U.S. Commission on Civil Rights

Equal Housing Opportunities in New York: An Evaluation of 
Section 8 Housing Programs in Buffalo, Rochester, and Syracuse 

Chapter 4 

Recent Changes to the Section 8 Program  

Alerted that recent changes to the Section 8 program could adversely affect fair housing opportunities for minorities, the Advisory Committee invited Susan Loritz, Section 8 program specialist with the U.S. Department of Housing and Urban Development (HUD) in Washington, D.C., to discuss recent changes. Ms. Loritz highlighted five major changes and four new program initiatives that relate to Section 8.

Changes to the Section 8 Program  

In October 1994, HUD implemented a revised Section 8 program rule that made five substantive changes to the Section 8 program. The changes include (1) an increase in the amount of security deposit required; (2) a reduction in the fair market rent limit; (3) an elimination of a take one, take all policy; (4) the elimination of the endless lease policy; and (5) termination of assistance for a tenant s serious lease violations.

The first of these changes was an increase in the amount of security deposit required of Section 8 recipients. In the certificate program, the security deposit had been limited to $50 or the total tenant payment (the percentage of the rent the tenet paid), which ever was greater. With this change, owners may now charge a market-rate security deposit, or whatever they typically charge for rentals.1

Before this change, housing agencies were getting tremendously bogged down in the administrative work of processing landlord damage claims and mediating disputes between tenants and landlords concerning responsibility for the damage and cost incurred. If tenants were not required to put down a large security deposit and had not much at stake, it was also thought they would be less careful about maintaining the unit. We hope that, in making these changes, the administrative work of housing agencies will be relieved somewhat, and families will assume greater responsibility for the care of the units, 2 Ms. Loritz said.

The second major change involves the reduction in the fair-market rent limit. Over the years, HUD had used the 45th-percentile standard, the rent level of 45 percent of the market standard rental units, as the fair market rent limit. That standard was meant to approximate the rent for a modest quality rental unit. It was decreased to the 40th percentile primarily as a cost-saving measure at the Federal level. Therefore, that particular program change makes it a little harder for assisted families to find units in the certificate program because they have to find a unit under their rent level, 3 Ms. Lortiz said.

A third change to the Section 8 program was eliminating some provisions that were not landlord friendly. One of the eliminated provisions was the take one, take all rule, where owners of multifamily housing projects could not refuse to lease to a person for the sole reason he or she was a certificate or voucher holder if they already had a Section 8 contract in their property. According to Ms. Loritz, the take one, take all provision had a very chilling effect on landlord participation in some places. Some owners were refusing to participate in the programs because they thought if they took one Section 8 tenant, they would have to take others. The goal of this change is to encourage more landlords to participate in Section 8 programs.

A fourth change in the Section 8 program, which also could be called landlord friendly, occurred in a provision often called an endless lease. The previous provision required that an owner could only terminate a tenancy for good cause and the simple expiration of a lease term was not good cause under the law. As is usually the case with non-Section 8 tenants, landlords of Section 8 tenants can sign a lease for a year, and at the end of the year, the tenant and landlord each decide to renew or not. Under the new program rules, the owner can terminate the tenancy without good cause at the end of the successive terms (1 year or month to month) of the lease.4  

A fifth change is a provision that allows housing agencies to terminate assisted tenancy for a tenant's serious violation of the lease. In the past, the lease agreement was between the landlord and the tenant, and the landlord could terminate the tenancy for serious lease violations. The family still remained eligible for assistance and could get another certificate to move elsewhere. If another landlord was willing to accept that same tenant, who may have caused serious lease violations at the previous unit, that was acceptable under the old program.5 Landlords objected to the fact that they were dealing with Section 8 tenants who trashed their units and then moved on to other rentals elsewhere. Therefore, the housing agency now has authority to terminate a tenancy for a serious lease violation, 6 Ms. Loritz said.

Ms. Loritz commented that, overall, these changes should not adversely affect Section 8 recipients. In reality, the changes should result in an increase in landlord participation in the Section 8 program. I don't think that any of these changes are really terribly dramatic changes, 7 she said.

