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**Equal Housing Opportunities inNew York: An Evaluation of  Section 8 Housing Programs in Buffalo, Rochester, andSyracuse **

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**Chapter 4**  

**Recent Changes to the Section 8 Program**   

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

**Changes to the Section 8 Program  **

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

The first of thesechanges was an increase in the amount of security deposit required of Section 8recipients. 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-ratesecurity deposit, or whatever they typically charge for rentals.1

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

The second major changeinvolves the reduction in the fair-market rent limit. Over the years, HUD hadused the 45th-percentile standard, the rent level of 45 percent of the marketstandard rental units, as the fair market rent limit. That standard was meant toapproximate the rent for a modest quality rental unit. It was decreased to the40th percentile primarily as a cost-saving measure at the Federal level.�Therefore, that particular program change makes it a little harder forassisted families to find units in the certificate program because they have tofind a unit under their rent level,�3Ms. Lortiz said.

Athird change to the Section 8 program was eliminating some provisions that werenot landlord friendly. One of the eliminated provisions was the �take one,take all� rule, where owners of multifamily housing projects could not refuseto lease to a person for the sole reason he or she was a certificate or voucherholder if they already had a Section 8 contract in their property. According toMs. Loritz, the �take one, take all� provision had a very chilling effect onlandlord participation in some places. Some owners were refusing to participatein the programs because they thought if they took one Section 8 tenant, theywould have to take others. The goal of this change is to encourage morelandlords to participate in Section 8 programs.

Afourth change in the Section 8 program, which also could be called landlordfriendly, occurred in a provision often called an �endless lease.� Theprevious provision required that an owner could only terminate a tenancy forgood cause and the simple expiration of a lease term was not good cause underthe law. As is usually the case with non-Section 8 tenants, landlords of Section8 tenants can sign a lease for a year, and at the end of the year, the tenantand landlord each decide to renew or not. Under the new program rules, the ownercan 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 housingagencies to terminate assisted tenancy for a tenant�s serious violation of thelease. In the past, the lease agreement was between the landlord and the tenant,and the landlord could terminate the tenancy for serious lease violations. Thefamily still remained eligible for assistance and could get another certificateto move elsewhere. If another landlord was willing to accept that same tenant,who may have caused serious lease violations at the previous unit, that wasacceptable under the old program.5�Landlords objected to the fact that they were dealing with Section 8 tenantswho 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 leaseviolation,�6 Ms. Loritz said.

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

Ms.Loritz was asked whether anything is being done in terms of instructions fromHUD to local Section 8 administrators to �say we�ve got this landlordfriendly program now, why don�t you market it to find more landlords innonpoverty areas?�8 She responded:

> 
Not withstanding whatthe Syracuse Authority said earlier. . . . I think that HUD guidance over theyears�and I�ve been working for HUD for 20 years now�has always encouragedhousing agencies to do outreach to landlords in all areas of their jurisdictionand has always encouraged housing agencies to tell families of the opportunitiesto lease in all areas of their jurisdiction. �Throughout the 20-year life ofthe Section 8 programs, there has always been HUD direction to promote broadgeographic opportunity in the program.9

**New HUD Section 8 Initiatives  **

HUDis undertaking four new initiatives in terms of mobility and regionalopportunity counseling, and evaluation of its programs: (1) the Moving toOpportunity Program, (2) Mobility Counseling Centers, (3) the Multifamily TenantCharacteristic System (MTCS), and (4) the Section 8 Management AssessmentProgram (SEMAP).

TheMoving to Opportunity Program was started by HUD in 1994. Five largemetropolitan housing agencies, New York, Boston, Baltimore, Los Angeles, andChicago, were selected to participate in this demonstration to help families wholive in public housing or subsidized apartment buildings use Section 8certificates or vouchers to move to low-poverty areas. These public housing orsubsidized projects had to be located in high-poverty areas.

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

-  Theywill be given a certificate or voucher and must move to a low-poverty censustract that is less than 10 percent poor.Theywill be given a certificate and counseling to help them move.Theywill be given a Section 8 certificate or voucher and routine treatment from thehousing agency and stay in the same area.
Thisprogram tracks the selected families over a 10-year period to find out whetherthe move from the high-poverty condition to the low-poverty condition helps thefamilies. HUD is undertaking a systematic evaluation to determine the advantagesof mobility counseling and moving from high-poverty to low-poverty areas. Theearly results are that it has �helped some people, but it is too early to telldefinitively.�10

