Housing Authority Vouches for More Affordable Homes

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Recognizing that landlords still are not biting when it comes to taking in tenants with federal Section 8 housing vouchers, the city’s Housing Authority is trying a new approach to creating affordable housing: Give the subsidy directly to developers of new housing.

The Housing Authority recently began soliciting bids for a program that will award 1,000 Section 8 vouchers to developers of new, or substantially rehabilitated, low-income rental units. The initiative aims to expand the city’s existing project-based voucher program, which has already given 750 housing vouchers to owners of existing buildings to help long-time tenants, often elderly, stay in their homes when rents rise. Section 8 vouchers require that tenants pay 30 percent of their income in rent, while the feds cover the rest. Federal law allows local housing authorities to use up to 20 percent of their Section 8 vouchers for project-based programs.

Affordable housing developers welcome the initiative, viewing it as a needed funding stream to help jumpstart their projects. “You can’t finance a development of new housing against tenant-based Section 8 because you don’t have a guarantee,” said Brad Lander, director of the Fifth Avenue Committee in Brooklyn, which manages more than 300 units of low-income housing. Under the tenant-based voucher program, once a tenant moves out, that apartment is no longer subsidized, unless the landlord finds another Section 8 tenant to move in. The project-based program, Lander said, “gives you a guaranteed revenue stream that you can literally take to the bank and borrow money in order to develop low income housing.”

The program also guarantees an apartment to the lucky tenants who will be placed in the 1,000 subsidized units. In 2001, according to the Housing Authority, about 10 percent of voucher holders could not find an apartment within the four-month time limit, and returned their vouchers unused. “In New York City, where the market is very tight, a voucher alone can not assure you that you will find housing within your means,” said Victor Bach, a housing analyst with the Community Service Society.

Under the new proposal, developers of family housing and housing for residents receiving supportive services with at least 20 units can receive subsidies for up to 25 percent of their apartments. Owners of housing for seniors or tenants with disabilities can get subsidies for their entire building. While the subsidies are subject to annual congressional appropriations, an apartment can remain subsidized for up to 10 years, at which time the Housing Authority can choose to renew the lease or not.

Developers will choose tenants from the city’s Section 8 waiting list. The apartments are expected to be ready by the end of 2003.