On March 6, members of the Preservation Working Group (PWG) sent a letter to key housing appropriators expressing concern regarding HUD’s FY13 budget proposal for the Project-Based Section 8 program. In its FY13 request, HUD seeks a steep reduction in funding for project-based contracts and an increase to the minimum rents that project-based tenants must pay (see Memo, 2/17). The letter takes issue with both proposals. PWG is coordinated by the National Housing Trust and includes NLIHC.
The letter, to Senate and House Appropriations Subcommittees on Transportation, Housing and Urban Development and Related Agencies (THUD) Chairs Senator Patty Murray (D-WA) and Representative Tom Latham (R-IA), and Ranking Members Senator Susan Collins (R-ME) and Representative John Olver (D-MA), said the funding decrease, which will short fund 10,600 project-based contracts, “will result in a material change to existing contracts, driving up administrative and financing costs for property owners.”
“The proposal to short fund PBRA contracts does not reduce federal expenditures, creates real risks for residents and owners, and would discourage new investment in affordable rental housing in the future. The proposal will result in reduced rehabilitation and fewer preservation projects moving forward,” the letter, signed by PWG members, says.
Regarding the minimum rent proposal, which would increase minimum rents for project-based tenants from $25 to $75, the letter says, “While PWG supports cost-saving measures for HUD’s programs, this short-sighted approach will negatively impact the extremely low-income families that live in these apartments.”
The letter also comments on another cost-saving proposal in HUD’s FY13 request, reducing rental assistance payments by requiring owners to use project residual receipts. “This will divert funds owners otherwise use for property operations, preservation and rehabilitation projects and providing tenant services,” the letter says.
The letter is attached to this article.