Sequestration was supposed to be a poison pill — $85 billion in automatic, across-the-board cuts in discretionary federal spending so unpalatable to both Democrats and Republicans that they would be forced to negotiate a “grand bargain” budget agreement. But that didn’t break the political deadlock, and the ax fell when the March 1 deadline passed, leading to deep cuts in military spending and layoffs or temporary furloughs for federal workers. We’re now nearly 6 weeks into sequestration, and they’re still arguing.
For politicians and pundits, and probably most who get their information from the mainstream media, sequestration means reduced military spending, cuts in healthcare, longer wait times at the airport, curtailed National Parks services, even the end of White House tours and the annual Easter egg hunt. Eeek! No more Blue Angels flyovers! But those cuts don’t affect the thousands of Americans living in subsidized housing or on the streets. When the federal government seized part of the funding of numerous important public programs, subsidized housing was one of them.
Sequestration will cut more than $2 billion in 2013 from housing assistance and community-development programs administered by the Department of Housing and Urban Development (HUD). Cuts in housing vouchers and homeless assistance will have the largest impact on low-income families, sequestration will also contribute to further losses of public housing, impede the development of affordable housing for low-income seniors and people with disabilities, cause more low-income children to be exposed to lead-based paint in older rental housing, and cut counseling services for families at risk of foreclosure.
The Housing Choice Voucher program helps 2.2 million low-income households rent housing at an affordable cost. These households have annual incomes of about $12,500 — well below the poverty line of about $18,000 for a family of three. About half of these households are headed by seniors or people with disabilities; most of the rest are families with children. Because of limited funds for the program, only one quarter of the eligible households receives a housing voucher or some other type of federal rental assistance. There are long waiting lists for assistance in nearly every part of the country.
Housing vouchers are essential for preventing homelessness, and for helping families in emergency shelters or other temporary housing move into more permanent stable housing. Often communities prioritize homeless individuals and families for receipt of these vouchers. But many housing agencies now are “shelving” vouchers — not reissuing vouchers to families on the waiting list when other families leave the program. As agencies shelve vouchers because of sequestration’s cuts, the number of vouchers available to families that are homeless or at imminent risk of homelessness will shrink dramatically. This lengthens the amount of time that families remain homeless and causes other homeless families to be turned away from emergency shelters because they are full. Some agencies also are withdrawing vouchers from families that have recently received them but are still searching for a suitable apartment, and thus have not yet begun to use them. (Agencies can shelve or withdraw vouchers without notice to, or permission from, HUD.)
In San Francisco, Bay Area housing subsidies suffer from sequestration. The Santa Clara County Housing Authority, for instance, has lost $21 million in funding and desperately is searching for ways to avoid the worst-case scenario — pulling vouchers from some of the 17,000 households it serves. That would be devastating with the sky-high cost of Bay Area rental housing.
In Los Angeles, HACLA, the city’s housing authority, is poised to notify 24,000 of its 45,000 voucher holders next week that they may have to pay $100-$200 more toward their rent each month. The increase — which is more than 5 percent — will not kick in for everyone at once. Voucher holders will be hit with the new rates when they recertify their eligibility for the program.
The Bowles-Simpson commission and some other major bipartisan groups that have examined the nation’s long-term fiscal challenges have espoused the principle that deficit-reduction efforts should not increase poverty or exacerbate hardship for vulnerable Americans. This year’s sequestration violates this principle, forcing deep and indiscriminate cuts in non-defense discretionary programs. Approximately one-quarter of non-defense discretionary funding supports programs targeted on low-income families and individuals, including housing assistance. Under the tight spending caps established by the Budget Control Act, non-defense discretionary funding will fall by roughly $900 billion from 2012 to 2021 (relative to its 2010 levels, adjusted for inflation), reaching its lowest level on record as a share of GDP.
Sequestration deepens these cuts. If Congress fails to reverse them, low-income families will experience a significant loss of rental assistance. More individuals and families will likely experience lengthy periods of housing instability and homelessness, compromising their children’s chances to develop into healthy and productive adults. Congress should reverse sequestration for 2013 and future years and pursue alternative deficit reduction measures that, among other things, will protect low-income individuals and families. But don’t hold your breath waiting for that to happen.