Economy

Budget Cuts To Deny Rent Assistance For 140,000 Low-Income Families

The automatic budget cuts caused by sequestration that began taking effect on March 1 could ultimately lead to the denial of rental assistance housing vouchers to as many as 140,000 low-income families, according to a study from the Center on Budget and Policy Priorities. Worse, the cuts come at a time when low-income housing programs are already struggling because of previous budget cuts.

Sequestration would cut $938 million from the Housing Choice Voucher program this year, leaving the program six percent short of the funds it needs to extend housing vouchers to the same number of families it served in 2012. Agencies are already “shelving” vouchers, according to CBPP, meaning they aren’t issuing new vouchers to families who are waiting. And they will continue to do so both because of cuts and over concerns about whether they will receive increased funding in the future, leading to a precipitous drop in the number of families served:

Most agencies will likely continue to shelve vouchers so long as their monthly housing assistance costs exceed their monthly renewal funding allocations from HUD, in light of the risk that the funding cuts could extend into 2014. As a result, we estimate that by early next year, agencies’ voucher programs are likely to shrink by approximately 140,000 households — primarily seniors, people with disabilities, and families with children.

Housing vouchers typically serve low-income families and senior citizens, and the cuts could also mean that agencies choose to raise rent prices in an effort to reduce costs. Reducing the payment standard, which defines the maximum amount covered by a voucher, by 10 percent would raise rent by $100 per month for the typical family, according to CBPP. The cuts will also hit homeless assistance programs and funds that help build low-income housing for seniors.

Sequestration’s impact is already being felt by low- and middle-income families, as children being kicked out of Head Start programs, government workers are facing furloughs, and many jobs in education and other fields aren’t being replaced. Rental and housing assistance is just the latest area where people will feel the impact of budget cuts the economy doesn’t need.