Ms. Loritz was asked whether anything is being done in terms of instructions from HUD to local Section 8 administrators to say we've got this landlord friendly program now, why don't you market it to find more landlords in nonpoverty areas? 8 She responded:

Not withstanding what the Syracuse Authority said earlier. . . . I think that HUD guidance over the years and I've been working for HUD for 20 years now has always encouraged housing agencies to do outreach to landlords in all areas of their jurisdiction and has always encouraged housing agencies to tell families of the opportunities to lease in all areas of their jurisdiction. Throughout the 20-year life of the Section 8 programs, there has always been HUD direction to promote broad geographic opportunity in the program.9

New HUD Section 8 Initiatives  

HUD is undertaking four new initiatives in terms of mobility and regional opportunity counseling, and evaluation of its programs: (1) the Moving to Opportunity Program, (2) Mobility Counseling Centers, (3) the Multifamily Tenant Characteristic System (MTCS), and (4) the Section 8 Management Assessment Program (SEMAP).

The Moving to Opportunity Program was started by HUD in 1994. Five large metropolitan housing agencies, New York, Boston, Baltimore, Los Angeles, and Chicago, were selected to participate in this demonstration to help families who live in public housing or subsidized apartment buildings use Section 8 certificates or vouchers to move to low-poverty areas. These public housing or subsidized projects had to be located in high-poverty areas.

Families are randomly selected for the program. They must indicate an interest in the program, and understand that if they join the program, they will be given a certificate or voucher. There are three possibilities for the participants:

  1. They will be given a certificate or voucher and must move to a low-poverty census tract that is less than 10 percent poor.

  2. They will be given a certificate and counseling to help them move.

  3. They will be given a Section 8 certificate or voucher and routine treatment from the housing agency and stay in the same area.

This program tracks the selected families over a 10-year period to find out whether the move from the high-poverty condition to the low-poverty condition helps the families. HUD is undertaking a systematic evaluation to determine the advantages of mobility counseling and moving from high-poverty to low-poverty areas. The early results are that it has helped some people, but it is too early to tell definitively. 10

The second initiative is a regional opportunity counseling program. Sixteen housing agencies nationwide, including the city of Rochester, were selected to participate in a 5-year counseling initiative to promote metropolitan-wide housing opportunities. The goal of the program is to stop assisted families from being isolated in high-poverty census tracts with little economic and educational opportunity and to provide such families with additional counseling and assistance to help them move to low-poverty areas. HUD wants each of the 16 participating housing agencies to devise its own initiatives for metropolitan-wide housing opportunity counseling and to work with other housing agencies and nonprofit organizations within the same metropolitan area on housing opportunity counseling. Ms. Loritz said:  

We hope that, as a result of this demonstration, we will come up with a variety of ways that housing agencies can address providing metropolitan-wide opportunities for assisted families. . .and as a result of that, be able to pass on more information to housing agencies throughout the country.11

The third initiative is the Multifamily Tenant Characteristic System (MTCS). Under this initiative, HUD requires housing agencies to report family data on every family assisted in the program. Starting around 1995, HUD required that housing agencies submit a report on every family that submitted an application to the Section 8 program, which includes information such as family characteristics, their primary source of income, and where they live. Until this initiative HUD had not required reporting family data.

HUD has begun a geocoding system in which the ZIP code of a family is attached to the census tract where the family lives. HUD then assigns it with the poverty level of the census tract. With this new information HUD has begun mapping the location of Section 8 assisted families with poverty levels.12

Data from HUD s Office of Policy Development and Research show that nationwide 25 percent of Section 8 families live in metropolitan-area census tracts with less than 5 percent poverty, and 42 percent live in census tracts with less than 10 percent poverty.13 However, there are large differences among racial groups. For example, only 15 percent of blacks live in census tracts with less than 5 percent poverty, and 28 percent of blacks live in census tracts with less 10 percent poverty. For Hispanics, the corresponding figures are 28 percent and 40 percent. In contrast, 32 percent of whites live in census tracts with less than 5 percent poverty, and 53 percent of whites in census tracts with less than 10 percent poverty.14 That is, fewer minority Section 8 families live in low-poverty census tracts.

Within the next 2 years HUD field offices will have access to tabular data providing information by:

As a result, HUD will have access to information about where Section 8 families are living and how successful they are in moving out of high-poverty areas.

