Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 13, 1993 TAG: 9311130053
SECTION: NATIONAL/INTERNATIONAL PAGE: C-5 EDITION: STATE
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
The $1.7 billion is more than any other federal agency is being asked to give up in a government-wide belt-tightening. If Congress approves, the amount will be deducted from the $25.2 billion appropriation already approved by Congress for the Department of Housing and Urban Development for next year.
One of the biggest cuts would come in the department's mammoth rental-assistance program, which helps poor and moderate-income people pay rent in privately owned housing in their communities. The administration says it can save $558 million by prohibiting the owners of some of these homes and apartments from raising rents for one year.
Most property owners, however, believe a ban on a rent increase would be "clearly, blatantly unconstitutional," said Charles L. Edson, the owners' attorney.
White House officials also believe they can economize by combining housing vouchers and certificates, two methods being used to dispense aid that eligible families use to rent homes and apartments in privately owned housing, according to those familiar with budget discussions.
The administration prefers vouchers, which permit families to rent units beyond those with fair-market rents set by the government, according to advocates for low-income families.
As a result, families using vouchers are likely to pay more for their rent than they would with certificates, under which tenants pay a flat 30 percent of their income in rent and the government pays the rest.
Rep. Henry Gonzalez, D-Texas, chairman of the House Banking, Finance and Urban Affairs Committee, has voiced skepticism about the administration's proposal. He said the merger of voucher and certificate programs could end up costing more than renters should have to pay.
Gonzalez said he could not "in good conscience condone a program" that could allow many renters to pay up to 45 percent of their incomes for housing.
David Bryson of the National Housing Law Project, a nonprofit group, said HUD studies show "there are over 5 million families who are in dire need of housing assistance but cannot get it."
Bryson also advocated changes in the administration proposal so that landlords could be prevented from setting "their rents above the payment standard [established by law] knowing that the tenants will pay the extra just to get a place to live."
The cost of housing assistance has escalated sharply over the past two decades. HUD monitors $100 billion in long-term housing-subsidy commitments and billions of dollars in grants, according to the agency's inspector general's office.
These mounting bills have alarmed Congress and have led to a "clear trend" toward cutting back on aid, according to Richard West of the National Low Income Housing Coalition.
HUD budgets have swung wildly over the years, from a high of $36 billion in fiscal year 1980, the last year of a Democratic administration, to the low of $13 billion during the Reagan administration.
The Clinton years are likely to be marked by lower spending than in recent years. Already administration budget framers have been asked to start their fiscal 1995 planning with an agreement that the housing budget will not go over $21 billion, a sharp decline from levels of recent years, according to one housing expert familiar with the budget discussions.
Among the Clinton proposals for saving money next year is a recommendation to cut 2,500 HUD employees from the Washington headquarters and the department's nearly 200 regional and field offices.
The administration says it can save $167 million "over time" by "streamlining and consolidating" its offices and firing the 2,500 workers.
The agency's inspector general's office disagrees. Low staffing levels, along with inadequate training and unreliable records, already have contributed to heavy losses in one federal program that helps millions of Americans buy homes and rent apartments, according to the inspector general's office.
Memo: NOTE: Shorter version ran in Metro.