Federal budget cuts hit home


May 6, 2013

KINGSTON — The public housing sector has already been hit by flat-lined federal budgets and increased demand and costs to run its programs. Now with sequestration, housing authorities across the country face even deeper cuts.

For local housing authorities, including the Luzerne County Housing Authority, the financial strains have led to tough decisions, including not replacing staff members who leave, holding off on maintenance and repair projects and increasing the amounts program participants must pay.

“It’s been a nightmare,” said Luzerne County Housing Authority Executive Director David Fagula. He said tougher decisions will have to be madeas the new policies and realities take effect.

He said the authority has followed federal Housing and Urban Development recommendations to keep the budget as close to available funds as possible. That means:

• When someone receiving housing assistance is removed from the benefits list, none of the more than 900 people on the waiting list will move onto the recipients list.

• Moving from one jurisdiction to another and retaining housing assistance will not be allowed.

• Those receiving rent assistance who fail to comply with established debt repayment agreements will be removed from the list.

As budgets become even tighter, Fagula said, those receiving public rent assistance may lose that benefit through a lottery. Fagula said one decision made at the local level was that the elderly and the disabled would not be put into the lottery.

“It’s heartbreaking to see the people that come in here seeking assistance,” Fagula said.

Housing authorities across the country are absorbing the budget cuts, and Fagula said no one is immune.

The county authority has tried to offset the more than $1.5 million in budget scale-back by not doing roof or window replacements or repairs and opting not to have a summer worker program this year. Landscaping and other non-essential projects also are getting scaled back.

Rather than cutting people en masse to meet the budget, Fagula has been dipping into the authority’s reserves. But what was a $436,278 reserve fund at the start of the year is now less than half of that and at the current rate will be gone by Labor Day. Then more drastic decisions will have to be discussed.

“We’re going to balance things through attrition. If attrition slows later this year, we’ll have to see what else we can do,” said Jack Ziegler, the director of the Wilkes-Barre City Housing Authority.

As the county housing authority list has been cut by those dropping out or getting removed the money that had been divvied up among 1,115 recipients of rental assistance is now shared by just 1,032 recipients. By the end of the year that list will be down to 950 or fewer, Fagula said.

Also cut is the figure the authority is paying to landlords for the local fair-market rate for rental properties. The authority was paying 110 percent of the fair-market rate. Starting June 1 that rate will drop to 100 percent, meaning many receiving assistance will have to pay an additional $60 or so out of pocket monthly.

Fagula said it might not sound like much, but for the people who qualify for rental assistance, that extra $720 a year could be a month’s paycheck.

In recent years, Fagula said, the entire public housing industry “has been stuck in a death spiral,” and he doesn’t see that changing as the government remains in a constant state of political gridlock.

“I’ve been around long enough to see the pendulum swing both ways. The housing problem isn’t going away. If anything, we’ll have more homeless people, and hopefully the pendulum will swing back this way,” he said.

In a prepared statement, U.S. Rep. Matt Cartwright said: “Virtually every Housing Authority is looking at service reductions to vulnerable people. These are up to and including pulling housing-choice vouchers back, evicting people who are currently stably housed and reducing maintenance. Often these cuts are eliminating programs that are successful at helping people in the face of growing need. The effects of the sequestration on local Housing Authorities is just another reason why the sequester-level cuts in the continuing resolution must be repealed.”