HUD s fourth new initiative, the Section 8 Management Assessment Program (SEMAP), is HUD's systematic way of assessing the performance of every housing agency administering Section 8 programs across the country.15 There are 15 indicators of performance in SEMAP. They address issues including that eligible families are selected properly from waiting lists, rents paid under the program are reasonable, and housing quality standards are enforced. One of the more important measurements is a deconcentration indicator. To measure deconcentration, HUD has devised a formula called the dividing property line to look at the distribution of affordable housing units for each metropolitan housing agency.16  

Each of the 15 indicators will be reviewed systematically each year for each housing agency. The more a housing agency encourages families to take advantage of metropolitan housing opportunities or opportunities to move out of high-poverty areas, the higher the points the agency could  earn on the SEMAP indicator.

The rating is meant to let HUD know what the status of the program is and where families under the program are living. If a housing agency is not performing on a indicator, then HUD would intervene to help improve performance on that indicator. But for the most part whether a housing agency scored high or low on the indicator will have no impact on the agency.17

Regarding incentives for doing well on the indicator, the incentive is improvement in living conditions in the local community. HUD is not prepared to provide large incentives for doing really well on SEMAP because there's not much HUD has to give in the way of incentives, 18 Ms. Loritz said.

Despite the fact that there would be few ramifications for a housing agency scoring low on the indicator, HUD is actively encouraging deconcentration. Ms. Loritz said:

Communities need to recognize that when poor people and minorities are isolated in inner-city neighborhoods where there are no opportunities that impact their local community, it impacts their life. It doesn't impact the Federal Government s life. The Federal Government provides funding to local housing authorities so that local housing authorities can make life good in their local communities. And the Federal Government would like life to be good in everybody s community, but the Federal Government doesn't make it that way. It's the local program administrators, the local elected officials, the local community activist. The local people themselves that make the community good. That provides local opportunity. The Federal Government doesn't do that.19

Ms. Loritz concluded:  

I don't think that we can talk about making drastic changes overnight. We can make inroads and that's what we're trying to do. And HUD is going to continue championing that. But, the fact that we live with segregation as we do in so many places says that nobody is doing a terribly good job of overcoming it right at the moment.20  

In an April 1998 update, Ms. Loritz informed the Advisory Committee that although the proposed SEMAP rule published for public comment on December 2, 1996, had not been finalized, a final rule was expected soon. She said that it appeared HUD would drop the dividing property line performance measure from the final rule. According to her, it was a response to the concern of HAs across the country that it would be unfair to penalize the HA for failing to reduce the number of families living in poverty concentrated areas.21

Endnotes 

1  Susan Loritz, statement before the New York Advisory Committee to the U.S. Commission on Civil Rights, factfinding meeting, Syracuse, NY, Nov. 20, 1996, transcript, p. 193 (hereafter cited as Syracuse Transcript).

2  Ibid., p. 194.

3  Ibid., p. 195.

4  Ibid., p. 196.

5  Ibid., p. 199.

6  Ibid., p. 232.

7  Ibid., p. 235.

8  Syracuse Transcript, p. 201.

9  Loritz statement, Syracuse Transcript, p. 202.

10  Ibid., p. 207.

11  Ibid., p. 209.

12  Ibid., p. 211.

13  Ibid., p. 212.

14  Ibid.

15  Ibid., p. 222.

16  HUD's formula involves for each metropolitan area examining the distribution of affordable housing units (housing units priced at or below the fair market rent limit, based on the 1990 census) in the area. HUD will examine how that affordable housing is distributed throughout the housing agencies jurisdiction and also throughout the entire metropolitan area. In addition to the distribution of affordable housing units, HUD will examine the distribution of Section 8 families and look to see that Section 8 families are as dispersed as the Section 8 affordable housing stock. HUD will then look at where all the units are throughout a metropolitan area and find out what poverty rate divides the affordable housing stock in half, so that half of the stock is in census tracts with poverty  rates that are higher than that and half of the housing stock is in census tracts with poverty  rates lower than that called the dividing poverty rate.  For example, the dividing poverty rate might be 22 percent. Half of the stock is available in tracts with higher rates and half in lower rates.  HUD will look to see that at least half of Section 8 tenants are in the relatively lower poverty tracts.

17  Loritz statement, Syracuse Transcript, pp. 224 26.

18  Ibid., p. 231.

19  Ibid., p. 229.

20  Ibid., p. 235.

21  Loritz letter to the Advisory Committee, Apr. 12, 1998.