Housing Agency Cuts Off Subsidies

A federal program that has helped house generations of low-income families has stopped assisting new participants in Los Angeles, leaving more than 1,500 families holding now-useless housing vouchers and throwing into turmoil the plans of thousands of others.

Citing a lack of funds, the Housing Authority of Los Angeles canceled indefinitely assistance to people who had been given vouchers for the federal Section 8 program but who had not yet signed rental contracts. The move does not affect those participants already in housing.

The federal program, administered by the Department of Housing and Urban Development, subsidizes the rents of about 44,000 low-income households in Los Angeles. Participants often wait years for vouchers that allow them to rent wherever the subsidy is accepted. About 84,000 applicants are on the Section 8 waiting list in Los Angeles.

For the first time, however, housing officials last week began denying assistance to 1,500 voucher holders, even those on the verge of receiving keys to new apartments.

On Tuesday, Treshonda Williams, a full-time student who works part time and has a 3-year-old daughter, had expected to sign a rental agreement. Instead she learned the program had no funds for her voucher.

“I went to class this morning and just left; I can’t even think because I don’t know where I’m going to live,” said Williams, who has been staying in a homeless shelter but must move because of time limits. “I don’t know what’s going to happen.”

The suspension has caused fear, frustration and confusion among voucher-holders who had seen acceptance in the program as a guarantee of housing assistance.

The move also comes as a blow to about 80 local nonprofits that assist the homeless, veterans and the disabled. Those agencies are allotted a set number of vouchers each year that can then be offered to those in need.

Section 8 participants contribute about 30% of their income to meet the monthly rent; the program covers the rest. Tenants are allowed to remain in the program as long as they need assistance and meet income requirements.

“I’m receiving phone calls from all over the place, from every agency you can name regarding what to do,” said Renae Garrett, homeless director for On Your Feet, a nonprofit rental assistance and eviction prevention organization in Sherman Oaks. “This is a tragedy.”

The suspension affects about 100 families at the agency, clients who live on the streets or in motels with their children. “They’re saying ‘No Child Left Behind’?” Garrett said, referring to President Bush’s education initiative. “Now they’re being left in the streets.”

Officials at L.A.’s Housing Authority say they were forced to order the suspensions because they do not have funds to cover existing vouchers.

“We didn’t want to cancel existing vouchers, but at this point our projections indicate that we don’t have the funding to support additional Section 8” rental contracts, said Steve Renahan, director of Section 8 for the authority. “This is a step we did not want to take.”

Local officials blame the suspensions on a changing housing market and a clash between a new mandate from Congress and a long-standing practice by Los Angeles officials who administered the program.

Much like the airlines’ practice of overbooking flights, the housing authority each year issues more vouchers than can be accommodated by the program. The purpose of issuing more vouchers is to ensure that no voucher goes unused.

In the past, if the vouchers used could not be covered by the HUD allotment, local officials could tap into reserves or next year’s allocation of vouchers to cover the costs, Renahan said.

This year, however, Congress took away the ability to use reserves and has not allocated additional vouchers, Renahan said.

Local factors also have contributed to the problem, he said. Section 8 participants are more successful in using the vouchers than in the past. The Los Angeles County Housing Authority is 100% leased, preventing the program from paying for some city-issued vouchers, as it has done in the past. However, county housing officials say they are not responsible for the city’s problem.

Before suspending the vouchers, the city’s housing agency appealed to the federal government for help but has received no relief, Renahan said.

Larry Bush, a HUD spokesman, said the city knew the rules and, like other agencies, had been warned not to over-lease.

“We are working with them to do what we can, but most housing authorities have handled this challenge, including New York City, Chicago, Cleveland and places in Northern California, like Alameda,” Bush said.

Although the law prohibits authorities from using certain types of reserves, L.A. officials might be able to use reserves that predate the new law.

“We believe there are millions of dollars in both accounts,” he said.

Other housing authorities such as those in Santa Clara County and Boston have also experienced difficulties, said Denise Muha, executive director of the National Leased Housing Assn., a trade organization that represents housing agencies and landlords.

“If HUD doesn’t provide [Santa Clara] with additional funding, they could be displacing 1,200 families,” Muha said. “They are people in housing with vouchers.”

Muha said Congress had restricted the ability of housing authorities and HUD to respond to changes in a housing market.

For the affected Section 8 families, the loss of long-awaited housing assistance has led to other complications.

Tonya Blades-Barrett, 37, had scheduled knee surgery expecting that she would have her own apartment in time to recover. But Blades-Barrett, who worked as a receptionist for 13 years at Kaiser-Permanente until health problems forced her to leave, had to cancel the procedure.

Blades-Barrett, who lives in a Woodland Hills motel with her two school-age daughters, had expected to receive a voucher through On Your Feet, but now has little hope of getting an apartment.

“All those years I worked I never knew people were going through things like this,” Blades-Barrett said. “This is unbelievable. It’s unreal.”

Williams, who had been on the verge of signing a rental agreement, also wonders where to turn. She received a voucher after living at a homeless shelter in South Los Angeles for six months, abiding by the rules, paying rent and taking classes at the shelter -- all while working and attending school.

Then Williams learned the voucher had been suspended. She has been offered no alternatives, she said, and no referrals.