Lawmakers Urged to Keep Rental Program in Local Hands

City housing officials on Tuesday urged House lawmakers to reject President Bush’s proposal to give states control of a $12-billion federal voucher program that helps millions of families pay rent.

Currently, the Department of Housing and Urban Development distributes the Section 8 vouchers to 2,600 local housing authorities, which then pass the vouchers on to tenants.

HUD says that about $1 billion in voucher money is overpaid to tenants each year and that the program could be managed more efficiently if states assumed control.

However, housing officials from New York, Boston, St. Louis and some smaller cities said the proposal in President Bush’s 2004 budget would add a layer of unnecessary bureaucracy and tempt cash-strapped state governments to use the money for other things.

The proposal includes an additional $100 million in administrative costs to help fund the program’s transition to the states, money that could instead be used to help pay for vouchers for tens of thousands of people across the country on waiting lists, said Sandra Henriquez, executive director of the Boston Housing Authority.

“If the program’s not broke, please don’t break it,” Neil Molloy, executive director of the Housing Authority of St. Louis County, Mo., said at the hearing of the House Financial Services’ housing subcommittee.

The Section 8 program, started in 1976, helps mainly low-income families, although some exemptions are available for seniors and the disabled.

People must apply to the local housing agencies for vouchers that can be used for private rentals.

The Bush administration wants to turn the program over to the states rather than deal with thousands of local officials.

States, in turn, could work with the local agencies or contract with private companies to administer the vouchers.

The $1 billion in overpayments is mainly the result of local agencies confused over a mass of federal regulations governing who can and cannot qualify, HUD has said, adding that that confusion could be alleviated by giving states control of the program.

“The system that we have now is a real problem, the complexity is a real problem,” said Michael Liu, an assistant secretary of HUD.

“This would help more people in an efficient manner.”

Democrats, Republicans and nearly all housing officials and advocacy groups say the program, at the very least, needs fine-tuning, especially with housing prices skyrocketing.

A voucher, on average, costs about $540 a month.

But the Bush plan hasn’t had enthusiastic support in Congress. Even the subcommittee’s chairman, Rep. Robert W. Ney (R-Ohio), who introduced the plan in the House in April, said he did so at the administration’s request and hasn’t endorsed the bill.

“Maybe the patient doesn’t need open-heart surgery, but maybe some exploratory surgery,” Ney said at the hearing.

States would be better able to make sure all vouchers are used, said Barbara Thompson, executive director of the National Council of State Housing Agencies.

However, she added that her organization remains neutral about the proposal in part because of concerns over funding.