After six years, she finally got Section 8 housing — and then lost it

How would you feel if you finally got something that you’d waited six years for only to have it suddenly yanked away?

“Totally discouraged and really depressed,” says Corinne Lewis. “Really depressed.”

The 59-year-old grandmother who lives with her daughter and granddaughter was elated when she learned in February that after sitting on a waiting list since July 2006, they would be eligible for a Section 8 housing choice voucher. It pays a rental supplement that allows very low-income families to afford market-rate housing. “We started shopping for a place,” she says.

But a month later, she received a letter from the Metropolitan Council’s Housing and Redevelopment Authority announcing that due to budget cuts — the sequester and other strictures imposed by Congress because of its inability to reach a balanced budget deal — her family was back on the waiting list.

So now they are stuck in a two-bedroom apartment Lewis calls “substandard.” While they have heat and light, a broken window is taped, the fridge has busted shelves, the tub is leaking and some kitchen cabinet drawers are missing. The landlord has promised to fix it all up but hasn’t made any improvements since they moved into the place last September.  

And by the way, it’s a place that they can’t really afford. At $945 a month, the rent eats up 55 percent of the $1,700 monthly income she and her daughter receive from Social Security. (Both are disabled; Corinne has nerve-damaged hands that leave her unable to find the kind of computer job she worked in previously, and her daughter has bipolar disease.)

If the voucher hadn’t been withdrawn, Lewis would have paid about $570 a month, about a third of her income (what the government deems to be a reasonable share for rent), and the U.S. Department of Housing and Urban Development (HUD) would have paid $1,305. The total would have been enough, Lewis believes, for a place with three bedrooms and left the family with $400 more a month to spend. “Right now, we’re barely making it from day to day,” she says.

Shift in strategy

The federal public housing program began in the Depression, creating hundreds of thousands of government built and owned units to get poor people out of unsafe, substandard housing. In the 1970s, however, the government shifted its strategy. By then, most of the substandard housing had been urban renewed out of existence, but the poor couldn’t afford the rental housing that was available. An increasing number of people were simply homeless.

Enter the Section 8 voucher program, which subsidizes rents. It allows participants to shop for apartments on their own — and relieves the government of the cost of building and maintaining public housing. The two programs exist side-by-side. (Just to confuse you, there’s also affordable housing, which is built with federal tax credits and limits rents.)

New public housing hasn’t been built for some time. And the Section 8 program has been steadily cut for the last five years. So low-income families have been less able to find affordable housing.

“Out of Reach,” a report out this week from the National Low Income Housing Coalition, claims that their difficulties are worsening: “Finding a decent affordable apartment is a challenge for all renters, but the poorest households are the most likely to be locked out of the market entirely. For every 100 extremely low-income renter households [those whose incomes are less than 30 percent of the area’s median], there are just 30 affordable and available units.”

While rents in the Twin Cities metro are nowhere near the highest (that distinction goes to New York, Honolulu and San Francisco), it is “seen as unaffordable because we have such a low vacancy rate,” says Beth Reetz, director of housing and livable communities for the Metropolitan Council.

According to “Out of Reach,” a family in the seven-county area would have to earn $17.69 an hour to afford a fair market rent for a two-bedroom apartment. (Fair market rent or FMR is a kind of technical median the government invented — the 40th percentile of gross rents for typical, non-substandard rental units.) With a minimum wage of $7.25 an hour, a family would have to work 2.4 full-time jobs to be able to pay that FMR.


Source: National Low Income Housing CoalitionIn Minnesota, the Fair Market Rent (FMR) for a two-bedroom apartment is $836. In order to afford this level of rent and utilities — without paying more than 30% of income on housing — a household must earn $2,786 monthly or $33,438 annually.

Long waiting lists

Budget stringency plus lots of people in need equals long waiting lists for housing assistance. The Metropolitan Housing and Redevelopment Authority, which runs voucher programs in Anoka, Carver and parts of Ramsey and Hennepin counties, has 1,500 families waiting for Section 8 vouchers and hasn’t accepted new applicants since 2007. St. Paul has 2,000 families on its voucher list, which is also closed. Minneapolis last opened its list in 2008; 10,000 families are on it.   

