Sequestration Could Cut Housing Assistance For 185,000 People Next Year

CREDIT: Indiana Public Media

Somewhere between 125,000 and 185,000 people are likely to lose housing assistance by the end of next year if sequestration cuts remain in place, according to an analysis by the Center on Budget and Policy Priorities (CBPP).

The report also estimates that between 40,000 and 65,000 fewer people will be getting assistance by the end of this year compared to last thanks to the cuts. Housing Choice Vouchers give low-income people help in affording rent. The state and local agencies that administer vouchers have been reducing the number of families who receive them to cope with the cuts by no longer reissuing them when families leave the program and free them up. The reduction “primarily affects low-income seniors, people with disabilities, and working families with children who are currently on waiting lists for assistance,” the report notes. Most wait months or even years for vouchers. Only one in four eligible families gets any type of assistance.

When sequestration first went into effect in March, some programs felt the impact of the cuts gradually. But they hit rental assistance right away. As soon as it went into law, some people who had finally moved off of waiting lists actually had their vouchers rescinded. Since then, the housing authorities have frozen waiting lists, reduced the amount of rent each voucher will cover, and cut maintenance budgets for the public housing they oversee. These measures, as well as cutting the number of families who will get the vouchers, have been undertaken because “there are few alternatives that enable [agencies] to absorb budget cuts quickly,” the report says.

And things will get worse next year. The report notes that to cope with the 6 percent cut in 2013, the deepest on record, most housing agencies dipped into unspent funds from prior years. But those reserves are going to run for 40 percent of the agencies by the end of this year or the beginning of next. Congress also allowed the Department of Housing and Urban Development (HUD) to give agencies that were on the verge of cutting off assistance for some families up to $103 in voucher renewal funds. But CBPP estimates that it will have to give out most, if not all, of what it has left this year.

Services for the homeless, which many who can’t get vouchers turn to, are also suffering under sequestration’s ax. HUD has estimated that more than 100,000 homeless and formerly homeless people will be removed from these programs.

In order to undo the reductions in housing assistance, CBPP says Congress would need to give the program $17.7 billion next year for voucher renewals plus at least $1.69 billion just to administer the program. “While Congress could increase voucher funding in the final funding law for fiscal year 2014 even if it does not shrink the overall size of the sequestration budget cuts,” it notes, “canceling sequestration will probably be necessary to meet the goal of fully restoring the availability of housing vouchers to pre-sequestration levels.”

The cuts to vouchers are just one of the ways that sequestration’s cuts will snowball next year. Agencies will have to stomach another round of cuts, but many of the accounting tricks and emergency measures they used to blunt the impact this year will no longer be available. Congress could undo the cuts as part of the budget conference convened in the wake of the government shutdown. But Republicans may not be keen to do so. While they started out against the automatic cuts, they have since reversed that position and mostly decided to embrace them as a win.