Los Angeles city housing authorities have suspended acceptance of new applicants for the Section 8 voucher program, which subsidizes rent for tens of thousands of tenants in the city.
The federally funded local government said it had made the move because it didn’t expect Congress to provide enough cash to maintain its current business this year.
For now, housing authorities have only suspended new applications. Currently, those with Section 8 vouchers are not affected and rent subsidies will continue, but may ultimately be knocked off.
“We are trying to ensure we are doing everything possible to avoid that happening,” said Rurudes Castro Ramirez, chief executive of housing authorities.
Named after the Federal Housing Act section, Section 8 program is one of the most powerful tools in the US government to keep rental housing affordable and combat overcrowding and homelessness.
It is funded in federal dollars but is managed by local governments. In Los Angeles, approximately 60,000 families use Section 8 vouchers to pay rent. Generally on private property.
Tenants typically pay 30% of their income on rent, with federal grants supplementing the remaining payments to landlords.
As rents tend to rise every year, housing authorities need to ensure that their annual budget increases by a certain amount to maintain their current business.
However, federal funds are expected to expire on March 14th, with the Trump administration and Congressional Republicans looking to reduce the size of their government.
Carlos VanNutter, director of the LA Housing Authority’s Section 8 Program, said proposals from the House and Senate are expected to not be enough to keep up with obligations, leading to an annual shortfall, and are expected to range from $48 million to $144 million.
Housing authorities across the country face similar issues, but Los Angeles’ fundraising issues have gotten worse. Last year, under the Biden administration, the U.S. Housing and Urban Development Agency regained a $38 million reserve from authorities as it provided funding to local local communities at the time.
HUD did not immediately respond to requests for comment, but Van Natter said he estimated that his agency’s worst predictions coming out of Congress would have to cancel vouchers for the 6,000 households currently using them.
Van Nutter decided that his agency would work with federal agencies to suspend new applicants as a first step to minimizing the impact on both tenants and landlords and reducing the shortfall, but he had no estimates on how much the lawsuit would save.
There are 2,900 households in the middle of the Section 8 application process, with some currently not receiving vouchers, and some 400 households that apply to several other small programs for homeless individuals who have also suspended housing authorities.
Also, the additional 24,000 households on the waiting list in Section 8 cannot advance in the process.
Some voucher programs were not suspended, including specially intended for homeless veterans and special types of Section 8 vouchers that can only be used on certain properties.
People with traditional Section 8 vouchers who have yet to find a place to live are also not seen change and can continue to watch with their subsidies.
Castro Ramirez has called on Congress to provide more resources so that authorities can resume applications and endanger further reductions.
“The economic and human impact of these funding gaps cannot be overstated,” she said. “Los Angeles has seen an increase in housing instability, affecting thousands of families, property owners and the wider community.”
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