That was the situation before the sequester. Now both public housing and the Section 8 program are experiencing a bigger squeeze. Public housing now will only receive 82 cents on the dollar, down from about 97 cents last year. In other words, if it costs a local housing authority $100,000 to operate a program, the federal government will provide only $82,000.

“We are not going to remove housing assistance from anybody who already has it,” says Jon Gutzmann, executive director of the St. Paul Housing Authority, which operates the city’s public housing programs. And he doesn’t plan on reducing service. Instead he has eliminated nine positions and will borrow from reserves to make up the shortfall. The waiting list for public housing is always open, but 7,000 households are on it.

“The wait is only six months to a year if you need a one-bedroom apartment in a hi-rise,” he says. For larger apartments, say three bedrooms, families can sit on the list for three to five years.

The Section 8 voucher program is another story. Rent subsidies have been reduced by about 6 percent, and the fees housing authorities receive to administer the program will this year pay for only 69 percent of operations. Again, Gutzmann plans to dip into reserves, but he says that, obviously, he can’t do that forever.

Reserves will eventually run out. So he has to shrink the program. Previously, when people left, he would issue new vouchers to those on the waiting list — about 20 a month. Now he will have to hold back until there’s been enough attrition in the program to bring it down to an affordable level.

Deep cuts

The news is pretty much the same all over. Cora McCorvey, executive director of the Minneapolis Public Housing Authority, declared: “These are the deepest cuts that have ever been made in the Section 8 program,” and she warns that they could lower the number of families who can participate. The Met Council has already decided to borrow from reserves for now but shrink its voucher program to 5,700 families from 6,200. Instead of languishing on the waiting list for five to seven years, families will have to wait six to eight years.

And that’s where Corinne Lewis is — back on the waiting list. She’s hoping, she says, that maybe she’ll make it into the program next year. In the meantime, she’s looking for an apartment where the landlord will eventually accept a Section 8 renter when she does qualify.

But she may have a longer wait than she anticipates. President Obama’s budget proposal funds the program at only 86 percent, and that’s likely to be a ceiling, since he will have to negotiate with Congress and likely accept a lower funding level.

A friend of mine, Joseph Shuldiner, who was former assistant secretary for public and Indian housing for HUD in the Clinton administration, operates a housing authority for Yonkers, N.Y., a city of about 200,000. Like his Twin Cities counterparts, he says, he’s trying to hold down the fort, to do everything to he can to keep those already receiving housing assistance from suffering. So he plans to dip into reserves, pare back his staff and downsize programs.

But, he wonders whether it wouldn’t have been smarter to turn people out on the streets. “Maybe if more people were homeless, Congress would sit up and take notice,” he says.

This Congress? Probably not.

Comments (15)

  1. Submitted by Jeff Klein on 04/15/2013 - 09:30 am.

    These renters need more information

    It might go a long way just to help people search for apartments more effectively. It’s pretty shocking that you can pay $945 for an apartment in Minneapolis with broken windows. Why? Because that’s exactly what we pay for an entirely respectable two-bedroom place in the Powderhorn neighborhood. A few minutes on Criagslist or Padmapper will turn up dozens of reasonable two-bedroom apartments in the $1000 range. With the voucher the total comes to $1885 which is enough to rent a fairly palacial three-bedroom house. Not to say that this sort of assistance isn’t necessary – I support it very much – but it seems like these slumlords are preying on low-information renters more than it’s impossible to get a decent place for the money she is paying.

  2. Submitted by Chris Williams on 04/15/2013 - 10:02 am.

    Look Elsewhere

    Agreed with the above poster. I’m paying $880 for a 2BR apt with in-unit washer and dryer, dishwasher, new appliances, heated undeground garage parking, and all utilities (except internet) paid for by the apartment complex. This is out in the western suburbs. I mean, I know it can be hard to come up with a down payment for some lower income people and that forces them to stay put, but the rent quoted in this article is outrageous. They need to check out craig’s list and find a better place.