Thesecond initiative is a regional opportunity counseling program. Sixteen housingagencies nationwide, including the city of Rochester, were selected toparticipate in a 5-year counseling initiative to promote metropolitan-widehousing opportunities. The goal of the program is to stop assisted families frombeing isolated in high-poverty census tracts with little economic andeducational opportunity and to provide such families with additional counselingand assistance to help them move to low-poverty areas. HUD wants each of the 16 participating housing agencies to devise its owninitiatives for metropolitan-wide housing opportunity counseling and to workwith other housing agencies and nonprofit organizations within the samemetropolitan area on housing opportunity counseling. Ms. Loritz said:  

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

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

HUDhas begun a �geocoding� system in which the ZIP code of a family is attachedto the census tract where the family lives. HUD then assigns it with the povertylevel of the census tract. With this new information HUD has begun mapping thelocation of Section 8 assisted families with poverty levels.12

Data from HUD�sOffice of Policy Development and Research show that nationwide 25 percent ofSection 8 families live in metropolitan-area census tracts with less than 5percent poverty, and 42 percent live in census tracts with less than 10 percentpoverty.13However, there are large differences among racial groups. For example, only 15percent of blacks live in census tracts with less than 5 percent poverty, and 28percent of blacks live in census tracts with less 10 percent poverty. ForHispanics, 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, and53 percent of whites in census tracts with less than 10 percent poverty.14 That is, fewer minority Section 8 familieslive in low-poverty census tracts.

Withinthe next 2 years HUD field offices will have access to tabular data providinginformation by:
-  Housing agency.Census tracts.Section 8 families as a percentage of all renters in    the tract.Section 8 families as a percentage of all other    subsidized housing in the tract.Section 8 distribution by tracts, and how many    Section 8 families are in each census tract.
Asa result, HUD will have access to information about where Section 8 families areliving and how successful they are in moving out of high-poverty areas.

HUD�sfourth new initiative, the Section 8 Management Assessment Program (SEMAP), isHUD�s systematic way of assessing the performance of every housing agencyadministering Section 8 programs across the country.15There are 15 indicators of performance in SEMAP. They address issues includingthat eligible families are selected properly from waiting lists, rents paidunder the program are reasonable, and housing quality standards are enforced.One of the more important measurements is a deconcentration indicator. Tomeasure deconcentration, HUD has devised a formula called the �dividingproperty line� to look at the distribution of affordable housing units foreach metropolitan housing agency.16  

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

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

Regardingincentives for doing well on the indicator, the incentive is improvement inliving conditions in the local community. �HUD is not prepared to providelarge incentives for doing really well on SEMAP because there�s not much HUDhas to give in the way of incentives,�18Ms. Loritz said.

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

Communities need torecognize that when poor people and minorities are isolated in inner-cityneighborhoods where there are no opportunities that impact their localcommunity, it impacts their life. It doesn�t impact the Federal Government�slife. The Federal Government provides funding to local housing authorities sothat local housing authorities can make life good in their local communities.And the Federal Government would like life to be good in everybody�scommunity, but the Federal Government doesn�t make it that way. It�s thelocal program administrators, the local elected officials, the local communityactivist. The local people themselves that make the community good. Thatprovides local opportunity. The Federal Government doesn�t do that.19

Ms.Loritz concluded:  

I don�t think that wecan talk about making drastic changes overnight. We can make inroads andthat�s what we�re trying to do. And HUD is going to continue championingthat. But, the fact that we live with segregation as we do in so many placessays that nobody is doing a terribly good job of overcoming it right at themoment.20  

Inan April 1998 update, Ms. Loritz informed the Advisory Committee that althoughthe proposed SEMAP rule published for public comment on December 2, 1996, hadnot been finalized, a final rule was expected soon. She said that it appearedHUD would drop the �dividing property line� performance measure from thefinal rule. According to her, it was a response to the concern of HAs across thecountry that it would be unfair to penalize the HA for failing to reduce thenumber 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 thedistribution of affordable housing units (housing units priced at or below thefair market rent limit, based on the 1990 census) in the area. HUD will examinehow that affordable housing is distributed throughout the housing agencies�jurisdiction and also throughout the entire metropolitan area. In addition tothe distribution of affordable housing units, HUD will examine the distributionof Section 8 families and look to see that Section 8 families are as dispersedas the Section 8 affordable housing stock. HUD will then look at where all theunits are throughout a metropolitan area and find out what poverty rate dividesthe affordable housing stock in half, so that half of the stock is in censustracts with poverty  rates that are higher than that and half of thehousing stock is in census tracts with poverty  rates lower than thatcalled the dividing poverty rate.  For example, the dividing poverty ratemight be 22 percent. Half of the stock is available in tracts with higher ratesand half in lower rates.  HUD will look to see that at least half ofSection 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.