Resource Center

2009 Voucher Funding Issues

Some public housing agencies (PHAs) have experienced significant voucher funding problems in fiscal year 2009. These problems can be attributed to a number of reasons including:

• Congress underfunded voucher renewals by $250 million;
• the final FY 2009 appropriations was delayed from October 2008 to March 2009 and PHAs did not learn from HUD of their funding levels until May of 2009;
• some PHAs’ reserves were lower than what HUD had anticipated;
• families have lost jobs and income due to the current economic crisis;
• rents continue to increase thereby increasing the required subsidies;
• HUD data, on which it based the individual funding levels for some PHAs for FY 2009, was not accurate;
• vouchers are not turning over as rapidly as in prior years due to the current economic situation.

HUD is working with individual PHAs to address the current voucher problem. Suggested strategies include the use of program and administrative fee reserves, the use of non-voucher funds, and the adoption of policies to cut costs.

In 2004 and 2005, PHAs faced a voucher funding shortfall for different reasons than are forcing the current voucher shortfall. At that time, the Center on Budget and Policy Priorities and NHLP developed a chart setting forth options that PHAs could adopt to cut costs. The alternatives set out in that chart are still useful today.

2009 Voucher Funding Issues

Cases

Note:
In 2004-2005, some PHAs terminated or sought to terminate vouchers because of the funding shortfall that existed at that time. Litigation was then filed to protect voucher holders.

(Redacted) v. Woodbridge Housing Authority
Voucher tenants sued the Woodbridge Housing Authority because it terminated their leases due, in part, to overleasing, prior to a HUD analysis of the PHAs finances, in violation of the Section 8 Administrative Plan and in violation of due process.

(Redacted) v. Elgin Housing Authority
Voucher tenants, who were terminated from the voucher program, sued the Elgin Housing Authority for promissory estoppel, equitable estoppel, violation of due process and various statutory violations.

Materials

Possible Strategies to Respond to Funding Shortfall in 2005
This document was created in response to the funding shortfall in 2005, but the strategies set forth are applicable to the current funding problems.

Statutes, Regulations and Administrative References

PIH Notice 2005-9, Public Housing Agency (PHA) Flexibility to Manage the Housing Choice Voucher Program in 2005 (Feb. 25, 2005)
This Notice may be a reference on how to respond to funding shortfalls in 2009.

Links

HUD June 30, 2009 webcast on managing 2009 voucher funding.

PowerPoint that HUD distributed during its webcast

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