Sequestration Impacts Continue to Emerge

Deal to Resolve Crisis Remains Elusive

PHA Sequester ImpactCongress returned to Washington, DC after the Memorial Day recess with little hope of addressing the effects of sequestration on low-income people. Some Members of Congress have introduced sequestration reform, repeal, and replacement bills, but no bill has sufficient support to advance as stand-alone legislation.

Currently, there is little impetus for the House and Senate to negotiate a deal without an imminent policy issue to negotiate.

The lack of Congressional action on sequestration makes documenting the impact of sequestration all the more urgent. To that end, the Public Housing Authorities Directors Association (PHADA) surveyed its members and released the report of the findings on May 22. Three hundred agencies in 41 states, primarily agencies in rural communities and small cities, responded.

Regarding the Housing Choice Voucher program, agencies reported terminating households’ rent assistance, rescinding vouchers not yet leased up, and not issuing new vouchers. While only five agencies reported terminating households from the voucher program thus far, another 51 agencies reported that they will terminate households within the next six months. Forty-four agencies reported rescinding vouchers that were issued but not yet leased, and another 37 agencies responded that they will rescind vouchers within the next six months. One hundred twenty agencies reported that they have stopped issuing vouchers and 40 additional agencies reported planning to do so within the next six months.

In a question about the severity of cuts to the voucher program, 63% of respondents cited cuts to voucher funding as “somewhat or very damaging” and 72% of respondents cited cuts to administrative fees as “somewhat or very damaging.”

For nearly 150 agencies, these cuts will result in longer voucher waiting lists and over 75 agencies report that these cuts will results in higher rents for voucher holders. A similar number of respondents anticipate cuts resulting in the loss of vouchers. Nearly 50 agencies also report that these cuts will make them “less able to serve special populations,” such as veterans and people experiencing homelessness.

Respondents indicated equal challenges in managing cuts to the Public Housing program. Over 100 agencies reported an increase in maintenance work order backlogs with nearly another 100 agencies expecting an increase within the next six months. One hundred seventy-six agencies have already deferred capital improvements and another 86 agencies expect to within the next six months. Two hundred twenty five agencies have reduced spending on contracts, supplies, and equipment as well.

Respondents indicate that the severity of public housing cuts is significant, with 78% of respondents reporting cuts to the Public Housing Capital Fund are “somewhat or very damaging” and 74% of respondents indicating cuts to the Operating Fund are “somewhat or very damaging.”

Click here to read the PHADA report.