Thursday, March 30, 2006

Housing Cuts for the Poor, Tax Cuts for the Rich

President Bush's 2007 budget that was released last month includes significant cuts in housing assistance. The new budget for the Housing Choice Voucher Program underfunds 70 percent of the state and municipal housing agencies that oversee the program, according to a study by the Center on Budget and Policy Priorities. Although the Republican Congress has debated the cuts affecting the Department of Housing and Urban Development (HUD), it appears unlikely that Mr. Bush's cuts will be opposed. Ironically, Congress is also considering yet another tax cut for the wealthy.

The voucher program is the country's largest low-income housing program. It provides poor households with vouchers they can use to rent housing in the private sector. Since 2004 voucher assistance for over 100,000 families have been cut because HUD doesn't allocate the vouchers based on current needs. Mr. Bush's 2007 budget relies on the same funding formula that has caused the shortages in the past few years.

Under the administration's formula, every housing agency's funding level is based on the dollar amount it was eligible to receive the previous year. The level is adjusted by an inflation factor determined by HUD based on data that is two-years old. But this formula doesn't consider the actual number of vouchers the agency distributed the previous year or changes in local voucher costs. As a result, many agencies are left with inadequate funds to continue all of the vouchers currently being used.

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