  3. Submitted by Hillary Drake on 04/15/2013 - 11:20 am.

    Chris, the rent quoted in the article is pretty similar to what I saw when I was looking in the Roseville area last year, and prices have gone up since then. Landlords in Minneapolis and St. Paul have put through 10%+ increases in the last year to cover property tax increases.

    Information would help but there are probably more barriers to a reasonably priced apartment. Rental vacancies are low (rent increases were one of the factors in my choice to buy a condo last year), and landlords are in a position to be choosy about their tenants. If you’ve had an eviction, you’re out of luck at most of the corporate buildings. There also seems to be a premium for places close to multiple bus lines.

    Regarding craigslist, about 75% of the listings I saw there were at least partially deceptive. A big complex would advertise a $775 two bedroom, but not say that 95% of their two bedrooms were $900+.

    • Submitted by Jeff Klein on 04/15/2013 - 03:17 pm.

      No, these rents are weird.

      I’ve been in the process of apartment-hunting recently so I know very well what the rents are. First of all, even if “95% of their two bedrooms were $900+”, what’s the problem? She is paying $945 for a place with a broken window. I don’t think I could find such a bad deal if I tried to. And $1875 for three bedrooms? It’s difficult to spend that much! An entire small house is about $1500 almost anywhere in town. I’m sorry but while I agree that rent assistance programs are needed, there is absolutely something fishy going on here with these prices.

      • Submitted by Rachel Kahler on 04/15/2013 - 04:56 pm.

        Other factors

        The last time I looked at rents was bout 2 years ago, so my knowledge is out of date. That being said, the availability of good places near public transportation or retail was poor and what was available was expensive. Of course, that may no longer be the case, but I’ve heard that it’s still a pretty tight market.

        Still, it’s also possible that it’s a combination of low information and/or low mobility. I don’t doubt that there are slum lords taking advantage of peoples’ lack of knowledge, and they most certainly are taking advantage of low mobility.

    • Submitted by Chris Williams on 04/16/2013 - 08:42 am.

      That’s current info!

      Hillary – I moved in 2 weeks ago.

  4. Submitted by John Bracken on 04/15/2013 - 11:39 am.

    “Fair Share”

    There are receivers of tax revenues and consumers of tax revenue. Beyond her Social Security check, Ms. Lewis probably receives food stamps, Medicaid and a slew of other resources provided by taxpayers. I don’t for one minute believe that she is flush with resources but on April 15th we are reminded that America redistributes a lot of money. If Ms. Lewis thinks life is difficult now, wait until America implodes because of its deficits and feel good redistribution model. The mantra of the last three decades is “ask what your country can do for you.” Apparently the answer is “not enough.”

  5. Submitted by Paul Udstrand on 04/15/2013 - 02:05 pm.

    Fair Share?

    These kinds of ignorant tax assumptions have plagued us for far too long. Everyone consumes, receives, and pays taxes. All economies redistribute wealth, as do all governments. For over 20 years the Unites States has been redistributing wealth upwards to the top 5%. The current deficits were deliberately created by Republicans who promised us that tax cuts would pay for themselves and Reagan had proven deficits don’t matter. If we “implode” it isn’t going to be because disabled people have decent housing, it’s going to be because too many people believed in pixie dust instead of arithmetic.

    • Submitted by Tom Anderson on 04/15/2013 - 08:47 pm.

      But has the government been redistributing wealth upwards?

      Some examples of the government taking money from the lower and middle class (taxes) and giving it to the top 5% would be helpful to prove the point. Wealthy people succeeding and making more money than people making less is not the same as the government redistributing money from one group to another.

      • Submitted by Paul Udstrand on 04/16/2013 - 08:57 am.

