Poorest families could lose housing

The change in federal funding of Section 8 Vouchers could cost Nashville an estimated $450,000 per year, and 100-150 families could lose benefits.

The 2004 U.S. Department of Housing and Urban Development (HUD) funding will be based on the 2003 voucher cost "with a 3/10th of a percent in inflation adjustment," Phil Ryan, director of the Metropolitan Development and Housing Agency (MDHA), said. "We'll have to use savings to make up this difference and when the savings are exhausted, then we'll simply not be able to help as many families. I mean it's real simple."

Rental costs are rising annually and housing experts fear HUD's inflation adjustment will not accurately reflect local market conditions. In addition, the inflation adjustments only try to reflect changes in rents, not in family incomes.

Voucher costs are determined by the difference between the rent and 30 percent of a family's adjusted income. So if incomes and rents in an area do not grow at the same rate, Section 8 Vouchers could cost more.

Ryan said preliminary MDHA estimates show that up to 100-150 families could be dropped from the program next year.

"Ultimately what this means, we'll serve fewer of Nashville's absolute poorest families," Ryan said. Nashville currently has 5,600 vouchers.

However, MDHA has managed its program so well that it will not lose additional funds like other cities when HUD announced a change in its reimbursement policies last month, Ryan said.

The U.S. Department of Housing and Urban Development announced April 22 that it would change its reimbursement procedures for voucher costs for the current fiscal year. Instead of reimbursing local public housing authorities such as MDHA for the actual voucher costs, HUD said it would only pay for the number of vouchers that local authorities had under lease on Aug. 1, 2003, with inflation adjustment.

Low-income housing advocates such as the National Multi Housing Council and the National Apartment Association criticized the change because they say the money would not be enough to support all existing voucher holders. The reason, the council believes, is that in the past local authorities haven't used all the vouchers allocated to them.

As a result, many local authorities have increased their utilization rates since last August. But under HUD's new reimbursement policy, they will not be paid for any of the additional vouchers they allocated since August.

"Fortunately for us by August