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Hurricane Evacuees May Be Housed at Other Low-Income Families' Expense

September 28, 2005-Of more than 300,000 housing units destroyed by Hurricane Katrina in Louisiana, Mississippi and Alabama, the National Low Income Housing Coalition (NLIHC) estimates that 71 percent were occupied by people earning 80 percent or less of median income for their area-many of them with mental or physical disabilities. Now Hurricane Rita has added thousands more Gulf residents to the number left without an affordable place to live.

The good news --though only for the moment-- is that legislative actions that would continue to deplete affordable housing resources have been postponed and Congress is set to approve creation of an Affordable Housing Trust. But the Administration had begun sidelining the Department of Housing and Urban Development (HUD), the only federal agency with a focus on the housing and community development rights and needs of low-income people, and may persist in proposing to rob Peter to pay Paul --diverting scarce low-income housing resources address evacuees' needs. This is shortsighted and unfortunate. You can take action to oppose it.

HUD to Assist Displaced Households

On September 23, HUD announced a new program that will serve all displaced households who were receiving HUD assistance prior to the hurricane disaster. The agency has not issued an official number of HUD-assisted units that have been damaged or destroyed, but one estimate of the total is 47,000.

Evacuees who have registered with FEMA should contact the local housing authority in the community where they currently are or call 1-800-955-2232. Participants will receive vouchers that can be redeemed for housing units that cost up to fair market rent in that community. They can receive the subsidy for three months and perhaps more, up to 18 months. There are no income-targeting requirements and no tenant contributions for rent.

The National Low Income Housing Coalition's newsletters and alerts offer reliable and current information about Congress'and the Administration's response to the hurricanes. August 22 Action Alert, Action Needed to Stem Loss of Housing Housing the Displaced Is Rife with Delays, Washington Post article by Spencer Hsu and Ceci Connolly, 9/23/05 The Republican Study Committee's Budget Options 2005: Operation Offset

Inconsistent Messages about Funds for Emergency Housing

HUD first announced that the funds will come from the supplemental FEMA funds for disaster relief, not from existing HUD programs. This meant that communities now hosting displaced people should not have to divert their housing assistance away from the people on local waiting lists. Unfortunately, however, HUD officials then sent Congress a proposal to spend the remaining federal housing budget to address hurricane victims’ housing needs, contradicting their earlier announcement.

The agency had already infuriated low-income housing advocates by bumping hurricane victims up waiting lists for scarce Section 8 assistance, as described below.

Section 8 Cuts Postponed, Temporary Aid Urged

Among the legislation postponed is action on proposals to reduce funding for the Section 8 Housing Choice Rental Voucher program and to redirect many of that program's dollars away from low- and very low-income families to moderate-income households (see August 22 Action Alert. But the Administration believes this proposal is necessary and will reintroduce it in October.

Before Katrina, the Senate had proposed, but had not  yet finalized, legislation that would have defunded 11,900 vouchers, from the Section 8 program.  The House had completed its work on housing legislation, including elimination of 27,900 Section 8 rental vouchers.  The Senate has now proposed that $3.5 billion be provided to Katrina victims as temporary rental assistance - up to $10,000 each for 350,000 families for six to 12 months.  A Senate/House conference committee will determine if the House will accept the  proposal. A House proposal for 50,000 vouchers is awaiting a response from the Administration-not expected until October.

Affordable Housing Trust Proposed

In another important post-Katrina shift, key House and Senate Republicans are now supporting creation of an Affordable Housing Trust.  They want the Trust to give priority during its first two years of operation to affordable-housing projects in the disaster areas and other areas where evacuees moved. Other limits and sunsetting provisions that Republican Senators have added to the bill may result in its passage as early as this week.  Despite its constraints, the Affordable Housing Trust could be a very important addition to the supply of housing funds for low- and very low-income families.

