O.C. Section 8 Hike May Add Housing Units

Low-income residents of Orange County, San Diego and dozens of other U.S. communities will receive higher federal housing subsidies to help keep pace with skyrocketing housing costs, the federal government’s housing agency said Tuesday.

Officials at the U.S. Department of Housing and Urban Development said they hope the measure will make an additional 1.4 million apartments available to low-income families in areas where fast-rising prices are shutting them out of the rental market.

The increased subsidy is expected to add 25% more units to the so-called Section 8 Housing Choice voucher program, the largest of HUD’s three programs that assist low-income families with affordable housing.

Under the Section 8 program, renters with HUD vouchers pay no more than 30% of their income toward rent. The federal government pays the balance.

In Orange County, the tightest housing market in Southern California, the added subsidy would boost the number of Section 8 units from 16,000 to 20,600, a HUD spokesman said.

Los Angeles County, where high-rent areas already have benefited from higher rent subsidies, was not included in the first round of cities receiving additional federal assistance, but may still qualify based on a second set of criteria.

John Hambuch, a manager with Orange County’s Housing and Community Development Department, said the increase was “not as significant as we would have liked, but every bit helps. . . .At least now we know that low-income families on our waiting list have a realistic chance of using [the subsidy].”

The average rent in Orange County this year has hit a record high of about $1,100 a month. Average prices range from a high of more than $1,400 a month in Newport Beach to $770 a month in La Habra.

The Orange County “fair market rent”--the estimate of rental housing costs that HUD uses to determine subsidy levels--is currently $990. Under the new proposal, that value will rise to $1,046, which will allow families greater choices of where they can live and how much they spend on rent, Hambuch said.

The hike in subsidies came in response to the growing housing crisis among low-income families, whose rents in some markets have risen twice as fast as the pace of inflation, according to HUD statistics.

While Tuesday’s announcement increases these families’ chances to find units, landlords in a tight rental market may still not take the vouchers. Landlords have been pulling their housing out of the Section 8 program to get higher market rates in the booming economy, leaving renters with fewer places to get housing.

Hambuch said that 3,500 landlords in Orange County accept the vouchers. There are 7,200 families who receive Section 8 subsidies.

There are another 5,000 Orange County families on a waiting list. Each month, about 120 families are taken off the list and given vouchers, but of every 10, only six to seven find a landlord to take the vouchers.

“We’ve been finding out that one in three families is having to give their vouchers back after four months because they can’t find housing that falls under HUD’s guidelines,” Hambuch said.

Still, he said, the increased subsidy “will make a difference.”

Irvine City Councilman Larry Agran also hailed the increased funding, saying that in this difficult housing market, “any additional federal, state or local resources are welcome.”

HUD named 450 communities nationwide that qualified for the increased subsidies, based on the criteria that voucher holders in those communities are concentrated in a limited number of neighborhoods, and affordable housing is not widely available in those metropolitan areas.

Additional cities, including Los Angeles, may be added to the list after they provide data proving that more than a quarter of the families issued vouchers cannot find housing during a six-month period.

The Federal Home Loan Bank of San Francisco also announced Tuesday that it will purchase $102 million in mortgage bonds from the California Housing Finance Agency to boost affordable housing in the state.

“It’s ironic that the Southern California economy is doing so well and people are doing so well, that it has driven up prices and made housing less affordable,” said Alex Sachs, a Southern California HUD spokesman.