        Yes, the government redistributes wealth upwards

        Hey Tom,

        Over the last 30 years or so wealth disparity in the US has grown dramatically. Median household income has reached it’s lowest point in 50 years while the wealthy are wealthier than they’ve been since the Gilded Age. This is not a product of “hard work”, it’s a product of government policy. Tax policy, monetary policy, regulatory policy, etc. have all been changed to benefit the wealthy more than anyone else in the last 30 years. Let’s not pretend now that we don’t know that Reagan transformed the economy into a trickle down economy. And let’s not forget that Clinton continued that policy! For instance the wealthy derive most of their income from financial transactions that are not taxed at all (capital gains) and the top 5% have captured 90% of all of the economic growth in the last 20 years.

        Examples? Well stadiums are the most obvious example. The Viking and Twins stadiums not only transfer hundred of millions into billionaire investments, they also create wealth for billionaires by increasing the value of the “franchises” themselves.

        However, the very programs for the poor that so many complain about are actually one of the biggest transfers to the WEALTHY although people tend to think they’re hand-outs to the poor. These so-called welfare programs are actually low wage subsidies for business worth billions of dollars. The reason so many people collect so much welfare is they DON’T collect sufficient wages and benefits. $70 billion a year companies like Target get living wage waivers and pay minimum wages that are far below the poverty lines. Likewise they offer cut-rate health care and worthless retirement benefits. This means the taxpayer makes up the difference during employment with subsidized housing, food assistance, etc. After employment the taxpayer picks up the tab with social security and medicare/medicaid. It’s a transfer of wealth because the wealthy pay less than everyone else as individuals, and the benefits are NOT paid for by companies who in some cases pay zero taxes. In short, if business and the wealthy people who own them had to pay living wages and retirement benefits, we wouldn’t need welfare. The profits are private but the costs are socialized.

      • Submitted by Monica Millsap on 04/16/2013 - 08:59 am.

        Examples

        I don’t think you need to look far to find taxes raised on the middle class and redistributed up. Think the Pohlads (lobbied for and successfully raised taxes to pay for Target Field). Then, realize they are the rule, not the exception.

  6. Submitted by Jon Kingstad on 04/15/2013 - 02:39 pm.

    What about transportation?

    The above posters make good points about slumlords preying on low information renters. But it’s not just lack of access to information. It’s also lack of access to transportation. The article doesn’t say whether Ms. Lewis has an automobile. I suspect she does not which is another reason she lives where she lives. She is probably dependent on public transportation to get to store and get around. Public transportation of the kind Ms. Lewis needs is pretty much unavailable in the suburbs. Rents are no lower plus you have to own a car with all the useless expense that entails.

    As far as redistribution of wealth by our tax system is concerned, I’d say that the evidence of the last five to ten years has pretty much established that the only way wealth is being redistributed in this country is to the 1% of the wealthiest. Ms. Lewis is just among those of us whose victimization of this reverse predation is most clearly evident for the time being.

  7. Submitted by Paul Udstrand on 04/16/2013 - 09:26 am.

    Good on Jon

    Jon correctly points out that some of these commentors pointing to the suburbs are assuming that everyone has a car. This suburban apartment deals may be there, but if you can’t get to work or the grocery story store without a car they’re useless. Sure, disable people on welfare may be able to find an apartment in Eagan, but then we have to offer even more subsidized services for transportation.

    You just have to wonder if some people ever get tired of being wrong. When we tried to warn people about sprawl they were too busy buying SUVs to pay attention. Now they complain about the cost of welfare.

  8. Submitted by Paul Udstrand on 04/16/2013 - 10:49 am.

    Another transit observation

    Somewhere here on Minnpost in the last few months someone did a story about property values and rents near transit. A recent study found that in some cases transit proximity is as valuable as lake front proximity. So yes, if you want to be close to transit in a city the rent is going to be more expensive, that the market doing that, not the government or the subsidized renters.

  9. Submitted by Susan Maricle on 04/16/2013 - 12:07 pm.

    I’m not sure if this is an urban legend

    but when I owned rental property in north Minneapolis, I heard tales of rental property owners who artificially bumped up their rents by 30% in case Section 8 tenants were unable to come up with their portion of the rent. The artificial increase guaranteed these property owners they would be paid in full every month. Maybe that’s the “something fishy” that Mr. Klein alludes to.

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