$50 Billion Sought for Housing Relief

The Congressional delegations from the Katrina states have introduced the Hurricane Katrina Disaster Relief and Economic Recovery Act of 2005.  In the area of housing, the bill would recommend adding $50 billion to the Community Development Block Grant Act.  (The Administration zero-budgeted the CDBG Act last Spring.)  The bill would require use of the CDBG funds for "what state and local authorities need most -- roads, schools and housing."  The bill would also create an emergency voucher program that would waive income requirements, tenant rental contribution and requirements for a one-year lease and pre-occupancy inspection.  

HUD Addresses Evacuees' Needs, Displacing Families on Waiting Lists

Addressing displaced families' immediate housing needs, HUD has issued guidance that encourages public housing agencies to house these families ahead of others on the agency's waiting list and to award rental vouchers to displaced families who were eligible but hadn't received a voucher before the storm, regardless of their position on the voucher waiting list.

HUD has also advised housing agencies with more than 250 units that they may lease vacant public housing units to displaced families regardless of their income, may approve rental units before inspecting them, may use capital funds to help displaced families with security deposits, and may approve leases of less than a year, "if it will improve the housing opportunities for the family."

This guidance is causing outcries and confusion across the country.  Before Katrina struck, housing agencies overseeing Section 8 rental vouchers nationwide had already run out of cash. Almost all of the 3,200 housing agencies saw their operating costs reduced by at least 10 percent in 2003, with no additional funds since then. As the Richmond, Virginia housing director said, "We have nothing to give. They're saying, 'Take your allocation and give it to these folks.'  I don't get that.  Enhance the allocation, why don't you?"

For example, the Red Cross has moved 8,500 Katrina evacuees to Tampa, Florida, where the housing authority housed 8,500 families before the evacuees appeared and has a waiting list of several years for Section 8 vouchers.

President Proposes Homesteading Lottery, Sidelines HUD

 For the first time, President Bush has acknowledged that poverty "has roots in a history of racial discrimination." He did not say whether that acknowledgement affected the Administration's response to Hurricane Katrina or housing proposals. 

The President promised that all emergency shelters would be emptied by mid-October, and that the government would satisfy the emergency need for housing through an Urban Homesteading Act and a lottery for displaced families. Winners would get surplus federal property and the opportunity to build their own houses.

In discussing the recovery efforts, the President did not include HUD in his list of agencies responsible for rehabilitating the Gulf Coast states and securing housing for families displaced by the storm.  The Administration's message continues to be that it has no confidence in HUD's housing and community development programs, despite HUD's role as the only federal agency focused on the housing needs of low-income people.

The National Low Income Housing Coalition proposes a very different approach.  It recommends that the President establish a central federal housing entity to coordinate the housing functions of HUD, the Rural Housing Service (RHS), the Federal Emergency Management Agency (FEMA) and the Internal Revenue Service (IRS).  This new entity would direct the housing and rebuilding needs  both in disaster areas and in areas where people have relocated. 

On September 21st, the Republican Study Committee published its recommendations for funding disaster relief and saving close to $1 billion over 10 years. The document includes no mention of increased housing funds of any type, including Section 8. Instead, the list would end federal support for the Legal Services Corporation, the Corporation for Public Broadcasting, the National Endowment for the Humanities and other programs, and cut funding to community health and mental health centers and increase co-payments for Medicaid and Medicare, teen pregnancy and AIDS programs.

What You Can Do

• Call, write or email members of the Senate Banking, Housing and Urban Affairs Committee and the House Budget Committee and urge them to enact an Affordable Housing Trust bill that addresses the needs of low-income individuals and their communities. 
• Urge Congress to keep HUD to its word. Only supplemental funds that Congress has made available for hurricane relief must be used to house hurricane victims. HUD must not be permitted to steal housing agency, Section 8 and other housing funds from low-income renters whose housing was not affected by the hurricanes.
• Urge your Senators and Representative to approve $3.5 billion in new funds for emergency housing vouchers, housing production and rehabilitation and housing search assistance. and to approve an additional $3.5 billion for emergency capital funds both to rebuild in the affected areas and to add housing stock to the communities that are receiving relocatees.          

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