reserves to fully fund the program, but that funding will be depleted under the sequester within the next 14 to 15 months, according to Carbo.

He said the commission is looking at a variety of ways to save money, including decreasing voucher payments and pulling vouchers from particular tenants.

"Obviously that would be a last resort," he said of pulling vouchers. "We'd prefer not to do that."

The county is taking a look at how decreasing voucher payments could impact residents in the program.

An early estimate shows that 50 percent of voucher holders could see a $75 to $100 increase in their contribution, which for some "can be significant," Carbo said.

The average participant in the program receives about $1,100 a month in vouchers, which covers rent and utilities that exceed 30 percent of the family's gross income for a month, according to Carbo.

The housing voucher program is completely federal funded.

The county receives about $742,000 a month, or close to $9 million a year, in federal subsidies for the program that serve about 700 voucher holders. An additional 400 voucher holders live in Howard County, but their funding comes from the jurisdiction where they received their voucher.

The majority of residents in the voucher program live in Columbia, Carbo said.

There are over 5,000 applicants on the county's waiting list for the program, but the list has been closed to new applicants since July.

"All in all, at this point we're not serving anyone on the waiting list and with the sequester we won't be able to," Carbo said.

To be eligible for the housing voucher program, an applicant must provide evidence that their sources of income are 30 to 50 percent of the county's median income. Howard's median income is about $85,000.


For example, a four-person household at 30 percent would be making $25,000.

In addition to the six percent cut in the voucher program, the county also will see a 16 percent cut in the fee for administering the program. This will cause the commission to pull funds from other programs to pay for the voucher program.

Carbo said the commission has not identified any areas where funding may be pulled from to cover administering the vouchers.

"Any way you look at it, that's less revenue for direct assistance for housing programs," he said.

The county's Community Development Block Grant and HOME funds also will be cut by five percent due to the sequester. These funds partially fund non-profit organizations that serve the needs of low income, disabled and the homeless, such as the Grassroots Crisis Intervention Center in Columbia.

If the sequester is permanent, Carbo said the commission will have to use its best imagination and resources to find a solution.

"We'll cross our fingers and hope that Congress realizes the sequester hits lowest income families the hardest," he said.